Today I want to discuss the debt ceiling. I promise it won’t be as nerdy as it sounds. However, there is part of it that will make you feel like you took a trip to the butcher shop and are watching the sausage being made. Today’s title is a basic outline of the article. (The first silly may actually be a kind choice of words.)
The United States is the only country in the world that has a debt ceiling. It is the top end constraint on how much money the Treasury Department is allowed to borrow in order to pay the previously congressionally approved bills. That’s right – the underlying spending has already been approved. Adding ridiculousness to the current situation, we have no shortage of lenders willing to lend us money at historically low rates. The bottom line is that the existence of the debt ceiling is silly.
Every time in history that we have approached the ceiling Congress has raised it. In most of those cases the party that doesn’t control the White House effectively holds it hostage to extract some other concession. Both parties have been guilty in the past and more than one presidential candidate has been forced to do some fancy stepping to explain a vote against raising it when they served in Congress. To most Americans that is silly.
To date this time has been no different except that the Republicans don’t seem to have a “ransom demand”. Republican Senate Minority Leader Mitch McConnell has declared that the Republicans will not vote to raise the debt ceiling. On the surface he wants to force the Democrats to do it on their own. A move to raise the debt ceiling is subject to the filibuster in the Senate. When the Democrats tired to do it with only Democratic votes – which they could have done with Vice President Harris breaking a 50-50 tie – the Republicans filibustered it raising the vote threshold to 60.
Mitch’s real objective is to make the Democrats use reconciliation to raise it and save the global economy. Reconciliation is much like bullets in a gun, it is finite. The Democrats only have one more opportunity to use the process this session and they are trying to use it as part of the infrastructure package. The debt ceiling has a time constraint (approximately mid-October) and McConnell (probably correctly) is betting the Democrats can’t get their act together in time to combine the efforts. Default would be catastrophic and if they had to make the choice the Democrats would be forced to chose to use the last “bullet” to save the economy. McConnell only cares about his caucus and wants to be Majority Leader again. In his mind the midterm will be a referendum on Biden and he vastly improves his chances of success the worse he can make Biden look. A default and/or failure to enact his agenda (which is pretty much wrapped up in the infrastructure legislation) would make Biden look incapable of delivering and vastly enhance GOP chances in 2022.
Moscow Mitch McConnell may be evil (and even an unwitting agent of Vladimir Putin’s: wouldn’t Putin love an unforced American default?) but he is not stupid. He is sly!
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