Now comes the grind – after Christmas and New Year’s there’s that stretch of six cold and empty weeks without anything much to celebrate until Valentine’s Day, when every male in America is terrified at getting it wrong. Until then it’s back to school and back to work, and this year in Washington a new Congress was sworn in. All the new members took their oaths, all smiles. It was back to the people’s business. The outgoing congress was far and away the least productive and least effective ever, with the lowest approval ratings ever recorded – you could look it up – so things would have to be better. Michele Bachmann, somehow reelected in the House, introduced the very first bill in the House for this new crew – a bill to repeal the Affordable Care Act, Obamacare, in its entirety. That would make this the thirty-fourth time this has been introduced. The few times this passed the House it died in the Senate, and if somehow it ever made it through the Senate – less likely than ever as the Democrats picked up five more seats this time – Obama would veto it. The gesture was meaningless, but it was symbolic, like a dog pissing on a bush to mark its territory. Things returned to normal. It’s going to be a long cold winter.
At least that fiscal cliff business is out of the way. The matter of who will be taxed at which rate is settled, for now, and those absurd automatic across-the-board spending cuts that had been set up to scare every legislator into doing something, anything, to make sense of what the government does, were postponed for two months. So taxes would not jump up as the Bush tax cuts expired and the country would not shut down, and the markets soared and all was right with the world. Things have been settled on the revenue side with the notion that work on the spending side of things would come next.
The Republicans were none too happy with any of this. They felt they’d been rolled – they failed to protect the very wealthy from having to go back to paying what they used to pay, and benefits for the long-term unemployed would be extended for a full year, without offsetting spending cuts to cover the thirty billion or so that would cost, and child-tax-credits stayed, as did special deductions to help the poor and middle class pay for college tuition. There would also be no deep cuts in Social Security benefits, or to Medicare and Medicaid. This was outrageous, more of the government doing things for its citizens, further undermining any sense of personal responsibility in the masses of moochers and whiners who love to play victim. Still the Republicans won on the Estate Tax stuff – vast fortunes can be preserved over generations with little or nothing to be paid in taxes from now on – and what Obama had really wanted, a two-year truce in the Republicans always refusing to raise the debt limit, Obama didn’t get. Obama got a lot of angry Republicans.
Obama also got set-up. Now he has three more cliffs to face, or we all do. No one wants to go over the cliff, but those absurd automatic across-the-board spending cuts, which are quite massive and devastating, intentionally and foolishly set up to scare every legislator into doing something or other, will have to be made to disappear. The Republicans will play hardball on this. They’ll tell Obama to cut all his favorite social programs to the bone, or else everything will be cut, pretty much shutting down the government. That’s cool. Americans love their Social Security benefits and Medicare coverage, and now Obama will have to tell America he’s cutting back all that stuff – and the Republicans can sit back and smile while he makes his announcements. They didn’t do that. Obama did. All they did was force his hand. Obama will take the heat.
That must be done by early March, but at the same time Congress will have to pass a budget or at least a continuing resolution to keep the government running. Authorization to pay federal employees, and the military, will expire. They can refuse to pass a budget or a continuing resolution and shut down the government unless Obama does what they want here too. Newt Gingrich did that back in the nineties and the nation decided he was a fool and a bully, but the thought is that this time America will applaud the Republicans for simply shutting down the government, as everyone despises Obama. They do, so that must be true. They also assume that everyone hates the government. They do, so that also must be true. This should be interesting.
The third new crisis is the debt limit thing. Yes, congressional Republicans do want to use the upcoming expiration of federal borrowing authority to force spending cuts, and there’s this op-ed from Senator John Cornyn of Texas – where he says that Obama prefers to govern by brinksmanship only. Cornyn says that if that’s so “it may be necessary to partially shut down the government in order to secure the long-term fiscal well-being of our country, rather than plod along the path of Greece, Italy and Spain.”
That confuses the second crisis with the third, as Matthew Yglesias explains:
What he’s missing here is that the path he’s advocating is much worse than anything that’s happened in Italy or Spain. He proposing that the federal government simply default on payment it’s obligated to make.
We have had, in the past, episodes that have been called government shut-downs. What’s happened in those cases is that no new appropriation bill has been passed authorizing many branches of the federal government to operate. Absent an appropriation, there’s no legal basis for the government programs to be administered and so they aren’t administered. Then congress appropriates new money and things come back.
Cornyn doesn’t seem to realize that he’s talking about something else entirely:
He’s talking about the government not paying bills that it’s already obliged to pay. Social Security and Medicare exist. Bondholders are owed interest payments. State and local governments have submitted paperwork to get their grants. Veterans are owed benefits. Contractors have agreed to do work. Congress has passed the appropriations bills. But if the debt ceiling isn’t raised, the Treasury won’t have the money to pay the bills it has to pay. The result won’t be a “shutdown” of government functions; it’ll be a deadbeat federal government. Some people won’t get money they’re legally entitled to. But who won’t be paid? And who will decide who won’t be paid? Does the Secretary of the Treasury just arbitrarily get to decide that bondholders and residents of blue states get paid, but there are no Social Security benefits for Texans? Can Obama dock Cornyn’s pay but not Chuck Schumer’s? Certainly there’s no legal authority for that kind of prioritization, but what’s Obama supposed to do if congress tries to prevent him from spending money that he’s legally obliged to spend.
This is a serious business:
Maybe everyone’s checks will go on time as required (the opposite of a government shutdown) but then everyone’s going to have to race to the bank ASAP because some of the checks are going to bounce. And then what happens?
As you know if you’ve ever bounced a check, the mere fact that you don’t have the money in your account doesn’t release you from the legal obligation to pay. The federal government still owes what it owes, regardless of what Cornyn or anyone else says about the debt ceiling. Instead of incurring new debts in the form of duly issued treasury bonds, we’d be incurring new debts in the form of bounced checks to soldiers and FBI agents and hospitals that treat Medicare patients.
Eric Posner, a law professor at the University of Chicago, sees one way out:
Congress has given Obama an impossible task: to implement a large number of costly public projects with less money than those projects cost. If he cuts spending, then he violates constitutional norms that give Congress the power to determine spending. If he raises revenues by borrowing or trying to tax people, then he violates constitutionals norms that give Congress the power to borrow or tax. In the face of contradictory instructions from Congress, the president can’t avoid choosing – by virtue of his administrative role as collector and disburser of revenues, the president must do something. Where Congress fails to provide him with consistent instructions, he has the discretion to do what he believes is in the public interest. If the economy were to be on the point of collapse, he could cite emergency powers sanctified by tradition as his authority for borrowing beyond the debt ceiling on his own. But a less drastic argument is that the power to resolve conflicting congressional orders is inherent in the president’s administrative role. Indeed, presidents frequently face conflicting statutes as they govern, and they have long enjoyed a great deal of discretion in resolving them.
So in the face of contradictory orders from Congress, President Obama should do what he believes is in the public interest. And if the House refuses to raise the debt ceiling, this surely means some combination of cutting spending, borrowing beyond the debt limit, and perhaps even searching out new sources of revenue.
There’s even precedent here:
Theodore Roosevelt famously advanced the modern view of the presidency, which he called the “stewardship” theory: The president should act in the public interest as he interprets it except when constrained by the Constitution or a specific act of Congress. He should not twiddle his thumbs waiting for lawmakers to get their act together. Roosevelt had in mind situations in which urgent action by the government is called for but Congress has failed to provide him with legal authority. President Obama faces a more complex setting, with Congress giving him contradictory instructions rather than no instructions at all. But for government to function, the dysfunctional institutions within it must give way. The president has spoken softly for long enough; now it is time for him to wield the big stick and raise the debt ceiling on his own.
That may be why Obama keeps saying he won’t negotiate on this, but Greg Sargent is troubled that Obama has said that Congress itself needs to raise the debt limit and should just do so:
But it’s unclear to me how this will work in practical terms. Unless Obama is prepared to go into default – or to pull some other ace out of his back pocket, such as the 14th amendment or “platinum coin” options – he will inevitably be negotiating over the debt ceiling. And he doesn’t appear prepared to do any of those things.
Kevin Drum chimes in:
We already know that Obama will be negotiating over the sequestration cuts. And once that’s happening, there’s just no way to pretend that he’s not also negotiating over the debt ceiling. If Republicans keep saying that they’ll only raise the ceiling if the sequester is dealt with, then you’re negotiating over the debt ceiling whether you admit it or not.
At a practical level, then, I’m curious about how Obama plans to pull off this “no negotiation” stance… This isn’t just business as usual. It’s a willful band of radical Republicans refusing to pay bills they’ve already run up. It’s really inexcusable.
The New Republic’s Alec MacGillis agrees and says we’re in new territory here:
It is striking to what degree the Washington establishment has come to normalize Republican hostage-taking of the debt limit, to see it as a predictable and almost natural element of the political landscape. Greg Sargent argues convincingly why this is a problem, noting that the debt ceiling must be raised to pay for past spending, and should not be used as a chip in negotiating future budgets: “In the current context, conservatives and Republicans who hold out against a debt limit hike are, in practical terms, only threatening the full faith and credit of the United States – and threatening to damage the economy – in order to get what they want. Any accounts that don’t convey this with total clarity – and convey the sense that this is a normal negotiation – are essentially misleading people. It’s that simple.”
What bears stating even more strongly, though, is how far we’ve come from 2011, when the Washington establishment viewed the Republicans’ threat of credit default as the utterly brazen and unprecedented step that it was. Even those who supported the gambit recognized it as a newly deployed weapon.
The Greg Sargent item is here:
Indeed, you can read through much of the coverage and come away with the sense that this is a typical negotiation: Democrats want a rise in the debt ceiling; Republicans want spending cuts; therefore, the two sides are squaring off for a game of chicken to see who can extract more from the other. That’s not what’s happening at all, and any accounts that portray it as such present a deeply unbalanced picture.
It’s true that some Congressional conservatives say they don’t want a hike in the debt ceiling. But when they say that, all they really mean is that they want to cut spending, which we already know.
It’s easy to get confused on these matters, and dangerous, and perhaps Republicans really don’t have the leverage in the debt ceiling fight they think they have. After all, Newt Gingrich, on MSNBC’s Morning Joe, was telling Republicans that a debt ceiling fight is a “loser” for them:
They’ve got to find, in the House, a totally new strategy. Everybody’s now talking about, “Oh, here comes the debt ceiling.” I think that’s, frankly, a dead loser. Because in the end, you know it’s gonna happen. The whole national financial system is going to come into Washington and on television, and say: “‘Oh my God, this will be a gigantic heart attack, the entire economy of the world will collapse. You guys will be held responsible.” And they’ll cave.
Even Rupert Murdoch’s Wall Street Journal editorial page was running up the warning flags:
Mr. Obama will say Republicans are risking national default and recession, most of Wall Street will echo him, and the Treasury will maneuver to apply maximum political pressure – for example, by claiming it can’t pay Social Security benefits. We’ll support efforts to cut spending and reform entitlements, but the political result will be far worse if Republicans start this fight only to cave in the end. You can’t take a hostage you aren’t prepared to shoot.
That’s an interesting image, an NRA sort of thing – but the Wall Street Journal editorial page is not recommending lining up the six-year-olds and shooting them dead unless Obama cuts federal spending.
Considering these warnings, Greg Sargent offers this:
This gets right to the heart of the matter, which is this: Are Republicans really prepared to let the country go into default and take the blame for crashing the economy? Sure, maybe some Tea Party Republicans are, but if GOP leaders aren’t, and the next compromise can be passed through the House with mostly Democratic votes, then all of a sudden the GOP position doesn’t look so strong, after all.
This is the Republicans’ problem, not Obama’s:
Maybe the question of what “not negotiating” on the debt ceiling looks like has a simpler answer than you might think: The White House just treats this as Congress’ problem. You can see that framing already in this comment from the White House today (emphasis mine) – “It is quite clear that the economy will be better if Congress does its job and does what it routinely has done historically which is raise the debt limit without problem.”
It’s true that in one way, the White House will inevitably be negotiating on the debt ceiling, in the sense that it will be engaged in talks over the sequester, tax reform, and spending cuts that Republicans will insist must be resolved before they agree to raise it. But … this doesn’t necessarily mean the White House has to be held hostage over the debt ceiling, and it’s really quite possible that in the end, Republicans will opt to agree to a somewhat balanced deal rather than risk taking the blame for cratering the economy.
After all, John Boehner is already on record saying that not raising the debt ceiling will cause financial disaster. The pressure on Republicans not to let this happen will be intense. For the GOP, blowing up the economy will mean nothing short of political Armageddon. Can you name a single prominent Republican in any position of influence who is willing to say the GOP should allow the country to default, rather than accept a deal that doesn’t gut entitlements?
Sargent suggests everyone should calm down:
I understand the pessimism on the left that the White House will ultimately give away too much. But things seem to be shifting: Now even prominent Republicans are giving away the game, admitting that the GOP doesn’t have the leverage here that it claims to have.
This is on Congress. If Republicans are willing to force a choice between destroying the economy and gutting popular social programs, let them wallow in that winning message. If they’re willing to tank the economy to get what they want – after taking a shellacking in the election and proving so dysfunctional that they could not pass tax cuts for everyone but the ultra-wealthy without substantial Democratic help – then it’s on them. Just leave it there.
That may be easier said than done. Perhaps the Wall Street Journal folks shouldn’t have said you can’t take a hostage you aren’t prepared to shoot. Yeah, they were saying don’t take anything hostage, but there was the other alternative. Remember all those Tea Party rallies where buffed-out white guys, dressed in black, showed up with their big semiautomatics strapped to their legs. Remember how Sharon Angle, when she ran against Harry Reid, said that if the vote goes the wrong way, if the majority votes for the wrong person, true patriots might be forced to use what she called their Second Amendment option. Any skinny white kid can walk around with a fully-loaded AK-47 on the assumption people will finally respect him, but they’ll only think he’s an asshole, until he starts shooting. These folks, on the debt-limit thing, may be quite willing to shoot the hostage – and then tell us it’s noble and good that they did. It seems this year will be much like the last.