ChrisWeigant.com

Debt Ceiling Hostage-Taking Will Happen Again And Again

[ Posted Wednesday, October 6th, 2021 – 15:41 UTC ]

It's rare that I engage in "both-sides-ism," but I have to admit being disgusted by the games being played by both parties over the needed debt ceiling rise. Nobody's hands are really clean on this one, sad to say, even though the sides aren't exactly equal in their culpability -- Democrats really should have taken care of this long before now, but Republicans are nihilistically cheering for the destruction of the American economy (while giving lip service to the idea that "of course that shouldn't happen -- perish the thought!").

In fact, I'm not even going to get into deconstructing the ins and outs of the various machinations under discussion right now in the Senate, because I trust that we are just not going to hit the deadline. Unlike shutting down the government for a few days (or even a few weeks), defaulting on the national debt and not being able to pay our bills would have much wider and much more dire consequences, and it would not be an easy thing to recover from. So I trust it isn't going to come to that, and thus refuse to get lost in the weeds of what Chuck Schumer, Mitch McConnell, and Joe Biden are currently trying to work out.

Instead, I am going to beat the drum (once again) for not just raising the debt ceiling but abolishing it forever. It is the only way out of this mess -- both right now and for all the future times this staredown will happen. Because it will happen, over and over again.

Unless something changes, here is how it will always play out:

If there is a Democrat in the White House and Democrats control both chambers of Congress, then Democrats will raise the debt ceiling with or without Republican help. Now that the GOP has set a new precedent of filibustering the debt ceiling hike in the Senate, it will become harder for Democrats to do this, but it will be done.

If there is a Republican in the White House, then the debt ceiling will get raised no matter which party controls the houses of Congress. If Democrats control one or both houses, they might grumble but they will do the reasonable and prudent thing in the end. If Republicans control either chamber, they will also pass a debt ceiling hike, with nary a peep of concern (as indeed they did, multiple times, while Donald Trump was in office). A few Republicans might vote against it on principle, but enough responsible Democrats will also vote for it, so it will pass.

If there is a Democrat in the White House and Republicans control either chamber of Congress, there will be a monumental showdown. Republicans will engage in shameless hostage-taking, the hostage in this instance being "the American economy." I would say "the worldwide economy," but few Republicans care about anything beyond America's shores these days.

Please note: every single time there is divided government with a Democratic president, Republicans will take this hostage. And whereas before they have always backed down when shamed into doing the right thing (sometimes at the last minute), these days I wouldn't count on that happening any more. Those were pre-Trumpian times, after all. Now the only thing limiting their irresponsible behavior is the capacity for shame and reasonableness among Republicans in Congress. In other words, not much of any limits at all.

Saying all this is not some sort of profound revelation, I'd be the first to admit. It's painfully obvious, in fact (at least, to me). And the only way Democrats can protect themselves from this repeatedly happening is to abolish the debt ceiling altogether. The debt ceiling is not necessary at all. It is an accounting rule that does not need to exist. There is a direct way to get rid of it and at least three indirect ways to at least remove the issue from political hostage-taking for a very long time to come.

The direct way would be to just pass a law which stated: "whenever Congress passes a budget, the Treasury has the authority to do whatever it deems necessary to pay for all the approved spending." No more debt ceiling to worry about, plain and simple. Hostage-taking would become impossible.

The other three ways to defuse the issue would involve much bolder action, either by Congress or by President Joe Biden. The first is the most amusing. The Treasury is limited in how many coins it can mint made of the metals coins were usually made of (silver, gold, copper, etc.). But "platinum" is not on the list. This loophole means the Treasury could, in theory, mint a trillion-dollar coin and deposit it with the Federal Reserve. This would have the effect of obliterating the debt ceiling (at least until another trillion-dollar coin was necessary). But it is a rather fantastical thing to contemplate (for various reasons) and would be unprecedented.

Congress would be required to act for the other two methods. The first way to not just punt the ball down the field but strap it to a billionaire's phallic rocket and blast it off into space. So to speak (ahem). Currently, there are two ways to raise the debt ceiling: by amount or by the calendar. This is largely what the fight in the Senate is now about. Democrats are trying to pass a bill that would set a calendar date in the future (perhaps two years, to put it beyond the midterms). But such a bill can be filibustered, which the Republicans are gleefully doing. So the prospect of this solution happening is pretty infinitesimal, but Democrats could always just bite the bullet and decide to push the date to extend the debt ceiling so far out into the future that it essentially wouldn't matter anymore. Extend it to the year 2050. Or 2100. Or (if you're a Rush fan) 2112 -- pick a year, any year, as long as it is decades in the future. Again: problem solved. Not forever, but for a very long time indeed.

If the debt ceiling has to be raised through budget reconciliation rules, then for some arcane reason they're not allowed to just pick a date on the calendar -- they have to commit to an actual dollar amount. Republicans want Democrats to have to use this method so that whatever figure they choose can be used against them in political ads in the next election cycle: "Senator Smith voted for X trillion dollars in new debt! Vote in a fiscal conservative to end the deficit spending!" But since this is going to be used politically anyway, why not go whole hog? Raise the debt ceiling by one quadrillion dollars. Or just a measly 100 trillion, perhaps. Again, this would effectively abolish the debt ceiling by moving any future vote on it so impossibly down the road that anyone alive today wouldn't need to worry about it ever again.

The last two are politically risky, for obvious reasons (just think of the opposition ads if either one of them were to happen!). But they'd both work as intended -- the football wouldn't just be punted down the field, it would be launched into outer space.

But none of these methods should really be necessary. If the Democrats can find the political will to move the debt ceiling that far into the future, then why not just take a much simpler vote to formally abolish the debt ceiling once and for all? Again: it is nothing short of a pointless and annoying accounting rule that we'd all be much better off without. There are plenty of other countries which operate just fine without a debt ceiling -- we'd just become one of them, that's all.

So if you're sick of partisan games being played every time the issue comes up (with a Democrat in the White House) -- games of Russian roulette, as Biden rightfully pointed out -- then why not just end them, forever? There is no real reason to have a debt ceiling. There is every reason for Democrats to get rid of it, because if they don't they will hamstring any future Democratic president who faces at least one chamber of Congress in Republican hands (or even the current president, if the midterms go badly). End the hostage-taking before it begins. Don't allow Republican bad faith to put the country through this nail-biting ever again.

Abolish the debt ceiling. Forever.

-- Chris Weigant

 

Follow Chris on Twitter: @ChrisWeigant

 

8 Comments on “Debt Ceiling Hostage-Taking Will Happen Again And Again”

  1. [1] 
    John M from Ct. wrote:

    Yup. This kind of commentary is what I'm reading a lot of these days.

    Another pundit suggested, when it comes to the tactic of specifying a new dollar amount limit to future debt, that the 'googolplex' be used. That is ten to the googol power; the googol power is ten to the 100th power. So raise the debt limit to ten to the (ten to a hundred) dollars.

    The number is so large that printing it out in a political ad designed to shame and convict the Democrats would require more physical mass of paper than there is in the universe. In other words, such ads would be impossible - saving the nation from much fuss and trouble in the coming 2022 elections.

  2. [2] 
    MtnCaddy wrote:

    Yep, I've avoided the day to day off not only the debt limit but also the infrastructure and social spending bills. I'm firmly in the"I don't care how it gets done I only care that it gets done.

    I'd get depressed if I followed them too closely.

    In 100% on board with simply eliminating the debt limit foolishness. Trump blew things up and incremental progress and caring about "tradition" just ain't gonna get it done anymore.

    BTW thanks for cranking our the columns, Chris.

  3. [3] 
    andygaus wrote:

    While we're abolishing the debt ceiling, we should institute another budgeting reform, which I believe is currently the law in California: if the budget is not passed on time, lawmakers forfeit their salary till the budget gets done, and their salary may not be restored afterwards.

  4. [4] 
    nypoet22 wrote:

    @andy,

    among the challenges in trying to realize that rule nationally, is that the constitution allows for no voter initiative process. when the highest law of the land says the foxes must guard the henhouse, there's always chicken on the menu.

    JL

  5. [5] 
    nypoet22 wrote:

    chicken pot pie, if we're lucky.

  6. [6] 
    Don Harris wrote:

    You rarely engage in both-sides-ism?

    That's all you ever do.

    What may be rare is you admitting the Deathocrats are not measuring up, but you still point out how Republikillers are worse which you do in all instances, rare or not.

    Usually it is pretending the Deathocrats are really trying to do wonderful things when they are not, such as claiming the basic minimum that Deathocrats are trying to do long after it should have been done is somehow an historic accomplishment.

    "It is the only way out of this mess..."

    No, it is not.

    The only way out of this mess is to stop pretending that there is only a choice between the two divisions of the big money party.

    You should be writing about the People's Party, Andrew Yang's new Forward Party and what Ralph Nader mentioned in the "Strip Mining Democracy" episode of his Radio Hour about 24-25 minutes in.

    GET REAL.

    TAKE THE VACCINE!

  7. [7] 
    MtnCaddy wrote:

    FPC

    C. R. Stucki wrote:


    Cad [12]

    Please explain for me, What is the mechanism by which you believe 'the rich' ("Amazon, Facebook and Google") get rich at your expense? If you think Bezos is overcharging/cheating you when you buy from Amazon, why do you keep doing it? And you do not ever buy anything from Facebook or Google, right? So how do those two profit at your expense?

    They are not taking advantage of me. I enter into a relationship with them voluntarily. And FYI FB and Twitter make money by selling my data to advertisers who can then target me. Makes 'em billions.

    My point is that these companies (along with any of the rich that didn't inherit their millions) need customers that have money to spend to buy whatever they're selling.

    This is why Republican "trickle down" is bad for not only the 90% of us but, more importantly, it's bad for our economy. All tax cuts should be directed at the 90% so that they'll be able to buy the goods and services that employ people and, yes, make more money for the rich along the way. As opposed to, you know, the rich hiding their Republican tax cut money in offshore accounts. To duck taxes and impoverish our nation and its standard of living, BTW.

    A rising tide lifts all boats but ONLY if the tide is rising under EVERYONE'S boat. Otherwise you get what we've endured for 40 years, a few fat cats like Joe Manchin sitting up on their yacht, watching the rest of us drown.

    Much work needs to be done in America. Where will the money come from if not from rolling back at least some of the tax cuts going back to Reagan?

  8. [8] 
    Elizabeth Miller wrote:

    Why are Democrats so afraid of raising the debt limit on their own? My guess is that they just don't know how to explain it to voters. Which is pretty sad.

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