Debt Limit Will Be Reached Today!
The infuriating fight to authorize spending already-allocated money is back.
NPR (“Here’s why a high-stakes debt ceiling fight looms on Capitol Hill“):
Treasury Secretary Janet Yellen says the U.S. will hit the debt limit — currently $31.4 trillion — on Thursday, intensifying a high-stakes political battle already underway in Washington.
Some House Republicans want to leverage must-pass legislation to raise the nation’s borrowing authority to extract federal spending cuts in an effort to balance the federal budget — but that could mean looking for cuts in some of the country’s most popular social programs.
“Look, you only have so many leverage and negotiating points. The debt ceiling is one of those. Nobody in America wants us to blindly just raise the debt ceiling again if we don’t get structural reforms around here. Nobody wants that,” Rep. Chip Roy, R-Texas, told reporters last week.
Roy was part of a group of hard-right conservatives who extracted handshake agreements from Rep. Kevin McCarthy, R-Calif., in order for him to get their votes to become House speaker. As part of that, McCarthy is pledging to fight for spending cuts at all turns in this Congress.
President Biden and congressional Democrats say they will not engage in negotiations on the nation’s borrowing authority. “Congress must deal with the debt limit and must do so without conditions,” White House press secretary Karine Jean-Pierre reiterated this week.
Both of these positions are absurd, although not equally so.
In a sane world, there would be no “debt limit.” The government goes through a painful, multi-step process to pass the budget. After negotiations within the Executive Branch, the President submits a budget. Then the Budget Committees of both Houses pass their own budgets, taking the President’s submission into account. Then the Appropriations Committees actually decide what gets spent. This is, of course, reconciled between the two Houses into a final budget. Finally, the President signs it into law.*
Something similar happens with tax policy, although not with the same regularity.
So, it simply makes no sense to have to periodically re-authorize spending that was already authorized over and above the amount of revenue collected. Deficit spending is baked into a system wherein politicians don’t want to raise taxes or cut spending.
At the same time, the idiotic debt ceiling is a fact of American politics and, therefore, a point of leverage for the minority party. Negotiations are an inevitable part of the dance.
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*This is oversimplified a bit and assumes that a budget is actually passed, rather than Congress endlessly kicking the ball down the road with continuing resolutions. See, for example, this Center on Budget and Policy Priorities explainer for a more detailed account.
Sanity was not a requisite condition baked into the human experience.
Looking at what McCarthy had to give up to become Speaker, you can be certain that it will never, ever be enough for the MAGAts.
You can’t negotiate with nihilists. It just cannot be done.
Which means that it is a much more rational strategy to pressure the sane Republicans than negotiate with the mouthpiece of the crazy caucus.
@drj:
100%. McCarthy has shown that a) his word means nothing, b) he has no control over his caucus and c) his idea of negotiating means giving in on everything.
Republicans;
Democrats;
Media;
It was political malpractice that Dems didn’t resolve this after the elections.
@Sleeping Dog: Agreed.
That window after the elections was a squandered chance to pass so much beneficial legislation to a friendly Senate/POTUS – without fear of the electorate.
Democrats do not know how to play hardball.
I’d propose the following cuts:
Reduce the salaries of all members of Congress to one dollar per term. Congressional staffers to be paid the federal minimum wage
Cut the defense budget by 2/3.
Cut the SCOTUS budget by 100%
Cut the budgets for all DHS agencies and DHS itself to zero.
This seems slightly less nonsensical than what the Cheeto party wants.
This has never been clear to me.
The administration is given conflicting directives. They are obligated to spend the money lawfully appropriated by Congress. They are not allowed to breach the debt limit lawfully set by Congress.
I understand the Supreme Court would not want to touch this but aren’t they the right place to settle this once and for all?
On the other hand, if the administration ignores the debt limit, who has standing to sue?
@Hari:
If such actions prevent the payment of debts to bondholders, at a minimum, they definitely have standing to sue.
If we continue to just keep spending and repaying, I’m not sure. However, that would take an act of the Federal Bank (i.e. the trillion dollar coin route). And at a minimum that will lead to congressional investigations and most likely a partisan lawsuit from the House majority. As to whether or not they have standing–that would be something that would get fast-tracked to the US Supreme Court.
People who’ve gone through this before are scared.
NPR
@Kathy: Lowering pay for members of Congress is a great way to be sure only the very, very wealthy ever serve.
@Hari: @matt bernius: This contradiction in legal requirements with respect to appropriations and debt has been lying around forever. Maybe it is time to rip the band aid off this legal contradiction and settle it once and for all. Will be traumatic for the country but better in the long run. Maybe.
@drj: Does anyone have a list of who these sane Republicans are? Maybe there are enough of them to conduct government business with and we can triangluate off the crazies as the Democrats did with the radical left back in my young adulthood.
Personally, I don’t believe that there are enough (or even any) sane Republicans to work with, but it’s sad that the Democrats in Congress haven’t explored this possibility or don’t have a list or whatever.
@just nutha:
Fair chance that there are six (all that is needed) who are in the pocket of a sane billionaire.
Fingers crossed, I guess.
@drj: I just checked. Current arithmetic they need five. There’s one vacancy, a VA Dem who died a few days after the election. He won by 30 points, so we can assume a D replacement. And the GOP who pretends to represent me, Greg Steube, fell off a second story roof yesterday, likely won’t be on the floor for awhile, and the GOPs just banned proxy voting. So the House right now is 433 voting members. Even the MAGAts have to be getting calls from major donors telling them not to screw up global finance.
WAPO had an article about Steube this morning. Comments were running very unkind. And frankly there’s no reason they shouldn’t. He gets re-elected by being a total MAGA panderer. I wish him well injury wise, but he fits the Iranian phrase, a waste of skin.
@Tony W:
At least on the debt ceiling, it would have had to be done by reconciliation and the number of days required for that process was very, very tight. Rumor at least is that Schumer didn’t have 50 votes to push through another reconciliation resolution and bill.
@Scott:
Perhaps. That said, both political party’s aversion to ripping of band-aids on big issues, doesn’t make me hopeful.
I have to admit that I’m a little intrigued by the “Democrats don’t know how to play hardball” thought. It strikes me as more of a variation of “I’ll just lock them in a room until they solve the problem,” but I may be misunderstanding what “hardball” tactics are available to deal with people who are as willing to burn the sucka to the ground as I am to let them.
Every time we do this debt ceiling thing I picture Cleavon Little in Blazing Saddles holding a gun to his own head and threatening to shoot … himself. It looks like Biden may recognize that Republicans are threatening, if he doesn’t “compromise”, to destroy the Republican Party.
Before Republicans take any action that would stop an increase of the debt limit, all of them should pay off any credit card debt, pay off all auto loans, pay off home mortgages and pay off any other personal loans.
Then the Republicans should entertain legislation that would compel all their constituents to do the same.
Pay as you go!
As I’ve mentioned several times:
1. The President can’t not pay the debt (14th amendment)
2. The President can’t not pay out congressionally appropriated funds (Train v. New York)
As long as both of those are true, I don’t see how the debt ceiling law can be constitutional.
Champagne corks are popping in the Kremlin…
@gVOR08:
And where were you when he “fell”? And were there no third story roofs around?
@drj: Discharge petitions take a lot of time. The Democrats should introduce one now for a clean debt ceiling raise, and then let everyone twist until we find those few necessary sane Republicans.
My guess would be that reversing the 2017 corporate tax cut is off the table, but honestly it seems to me that would both raise revenue and help inflation as much as raising interest rates would. Maybe better.
I’m so over the Republicans cutting revenue and then bellyaching about the debt.
@Stormy Dragon: While that specific interpretation of the debt clause has never been tested in court, it seems dubious. An obligation to pay existing debts is not authorization to take on more debt.
Clinton claims he was prepared to do it and force the courts to tell him No but never did. The Obama administration did not think they had the authority.
I have been pondering the question of why the Democrats didn’t deal with the debt ceiling in the lame-duck session.
My conclusion is that they were ok with what they calculate is about to happen. I’m not sure what that is, but my guess is that they think it’s going to break against Republicans politically, and not be ruinous for the country, since presumably that would break against Biden and Dems in general.
How does that all work out? I don’t know. I do know that I don’t trust statements about “how scared everyone is” very much though. That’s a perfect opportunity to bend the truth. Politicians it seems to me, will make statements that are full of emotion and energy but no substance, and they will use these to keep their bargaining position close.
@James Joyner:
That’s where the Train v. New York part comes in, since it says the president has not choice but to take on more debt once congress has appropriated it.
@Stormy Dragon: That’s an awfully expansive interpretation of what seems a narrow ruling. Train was a statutory interpretation, basically saying Nixon didn’t have the authority to modify Congressional appropriations at his own whim. But, in this case, there’s a contravening statute saying that the United States can’t take on debt beyond $X.
Now, that doesn’t mean Biden can’t do it and force the courts to rule against him. But it seems like DOJ has told successive presidents they can’t do that.
“Nobody in America wants us to blindly just raise the debt ceiling again if we don’t get structural reforms around here. Nobody wants that.”
Not true. Not even close.