The American and the global economy are unnecessarily flirting with disaster (or at least uncharted territory that no sane American wants to traverse). In my mind averting it may well come down to the actions of one man above all others. That man is Mitch McConnell.
We will be approximately a fortnight from America defaulting on its debt when this is published and as of this writing (only a few days before that date) no solution to the manufactured problem is in sight.
I’ll spare my readers a redundant debt ceiling lesson. All I’ll say today is that it is unnecessary in the first place. (I’m being kind in my verbiage!)
The only reason we are close to a default is because of the lack of leadership in the Republican House caucus and the lack of economic knowledge on the part of many of the members of that caucus. Republican House speakers seem to get worse over time. John Boehner had a serious drinking problem and Paul Ryan was arithmetically challenged but they look good when compared to Kevin McCarthy. McCarthy is such a poor leader that he feels compelled to leave someone like George Santos (assuming that is really his name) in office. Here is the reality: McCarthy needs his vote.
Despite what many American voters assume, Republicans have proven to be a disaster for the economy. Republicans brought us both the Great Depression and the Great Recession. The last time they played this game – the Tea Party Republicans of 2011 – they caused the only downgrade of America’s credit rating in history. That downgrade is costing every taxpayer more money.
The Republican “plan” that McCarthy got passed 217-215 – even in a throwaway vote McCarthy couldn’t get it passed without Santos’ vote – is a sham to start with. It talks of cutting a dollar amount but does not say where those cuts will come from. For most Republican voters who support McCarthy and Trump this is a case of be careful what you wish for. The cuts will almost undoubtedly come from programs that benefit you. That is why the specifics are undisclosed.
Back in 2011 a debt ceiling compromise was reached: it was Sequestration. The budget constraints were so nonsensical they ended up hurting almost every American. The economy was still recovering from the Great Recession (courtesy of Republican President George W. Bush) and Sequestration only made the recovery longer and more painful. We cannot have another compromise like that again. However, many House Republicans and Donald Trump want a recession because they feel their only chance in 2024 is if the economy is in the tank and they then hope the voters blame it on Joe Biden and the Democrats.
Here is the reality, negotiating with McCarthy is foolish. First off, he can’t deliver the needed vote to pass anything in the House that the Senate would agree to and Biden would sign. The 217-215 vote proved that. The second reason is that he simply isn’t smart enough economically or in many other ways. Why negotiate with someone who has nothing to deliver?
I believe that Republican Senate Minority Leader Mitch McConnell is evil but he is certainly politically smart. Deep down he doesn’t care about the House and I certainly doubt he respects McCarthy. Why would he? McConnell does care about regaining the Senate majority and the 2024 map certainly makes that a possibility. The last thing he needs is a voter mindset of throw all the bums out. One or more of his incumbents who look very good for reelection could get picked off in that kind of stampede. Mitch, much like Lyndon Johnson when he was his party’s Senate Leader, controls his caucus by controlling the purse strings. He also doesn’t want to hurt his financiers by tanking the global economy.
While I’m certain Biden has about as much respect for McCarthy as I do; I’m willing to bet he respects McConnell. They served together in the Senate for many, many years and he also dealt with him when he was in vice president slot. They have probably struck more deals over the decades than we know.
Democratic Senate Majority Leader Chuck Schumer lacks the votes to get past a filibuster. However, Schumer and McConnell combined can easily get anything passed if they agree on it in advance.
In the House Democratic Minority Leader Hakeem Jeffries can keep his caucus united which leaves him just a few votes short of the 218 (normally) required for passage in the lower chamber. McConnell has to have enough influence in the House to get him that handful of votes including for a discharge petition if necessary.
That’s the way I see it and as of this writing Mitch McConnell is the key to both the American and global economies. Remember I said he is both evil and smart; I’m expecting smart (and to a great degree self-serving) to prevail. The question is will that happen soon enough to avoid another credit rating downgrade?
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