Oh, yes, the debt ceiling. We keep having to do this dance. Republians snark that the Dems want to raise the debt ceiling so they can run up the nation’s debts even higher. Of course, the truth is that the debt ceiling has to be raised so that Treasury can pay the debts already incurred, often by Republicans. If the United States defaults on debts, there will be really nasty consequences and a lot of pain. Recession, millions of jobs lost, stock market plunge, global instability, you name it. I understand it would cost us more money to borrow in the future. It would be very, very bad.
In the Senate, Mitch McConnell keeps saying that the Dems have the majority, so they can raise the debt ceiling by themselves. But then Republicans use the filibuster rule to keep Democrats from voting on it. None of this is being explained properly on the nightly network television news that I’ve noticed.
According to an article in The Hill, the Democrats could pass a debt ceiling raise through reconciliation, bypassing the filibuster. However, that would kill the big reconciliation Build Back Better bill for the year, because of Senate rules. There are limits to how often reconciliation can be used. I believe that’s what Mitch McConnell is trying to do. During the Obama administration he used the debt ceiling as a hostage to extract spending cuts the Dems didn’t want to make. Now, he’s not asking for anything. He’s just smirking at us.
Yesterday President Biden threw the mess back in Mitch’s lap. Greg Sargent:
On Monday, President Biden shocked the political world by refusing to promise that the battle over the debt limit will be resolved without the United States defaulting on its debts, which would unleash economic calamity.
“No, I can’t,” Biden said, when asked whether he could guarantee resolution. “That’s up to Mitch McConnell.” …
… Biden’s declaration sets up the possibility for an endgame to all this that Republicans might not have anticipated. If this continues, it will soon become overwhelmingly clear that Republicans face a stark choice: Either they drop their filibuster, or we default.
Chicken! We’re playing chicken!
McConnell has benefited overwhelmingly from the failure of media coverage to convey with real clarity precisely what Republicans are doing here. Oozing with bad faith, McConnell keeps insisting he just wants Democrats to raise the debt limit by themselves, offering this idea as though it’s the most reasonable notion in the world, packaged with his usual smarmy smirk.
There was a time when someone like Walter Cronkite would just look at a camera and explain this. If I didn’t watch the MSNBC evening lineup pretty regularly, I wouldn’t know this was happening either.
More to the point, Republicans are filibustering Democratic efforts to suspend the debt limit. They’re actively blocking Democrats from doing what McConnell himself says he wants — that is, for Democrats to deal with this alone. He’s doing this to force Democrats to avert catastrophe in the reconciliation process, to disrupt their push for a multitrillion-dollar social policy bill.
See? What I said. But if Democrats do use reconciliation, they are quickly running out of time to do it, and I haven’t heard they are moving in that direction (although Joe Manchin is for it). And if they don’t …
If so, at that point, the choice for Republicans will be incredibly stark: Either they stop filibustering, or we default. All the game-playing will fall by the wayside. No matter how many times McConnell disingenuously pretends he only wants Democrats to handle this themselves while Republicans block this from happening, and no matter how many times McConnell is credulously portrayed as a savvy operator for doing so, as the days tick down to Armageddon, that will be his choice.
I’m going to bet the Democrats are not going to toss out the beloved Build Back Better bill to raise the debt ceiling through reconciliation. So we either play chicken, or …
… we mint a $1 trillion platinum coin. Seriously. Paul Krugman:
Well, there’s a strange provision in U.S. law that empowers the Treasury secretary to mint and issue platinum coins in any quantity and denomination she chooses. Presumably the purpose of this provision was to allow the creation of coins celebrating people or events. But the language doesn’t say that. So on the face of it, Janet Yellen could mint a platinum coin with a face value of $1 trillion — no, it needn’t include $1 trillion worth of platinum — deposit it at the Federal Reserve and draw on that account to keep paying the government’s bills without borrowing.
Alternatively, Biden could simply declare that the 14th Amendment to the Constitution, which says that the validity of federal debt may not be questioned, renders the debt ceiling moot.
And there may be other tricks I don’t know about.
Felix Salmon writes at Axios that the $1 trillion platinum coin thing could be accomplished very quickly. The coin could be struck “in minutes” at the West Point mint and then helicoptered to New York, to be deposited in the Federal Reserve Bank. End of problem.
I do wish that some deep pocket George Soros type would put up money for a television ad blitz explaining the debt ceiling issue and Mitch McConnells role in it, because most of news media will not report it correctly, and most citizens will decide that whatever awful thing happens is Joe Biden’s fault.