Debt Ceiling: You Are Not A-Loan

The Flag Staff Contributor
Debt Ceiling: You Are Not A-Loan
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Debt Ceiling: Political brinksmanship is bringing the Capitol (and the country) to its knees, as debt ceiling talks stand on shaky ground. Here’s what both sides are saying. To have stories like this and more delivered directly to your inbox, be sure to sign up for our newsletter.

Top Story: Debt Ceiling

If you’ve had a hard time trying to monitor the political brinkmanship in Washington over the country’s national debt, you are not a-loan. All kidding aside, the circumstances have been tough to follow, so here’s an overview of where things currently stand.

On Tuesday, Treasury Secretary Janet Yellen said the US could face a recession if Congress fails to raise the debt ceiling by Oct. 18. Remember, the debt ceiling is the maximum amount of money the government can borrow to pay expenses. They do this by issuing bonds or, if the national debt approaches that limit — as it did already on August 1 — then the Treasury Department must use “extraordinary measures” to keep the country solvent.

The House of Representatives passed a bill to extend the borrowing limit through December 2022 and the Senate was scheduled to review the legislation yesterday. However, Senate Minority Leader Mitch McConnell decided to offer Democrats a deal that included two options, Axios’ Alayna Treene reports.

The first allowed “Democrats to fast-track the suspension of the debt limit using the partisan budget reconciliation process. The second allowed them to raise the limit to a specified figure through December.” Democrats quickly signaled that they intended to accept the second proposal.

Negotiations over a short-term debt hike have now spilled over into this morning as Senate Majority Leader Charles Schumer and McConnell haggle over the size of the debt limit increase. 

In a follow-up piece from Axios, Treene notes that “McConnell’s decision was in large part driven by Democrats’ fresh calls to go nuclear and modify the filibuster — which requires 60 votes to move on major legislation — as they sought to break the debt-limit impasse.” Here’s what both sides are saying about the debt ceiling deliberations. 

On The Left

There’s mixed sentiment on the left. Almost universally, each commentator below thinks Republicans are to blame. However, in spite of this, the first writer doesn’t know if Democrats should gamble in the face of a default. The others believe extraordinary measures are warranted, including declaring an exception to the filibuster, minting a $1 trillion coin, or invoking the Constitution. 

“A Manufactured Debt Limit Crisis Is a Bad Gamble for Democrats” Ed Kilgore, NY Mag Intelligencer: “If the US government defaults on its obligations because the statutory debt limit is breached later this month, it will be Mitch McConnell’s fault for filibustering a suspension of the limit. … Republicans are in the wrong here; there’s just no question about it. … On the other hand, ‘being right’ will be cold comfort to the hordes of congressional Democrats who will almost certainly lose their jobs in 2022 if the economy collapses and/or goes into recession thanks to a debt default … ‘It was Mitch’s fault’ is not going to protect Democrats, because voters typically hold the governing party (particularly if it has trifecta control of the White House and Congress, as Democrats do today) accountable for adverse conditions in the country regardless of who’s actually responsible. … So is playing dice with the debt limit a smart move for Democrats right now? Not in my opinion. … If the brinkmanship backfires, there will be hell to pay for a long, long time.”

“Biden has laced into McConnell on the debt ceiling. Now it’s time for an ultimatum.” Jennifer Rubin, The Washington Post Opinion: “Raising the debt ceiling has [nothing] to do with the administration’s current spending proposals. As [Biden] pointed out, it is about paying for debt incurred before he took office, including the nearly $8 trillion in debt that the Trump administration rang up. … All Democrats need [to] do is declare (via a vote with all 50 members plus the vice president) an exception to the filibuster for the debt ceiling so that Democrats can pass the debt-limit increase. … Because today’s Republicans are utterly irresponsible, they should not have a Senate rule preventing the other side from saving the country from ruin. Biden and Democrats would be wise to seize the opportunity to make that case.”

“Biden Should Ignore the Debt Limit and Mint a $1 Trillion Coin” Paul Krugman, New York Times Opinion: “The Biden administration should mint a $1 trillion platinum coin or declare that the Constitution gives it the right to issue whatever debt is needed to fund the government.” How? “Well, there’s a strange provision in US 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. … Of course, if the Biden administration does do something unusual to avoid a debt crisis, Republicans will run blistering ads denouncing the action. But they’ll do that anyway! … So go ahead, Democrats, and do whatever it takes to get through this. Gimmickry in the defense of sanity — and, in an important sense, democracy — is no vice.”

On The Right

Sentiment is somewhat mixed on the right as well. Most conservative commentators think Democrats are to blame because they control all three branches of government. There are others like Jim Jones, a Vietnam combat veteran who served eight years as Idaho attorney general and 12 years on the Idaho Supreme Court, who believe the best option is to just abolish the ceiling altogether.

“The Debt Ceiling Deception” Editorial Board, Wall Street Journal: “No one is preventing Democrats from doing their job. The Democrats can pass anything they want in the House. In the Senate they have 50 votes, plus the Vice President, to pass anything budget related through reconciliation. … The parliamentarian has already said that Democrats can use reconciliation to raise the debt limit, so why won’t they do it? … [Well,] Biden admits that Democrats could raise the limit via reconciliation, but then they’d also have to take difficult votes on many issues on the Senate floor. Some of those votes might be unpopular. [In turn,] Mr. Biden is admitting that the reason is political … Mr. Biden and Senate Democrats are betting that if they blame Republicans loudly enough as the day of debt reckoning arrives, the GOP will cave and give Democrats the political cover they want. … If Congress fails to raise the debt limit, the Democrats who run both ends of Pennsylvania Ave. will be responsible for the consequences.”

“No, Biden, raising the debt ceiling isn’t the other guys’ job” Editorial Board, New York Post: “Republicans are ‘refusing to do their job,’ President Joe Biden thundered Monday … Sorry, Joe: Your decades in Washington surely taught you how this works. It’s the party in power, especially the one that holds the White House, that has to get this done. … Yet Biden seems intent on slamming everyone else for the failure of his insanely ambitious agenda, launched despite Democrats’ desperately thin majorities in the House and Senate. … Biden himself voted against debt-ceiling hikes three times as a senator. … Whining and finger-pointing won’t get the job done now. Negotiate a compromise, or get Chuck and Nancy to bite the bullet and use reconciliation. Stop refusing to do your job, Mr. President.”

“The debt ceiling is useless — and dangerous” Jim Jones, The Hill: “If the president does adopt the position that the debt limit is a nullity by virtue of the 14th Amendment, there will likely be lingering fears about the soundness of investment in American securities and attendant financial uncertainty, not to mention an inevitable raft of legal challenges. The best solution to the debt ceiling dilemma is that suggested by Treasury Secretary Janet Yellen — just abolish the worthless thing. Keeping the debt limit artifice on the law books for misuse by political misfits is like keeping a loaded gun in your kid’s toy box. It serves no useful purpose but could have tragic consequences.”

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When an impending default is not on the radar, most Americans don’t care about the national debt. For example, according to an August Axios/Ipsos Hard Truth Higher Education poll, debt tied with immigration for sixth place behind coronavirus, political extremism, climate, crime, and health care. Similarly, Gallup’s mid-August poll showed that just 2% of respondents think the federal deficit and debt is the most important problem facing the country. As the news cycle focuses on the issue, however, opinions change. This happened during past showdowns in 2011 and 2013. Right before resolutions were reached in each of those years, surveys showed that over 70% of Americans were following debt limit deal negotiations “very” or “fairly” closely.

Anxiety is amping up again this time as well, and now public opinion outlets are trying to determine which party is primed to receive most of the blame. According to a new Morning Consult/Politico poll, “A plurality of voters would hold both parties in Washington equally responsible for a default on the national debt,” but “Democrats would take more heat than the GOP,” Claire Williams reports. “Just 1 in 5 voters said they’d blame Republicans if the US were to default on the national debt,” whereas “Nearly 3 in 10 voters would fault Democrats if such a scenario occurred.”

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Which party would you blame if the United States were to default on its debt? Comment below to share your thoughts.

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