Silly (Debt) Season is Here
Here come the goofy ideas for dealing with the debt ceiling. It's all part of the posturing before cooler heads prevail - eventually. But watch the Senate.
Watching Congress and the Biden Administration deal with the so-called “debt limit crisis” - except it’s not a crisis - is like watching the five stages of grief—lots of denials, anger, and now bargaining. Democratic depression will soon sink in, concluding with the acceptance that spending rate reductions will be required.
House Republicans, led by Speaker Kevin McCarthy, have played their hand very well.
House Republicans passed a debt limit increase that also included rolling back federal spending to Fiscal Year 2022 levels, crawling back unspent Covid_19 funds, and - horror of horrors - imposing work requirements on able-bodied persons on certain federal assistance programs.
But you’ll note that Democrats refused to consider anything but a “clean” debt ceiling increase. That’s because they miscalculated that McCarthy wouldn’t be able to hold his razor-thin five-seat majority in the 435-seat US House to pass a debt limit bill. Oops, he did, dumping the debt ceiling issue into Biden’s and Schumer’s laps. Senate GOP Leader Mitch McConnell has wisely put himself on the bench, letting McCarthy lead the “negotiations,” such as they are. Oliver Wiseman at The American Spectator summarizes things succinctly:
So far, McCarthy has maneuvered expertly in this debt fight. He united an unruly conference to pass legislation on the debt limit — something the White House was betting he would not manage. . .Democrats have been flat-footed ever since, with the president having to abandon his insistence that only a “clean” vote on the debt limit would do. McCarthy would then notch up another win, cutting out Democratic lawmakers and Senate Republicans to put himself center stage alongside Biden.
Schumer is waiting for the White House to develop a bipartisan deal before engaging. That’s because he doesn’t have 60 votes. He may not have 50, with 89-year-old Sen. Diane Feinstein practically unaware of her surroundings and two increasingly unreliable caucus members, Senators Joe Manchin (D-WV) and Kyrsten Sinema (I-AZ).
What matters now is leverage and politics. They often go hand in hand. And McCarthy holds the strongest hand for now. His troops have voted to increase the debt limit with strings attached (lower spending). Polling shows that Americans favor McCarthy and the House GOP approach. Biden’s approval numbers on the economy continue to tank. From a memo authored by the President of American Viewpoint, a respected GOP polling firm.
American Action Network commissioned a survey of Americans in 87 battleground congressional districts, where Joe Biden won by an average of five points in 2020, to gauge public sentiment on the upcoming debt ceiling battle. The survey finds:
• Americans overwhelmingly support cutting federal spending before raising the debt ceiling and find conservative arguments far more persuasive on the debt ceiling over President Biden’s.
• There is overwhelming majority support among battleground voters for proposed savings by Speaker Kevin McCarthy in exchange for raising the debt ceiling.
• Majorities believe Speaker McCarthy is negotiating in good faith, and most Americans will blame President Biden if the debt ceiling isn’t raised.
By a margin of 50 percent to 37 percent, Americans do not support raising the debt limit without corresponding reductions in federal spending.
So as Biden’s and, with it, Democratic fortunes have begun to sink as the 2024 election season - especially for President - begins to ramp up. It is not about the proximity to the election - a lifetime or two or three away - but early fundraising.
Democrats are in a pickle. So what do they do? Queue up the spooky music:
Bang the drum of invoking a 14th Amendment provision that was designed to deal with Civil War debt, not periodic, modern-day debt limit increases.
Stupidly and unconvincingly trying to blame Republicans while eschewing all responsibility, our delusional and diminished President’s latest pathetic tactic.
Next: silly talk about minting a trillion-dollar platinum coin (or two! or three!) will soon follow.
Democrats have no leverage unless Joe Manchin and Kyrsten Sinema are spooked enough - with lots of prompting from hand-wringing and well-heeled corporate lobbyists - to agree to eliminate the Senate’s filibuster rules to pass a clean debt limit bill and dump the whole matter back in McCarthy’s lap. That’s the only way Democrats gain leverage in this process, so it can’t be ruled out.
That’s not likely to happen for reasons already mentioned - McCarthy has public opinion on his side, and both Manchin and Sinema are facing tough reelection campaigns in their respective states in 2024. But watch this space—money talks. It may be the final card Democrats will try to play before they reach their grief's “acceptance” phase and cut a deal with McCarthy.
A “default” would be a disaster, and some believe it may be what Biden, Harris, and their progressive White House staff want. Remember, these are veterans of the Obama Administration who always wanted to take America down a peg or two. They’re doing a pretty good job of it, and tanking America’s dollar as the world’s reserve currency would be quite the accomplishment, despite the cost to America’s economy and retirement and investment accounts for tens of millions of Americans. I find that hard to believe and hope that’s wrong, but it can’t be ruled out, given their horrific management of things at the southern border and elsewhere. It may suggest that they are cluelessly incompetent, blithely unaware of the circumstances they might leash on America (see: California).
History suggests that cooler and mature heads will work something out. We’ve seen this movie before. Obama, in 2013 caved to demands from Republicans and agreed to a sequestration scheme that was so harmful to national defense that it had to be scrapped. Reports are that Biden’s progressive crew are demanding defense cuts equal to any domestic spending decreases - deja vu, anyone? - despite the pumping of $7 trillion into the economy in new spending since Joe Biden became President, followed by its concomitant inflation.
But in the meantime, look for more silly ideas as politicians without leverage flail to find it. It won’t work.