Ending It All This Time

Democracy is messy. That may be why Republicans have given up on it. Elections really don’t work. Let those folks storm the Capitol again and this time wipe out Congress and shut down the Supreme Court and install Donald Trump as President for Life – and make the office hereditary – his sons can follow him, and their sons, and so on. He will make the laws and then enforce them, and then rule on whether they are unconstitutional or not. (They would be of course,) And life would be simpler. America would be whiter. Gays would be back in the closet, or dead. Women would know their place. And those who accept Jesus Christ as their personal savior would run things. No one else would have a say. And no one would argue about politics anymore. That wouldn’t be allowed. This would be wonderful.

Listen to talk radio. That’s the general idea. Democracy has torn us apart. It’s time to move on.

Two-thirds of America isn’t ready for that yet. Trump isn’t the answer to everything. They’ll accept the mess, for now. But a real mess is coming. The Washington Post’s Tony Romm explains that:

The United States is careening toward an urgent financial crisis starting in less than two weeks, as a political standoff on Capitol Hill threatens to shutter the government during a pandemic, delay hurricane aid to millions of Americans and thrust Washington to the precipice of defaulting on its debt.

Yep, here we go again:

The high-stakes feud stems from a fight to raise the U.S. government’s borrowing limit, known as the debt ceiling. Democrats have tied the increase to a bill that funds federal operations into early December, setting off a war with Republicans, who refuse to raise the cap out of opposition to President Biden’s broader agenda – even if it means grinding the country to a halt.

Their position? Biden has to give up on his entire agenda and admit government is stupid and doesn’t work and the private sector can fix everything, and thus nothing should be done about anything. And that is a deadly position:

No recent fight in the halls of Congress has quite carried the same stakes as this one, coming at a time when Washington continues to grapple with rising coronavirus infections and the deadly consequences of a fast-warming planet. Biden himself has warned about the “catastrophic” effects of inaction with key deadlines looming.

In short, this is not the time to shut down the government, on principle. Specifics do matter:

With the clock ticking, the House took the first steps Tuesday to stave off the political and economic crisis, as Democrats voted to keep the government operational and suspend the debt ceiling into December 2022. The party-line outcome foreshadowed its doomed prospects in the Senate, where Republicans have pledged to oppose it, threatening to leave Congress with little time to resolve a set of disputes that could destabilize global markets.

“We cannot shut down the government. That would be catastrophic in its own right,” warned House Speaker Nancy Pelosi (D-Calif.) in a speech before the vote. “We cannot ignore and not support the full faith and credit of the United States of America.”

This is critical stuff this time:

The first deadline arrives Sept. 30, at which point Congress must strike a deal to fund the government or critical federal services could cease Oct. 1. Millions of federal employees could see interruptions to their pay. Federal agencies that perform critical tasks in homeland security, law enforcement and housing could stop paying workers indefinitely. National parks and monuments also may close.

The implications of a shutdown on the government’s response to the pandemic are less clear, as there is little precedent for a sudden halt in government functions during a public health crisis. The U.S. government plays a leading role in monitoring the virus’s spread and coordinating vaccines and testing, all the while distributing billions of dollars in housing relief and other aid programs – working through agencies that are traditionally severely affected during a shutdown.

This cuts off the CDC and NIH and all the rest. Nothing can be monitored. Nothing can be reported. All that will be defunded. The only source of pandemic news would be Tucker Carlson. But it’s more than that:

Three years ago, a shutdown under President Donald Trump’s watch also cleaved a hole in the U.S. economy: JPMorgan Chase estimated then that the country lost $1.5 billion each week that Washington remained at a standstill.

A shutdown in 2021, however, could have even greater economic effects at a time when the Biden administration is still grappling with a pandemic that at one point caused widespread, Depression-era unemployment. Adding to the burden, lawmakers had hoped in the latest funding measure to authorize billions of dollars to respond to two recent, deadly hurricanes that battered the Gulf Coast and Eastern Seaboard. Those dollars now remain in jeopardy, along with a third priority to help resettle Afghan refugees who left their home country as the Taliban seized on a messy U.S. withdrawal.

Only one Senate Republican, Sen. John Neely Kennedy (La.), has signaled an interest in breaking ranks and casting a vote in favor of the spending – citing the impact of Hurricane Ida on his home state.

But that’s about it. Otherwise, do nothing. But wait, there’s more:

The next blow could come days later, in mid-October, when the U.S. government stands to breach the debt ceiling absent action from Congress. Treasury Secretary Janet L. Yellen and other top Biden administration officials have urgently referred to the prospect as a financial doomsday, saying it puts U.S. credit at risk and could plunge the economy back into the recession from which it only recently re-emerged.

That’s the big deal:

The significant, looming repercussions only add to the urgency on Capitol Hill, which has less than two weeks until government funding runs dry – and a few weeks until the country breaches the debt limit. House Democrats on Tuesday unveiled the full text of their plan, which funds the government into early December and suspends the debt ceiling into December 2022.

That’s the best that they could do:

Pelosi and Senate Majority Leader Charles E. Schumer (D-N.Y.) have called on their GOP colleagues to acknowledge their “shared responsibility,” reminding them Monday that Democrats had supplied the votes to keep the country solvent even as they opposed other policies under Trump. A day later, Schumer took to the Senate floor to fault the GOP for hypocrisy, after the party added $7 trillion to the deficit while in power.

“This is playing with fire,” said Schumer, warning the combination of a government shutdown with a breached debt ceiling could have consequences including higher interest rates on Americans’ mortgages and delays in obtaining Social Security checks.

In short, you guys created most of this debt. The first interest payments on the debt are coming due. Pay up! But that doesn’t matter now:

Senate Minority Leader Mitch McConnell (R-Ky.) has ignored the attacks, as his party hopes to use the fight over the debt ceiling as a way to delay Democrats from securing as much as $3.5 trillion in new spending that Biden seeks. He said GOP lawmakers would have supported an extension of government funding along with new disaster relief if only Democrats had not coupled it with an increase in the federal borrowing limit.

Taking to the floor Tuesday, McConnell did not directly address the debt limit – but did fault the president and his Democratic allies in Congress for a “reckless taxing-and-spending spree.”

Admit all government is stupid and doesn’t work! But the Democrats just aren’t there yet:

In recent days, Democratic lawmakers have reassured they will not allow the country to default. Some have said they could ultimately take special legislative maneuvers to bypass the Republican blockade and adopt the debt ceiling increase on their own.

But the process could take days that Democrats simply do not have, meaning at least a partial or short-term government shutdown is possible even if Congress staves off a more apocalyptic financial meltdown. And it would force Democrats to vote on their own to raise the debt ceiling by a specific amount, opening them to GOP attacks later – even as Democrats contend that some of the spending was enacted on a bipartisan basis.

They have no options, and the Washington Post’s Jeff Stein reports this:

The United States could plunge into an immediate recession if Congress fails to raise the debt ceiling and the country defaults on its payment obligations this fall, according to one analysis released Tuesday.

Mark Zandi, chief economist at Moody’s Analytics, found that a prolonged impasse over the debt ceiling would cost the U.S. economy up to 6 million jobs, wipe out as much as $15 trillion in household wealth, and send the unemployment rate surging to roughly 9 percent from around 5 percent…

The Treasury Department has said it will exhaust its “extraordinary measures” to pay the U.S. obligations sometime in October, giving lawmakers little time to act to head off calamity.

“This economic scenario is cataclysmic. The downturn would be comparable to that suffered during the financial crisis” of 2008, said the report, written by Zandi and Bernard Yaros, assistant director and economist at Moody’s Analytics.

Yes, it’s that bad. And this is fairly simple:

The debt limit is the maximum amount of debt that Treasury can issue to pay the country’s bills. It was suspended from 2019 through the beginning of last month under a deal reached during the Trump administration. If Congress fails to increase the debt limit, Treasury would be unable to pay debts as they come due. Treasury Secretary Janet L. Yellen said earlier this week that such a default would be unprecedented in U.S. history. Moody’s “best estimate” is that this date is Oct. 20, although Treasury has not given a more precise day.

At that point, Treasury officials would face excruciating choices, such as whether to fail to pay $20 billion owed to seniors on Social Security, or to fail to pay bondholders of U.S. debt – a decision that could undermine faith in U.S. credit and permanently drive federal borrowing costs higher.

That’s an interesting choice – save the world’s economy or let tens of millions of the elderly die homeless in America’s streets – but it’s not just that;

Failure to raise the debt limit would have catastrophic impacts on global financial markets. Interest rates would spike as investors demand a higher rate of return for the risk of taking on U.S. debt given uncertainty about repayment. An increase in interest rates would ripple through the economy, raising costs not only for taxpayers but also for consumers and other borrowers. The value of the U.S. dollar would also decline long term as investors questioned the security of purchasing U.S. treasuries.

This Is McConnell’s plan:

Republicans have insisted that Democrats should increase the debt limit on their own, because they are pushing trillions of dollars in new spending priorities. But Democrats have rejected that approach because current national debt levels, which require raising the debt ceiling, are due to an array of policy priorities from both parties. The debt ceiling would have to be raised or suspended regardless of the spending package being pursued by the Biden administration.

And that’s a problem:

The path forward is unclear. Congressional Democrats on Monday unveiled a plan to package the debt ceiling suspension with funding the federal government – which would otherwise shut down at the end of this month – along with emergency funding for disaster relief and Afghan refugee resettlement funds. Republicans are expected to block the measure, with even moderate GOP senators saying they will vote against that package as long as it includes raising the debt ceiling.

Nothing is easy now:

Historically, both parties have come together to ensure the debt ceiling gets raised. Turning it into a political pawn would jeopardize international faith in the U.S. government, driving the cost of borrowing higher, even if it is not breached.

The world is watching. The world is not impressed, and Dan Froomkin is frustrated:

Republican congressional leaders are flagrantly ginning up a major political and financial crisis – safe in the knowledge that the Washington press corps will blame both sides.

At issue is a formality: raising the debt ceiling so that the U.S. government can continue paying the bills as previously appropriated by Congress.

But Republicans are refusing to go along, threatening a catastrophic government default and shutdown that could send the U.S. economy into an immediate recession and destabilize global markets.

They’re saying that keeping the government solvent is a Democratic problem now.

It’s an abandonment of the responsibility of governing. It is aberrational behavior by a political party that is willing to take extreme and potentially damaging action to score political points. It’s a hostage crisis.

And by not calling it out for what it is, the political press is enabling it.

That means that previous reporting was bullshit:

Tony Romm describes – but doesn’t question – the “political standoff” in which Republicans “refuse to raise the cap out of opposition to President Biden’s broader agenda – even if it means grinding the country to a halt.”

And if the blame is generally apportioned to both sides, it nevertheless seems like the onus is always on Democrats to fix the problem.

As Romm’s Washington Post colleague Jeff Stein writes, “The White House is in a bind” because “GOP lawmakers refuse to help Democrats avert a national financial catastrophe, leaving the administration with few easy answers as time runs out.”

Stein notes that Senate Minority Leader Mitch McConnell “has not communicated any requests to the administration of what he wants in exchange” for Republican votes. Then Stein decries the fact that “there are no negotiations to resolve the impasse.”

He wants the world to burn. That’s it. But that’s the Democrats’ problem:

The Associated Press characterized the Democratic effort to push ahead with a vote as “all but daring Republicans who say they will vote against it despite the risk of a fiscal crisis.”

And rather than acknowledge that threatening shutdown and default is a now a go-to for an increasingly antigovernmental Republican Party, the AP benignly calls this “an all-too-familiar stalemate.”

Democrats chose to combine stopgap legislation to keep the government funded with the debt ceiling suspension – neither of which should be remotely controversial. New York Times reporters Emily Cochrane describes the move as “setting up a clash with Republicans.”

Coming pretty darn close to putting the blame entirely on Democrats, Cochrane writes that “the decision by Democratic leaders to attach it to legislation lifting the federal debt limit through Dec. 16, 2022 could ultimately jeopardize a typically routine effort to stave off a government shutdown, heightening the threat of fiscal calamity.”

This is absurd and Froomkin cites Catherine Rampell

Yes, it stinks that Democrats always have to be the grown-ups and prevent infantile Republicans from trashing the Constitution and causing a global catastrophe. But that’s apparently how our government works now.

The sooner Democrats realize this, the better.

Froomkin agrees:

How can the Republicans be so confident that the mainstream media won’t make it clear who’s to blame? Because it’s so damned predictable.

In 2013, when Senator Ted Cruz and his fellow Republicans shut down the government for 16 days in an attempt to defund Obamacare, the Washington Post blamed it on a “bitterly divided” Congress that “failed to reach agreement,” while the New York Times called it “a bitter budget standoff” left unresolved by “rapid-fire back and forth legislative maneuvers.”

And that’s nonsense:

How can democracy self-correct if the public does not understand where the problem lies? And where will the pressure for change come from if journalists do not hold the responsible parties accountable?

Slate’s Jim Newell agrees with that:

At the core of this potentially catastrophic game of chicken playing out at the highest levels of government are the rinky-dink politics of dumb 2022 campaign ads. And the person being the most ridiculous here, first and foremost, is Senate Minority Leader Mitch McConnell.

While debt limit hikes over the last decade, including during the Trump years, have been done on a bipartisan basis, often negotiated as part of overall spending deals, McConnell has for months maintained that Republicans absolutely will not help Democrats raise the debt limit this time. There is not any precedent for this and, as Paul Kane wrote in the Washington Post, McConnell has “essentially created a new rule out of whole cloth to justify his actions.” His new rule is that when a party has unified control of government, it is that party’s responsibility to increase the debt limit on its own. He will not even engage in negotiations or ask for something in exchange. If a debt limit hike comes up in any bill, he – and enough Republicans to successfully filibuster it – will vote to default on the federal debt. Which he thinks would be bad, but also not his problem.

The reason McConnell is staking this position is that he wants material for campaign ads. He wants Democrats, without any Republican help, to do the work of increasing the debt limit by a big number, a great deal of which was amassed during the Trump administration. Then, Republicans can run campaign ads about how reckless Democrats increased the debt by a huge number, when Democrats were just giving the Treasury authority to pay the bills we’ve already accrued.

So this really is about those display ads:

This quest for televised talking points guides even the tiniest tactical decisions McConnell is making here. For instance: Some Senate Democrats had floated in recent days that they could pass the increase by themselves, on a clean bill through regular order, so long as Republicans don’t attempt to filibuster it. But McConnell won’t allow that. He is insisting Democrats do it through the reconciliation bill they’re working on. Why? Because if Democrats do it through reconciliation, they have to cite a specific number they’re raising the debt limit to, and can’t just suspend the debt limit for a certain date. McConnell wants Democrats to cite a scary number, for campaign ads. Democrats would also, through reconciliation, have to go through two more “vote-a-ramas,” or all-night open-amendment sessions. That would give McConnell two more long nights of putting Democrats on-the-record on fraught issues, which Republicans could then convert into – you got it – campaign ads.

To review: McConnell wants Democrats to own the selection of a scary number on a must-pass item, so he can run campaign ads against them, and he insists they do it through the procedural route that would allow Republicans to secure even more campaign ad material.

That’s how the game is played now:

Since Republicans began weaponizing debt limit increases during the Obama administration, just about every Democrat has either publicly or privately adopted the appropriate position: The debt limit is a catastrophically stupid law that shouldn’t exist. Raising it doesn’t increase spending itself; it just allows the government to finance all the spending that Congress has already approved. It has straightforwardly not served its purpose of being a “check on runaway spending,” but it has allowed bad-faith actors to wield it as a suicide vest unless some political demand of theirs is met. It’s an international embarrassment that binds the stability of global markets to our broken domestic politics. A responsible majority would work to either repeal it or – as Democrats have the power to do on their own – raise it to a cartoonishly high number to ensure it’s never an issue again. Rather than being a difficult vote, this should be a crowning achievement worthy of a ticker-tape parade.

But Democrats are too scared of the campaign ads to do that…

And thus this:

McConnell might not mind if the economy melts down under a Democratic president. That’s good campaign ad material, too.

This will not end well. This may be the end.

About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
This entry was posted in Debt Limit and tagged , , , , . Bookmark the permalink.

2 Responses to Ending It All This Time

  1. jadedreprobate says:

    Good thing we’re old and probably won’t be around long enough to have to live through all the consequences of this nonsense!

  2. Pingback: Thanks A Lot, Noot | Mock Paper Scissors

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s