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Tuesday January 17, 2023 · 3:39 PM PST
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Every passing second brings us that much closer to the debt ceiling. The Republicans are threatening to force a default if President Biden and Senate Majority Leader Schumer don’t acquiesce to cuts to the safety net, including Social Security. And increasing the debt ceiling requires a House vote. What to do?
First, I want to clear up a little misunderstanding. Progressive pundits have called this insanity, a product of the chaos of Kevin McCarthy’s weak speakership, the kamikaze mentality, an inability of white America to stomach its diminishing percentage of the population, etc. One very important thing is missing. The Republicans understand that the cuts they’re proposing, particularly without anything in return for Democrats, are going to be unpopular, if not politically suicidal. But not if the Democratic leadership agrees, enabling McCarthy and company to say, “It was bipartisan.” This is how welfare reform and the Reagan budget cuts came about. But with the conservative wing of the Democratic Party on the verge of extinction, extortion is their only option.
But the Dems have several options. Here they are, along with their quality and plausibility:
Stare McCarthy Down
Description: McCarthy claims he won’t allow the debt ceiling without a “blank check” (meaning not implementing a hard-right agenda under a Democratic administration and Senate), but can he really hold to that if it means his party is blamed for a recession? John Boehner couldn’t in 2013. Newt Gingrich couldn’t in the forgotten debt ceiling clash of the mid-1990’s. Even with back benchers threatening a coup, McCarthy caves in.
What’s Up? The description speaks for itself.
What’s Down? It’s true that the Republicans aren’t that much more demanding/insane than in the Obama era, but there’s a reason why they might not be bluffing this time. The corporate lobby used to lean on them when they tried this. Trouble is, not getting the support from more socially liberal corps leaves Republicans no longer advantaged in fundraising. It’s also why they are more willing to criticize those they call “woke corporations” than they used to be. This is one of the realignments that some either don’t understand or find offensive because of how unusual they are. Another topic for another day. But it also means that Wall Street may not have the leverage over Republicans to force them to raise the debt ceiling anymore.
Description: Seeing no way out, Biden and Schumer give in. The result of this capitulation is torturous austerity rather than the murderous kind demanded by House Republicans.
What’s Up? This prevents a default. For 6-10 months. Then they do this again and again until united government returns one day.
What’s Down? It’s a white flag. What won’t McCarthy demand next time? Also, the strong turnout Dems have been getting lately will end if Biden and Schumer capitulate like this.
Description: This is a parliamentary trick that can be used to force a bill opposed by the House majority leadership to the floor.
What’s Up? This has rarely worked, but when it has, it has enabled unlikely legislation to pass Congress. There probably are enough Biden district Republicans who fear for their re-elections that a clean debt ceiling would pass. If we could just get it to the floor of the House…
What’s Down? The reason this was rare even in the days of factional parties is because it directly embarrasses the House leadership to a degree that simply voting against its legislation doesn’t.
Description: Some people may not know that there was a time when divided government didn’t generally slow down legislation. Examples of such compromises include the Tax Equity and Fiscal Responsibility Act of 1982, the tax reform and immigrations deals of 1986, the 1990 deal between George H. W. Bush and Congressional Dems, welfare reform in 1996 and the exchange of a capital gains tax cut for a children’s health care program/more funding for other programs for the poor in 1997. So, against all odds, a new deal occurs with an increase to the debt limit attached.
What’s Up? Ordinarily the chances of this now in a polarized America with an anti-democracy Republican Party are less than one in a million. Not this time. Hear me out, please. How many have already predicted that Kevin McCarthy can’t last long as Speaker? Maybe he’ll realize that he’s on borrowed time and pass a deal Biden can agree to in a last act of revenge.
What’s Down? The chances of this are still minuscule. A pretext for why Republicans won’t make a deal these days is that they were somehow screwed out of their end when it came to the compromises I mentioned earlier. Which isn’t true; Federal outlays as a percentage of GDP went down in the years that followed the 1982 and 1990 deals. Like I said, a pretext. Also, McCarthy and the few Republicans who follow him will demand something. Something that may well be more trouble than it’s worth, especially with only days to get it together.
Description: There’s a law on the books that lets the White House order the creation of platinum coins. Mint a coin with a Statue of Liberty or bald eagle on it with a designated worth of $2 trillion and — voila!
What’s Up? Effectively abolishes the debt ceiling. Provided, of course, the Republicans aren’t dumb enough to think they can get by with this when they control the White House (and are held responsible for the economy).
What’s Down? Risks that businesses and investors will mistake the coin for a sign to take inflationary action.
The 14th Amendment Solution
Description: ”The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” Some argue that this means that the President has the authority to raise the debt ceiling. Joe Biden takes this approach and prepares to defend it on the podium and in court.
What’s Up? Assuming it survives the Supreme Court, gets us past the debt ceiling without tanking the economy. The otherwise scary precedents this would set may be passe. After all, the Republicans frivolously challenge election results and make Democratic control of the Senate a condition to appointing judges and even cabinet members. This could lead to impeachment proceedings, but the votes to tarnish Biden’s record with that may not be there. I can even think a reliable way to get it through the courts: wait until the eleventh hour when they can’t nix this without forcing a default.
What’s Down? This interpretation of the 14th amendment is questionable. That amendment chiefly deals with the rights of citizens. Additionally, it gives Congress the power to enforce it. I wasn’t exaggerating about impeachment proceedings. Senator Tim Scott has supported modest criminal justice and police reforms before yet has claimed before that using the 14th amendment to get past the debt ceiling would be an impeachable offense. So, the House probably will try to impeach if Biden tries this.
Let the Economy Default on the Debt
Description: Seeing no other way out, Biden allows the default. The plan is that since the aggressor in government shutdowns always gets the blame, the Republicans will be spooked by the polls.
What’s Up? Not much except that as everything burns, anger at House Republicans will mount. And with this having ended in lethal failure, will anyone be crazy enough to try it again?
What’s Down? Even a week of default could do some serious damage. Presidents are usually held responsible for the economy. This would be no normal downturn, but you never know.
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Stare McCarthy DownCaveDischarge petitionBudget Deal#MintTheCoinThe 14th Amendment SolutionLet the Economy Default on the Debt