Just when I thought the dysfunction in Congress couldn't get any worse, it has. And not by a little, by a lot. What's grabbed the part of my brain that is prone to panic is another fight over raising the debt ceiling.
That's the ridiculous century-old law that requires Congress to vote on paying for the federal debt that already has been incurred. The usual way of describing it is agreeing to pay for the credit card charges you've already made.
For almost all people, that's a non-choice. Of course, we pay for what's already been put on our credit card. If we don't, the credit card company will come after us and our credit rating will take a nosedive.
A New York Times piece, "How the Debt Ceiling Came to Be a Political Cudgel," describes how raising the debt ceiling used to be a routine exercise, but became politicized by both Republicans and Democrats starting in 2006. Even so, we've never defaulted on the national debt, though our nation has come scarily close when brinksmanship gets too close to the default cliff.
Raising the limit used to be a bipartisan nonevent. But, like everything else in Washington over the last 15 years, it has been sucked into the tornado of no-holds-barred politics. In 2006, the Democrats, including then-Senator Joe Biden, refused to support a debt-limit increase by the George W. Bush administration and the Republican majority in Congress, as a protest over the Iraq war and tax cuts. In 2011 and again two years later, the Republicans tried to use their potential support as a bargaining chip, to force the Democrats and Barack Obama to concede on spending cuts.
Each time, columnists and Treasury officials warned about the consequences of default, should the limit not be raised. And each time, in the end, Republicans and Democrats reached a deal, and the crisis was averted.
Things feel different this time, though — not because we’re at any more risk of default, but because of what the details of the fight show about the danger of government dysfunction.
Now we're creeping up to that cliff again. Today Treasury secretary Janet Yellen warned of dire consequences if the debt ceiling isn't raised by October 18 to account for bills racked up by both the Trump and Biden administrations.
Treasury Secretary Janet L. Yellen warned lawmakers on Tuesday of “catastrophic” consequences if Congress failed to raise or suspend the statutory debt limit in less than three weeks, saying inaction could lead to a self-inflicted economic recession and a financial crisis.
The stock market already is warning of such a crisis. Today the Dow dropped 1.6%, the NASDAQ was down 2.8%, and the S&P 500 declined 2.0%.
Much worse will happen if our country actually does default on its debt, even if only for a few days or weeks.
Buyers of Treasury bonds, both foreign and domestic, will demand higher interest rates because of the risk of owning federal debt. So a failure to raise the debt ceiling will make it much more costly to finance additional debt. What's deeply worrisome is that this once unthinkable prospect might be thought of fondly by Senate Republicans.
The New York Times piece explains why.
But there’s something else about the current debt-limit fight that bodes ill for the future. Much of the scare-quote commentary about the possibility of default assumes that it would come about as a result of a miscalculation. But what if it’s intentional? What if one party comes to believe that forcing a default would sink the other, politically, and decides to prioritize its short-term political fortunes over the country’s long-term economic health?
Of course, that "one party" currently is the Republican Party. And probably always will be, because Democrats aren't nearly as nasty and cutthroat when it comes to politics.
Currently Senate Minority Leader Mitch McConnell isn't making any demands in exchange for Republicans agreeing to supply the ten votes needed to break the filibuster that occurred in the Senate today when Democrats tried to raise the debt ceiling.
McConnell keeps saying that because Democrats control both houses of Congress and the presidency, it's up to them to raise the debt ceiling on their own. OK, that argument would make at least a bit of sense if Republicans allowed a debt ceiling bill to pass in the Senate with 51 Democratic votes, Vice-President Harris being the 51st.
But since Republicans are using the filibuster to stop this from happening, the only options left to Senate Democrats are (1) do away with the filibuster for the purpose of raising the debt ceiling, or (2) include a debt ceiling increase, or better, abolition of the law that requires this to occur, in the 3.5 trillion dollar reconciliation bill that would only need 51 votes to pass.
That second tweet is something that hadn't occurred to me. I'd been thinking that McConnell was making a political mistake by forcing Democrats to use the reconciliation bill (which may end up under $3.5 trillion) to increase the debt limit, given the resistance Manchin and Sinema are raising to that bill in the Senate.
I figured that since financial and fiscal disaster would ensue if the debt limit isn't raised by mid-October, this would be a big incentive to get Manchin and Sinema on board with voting for the reconciliation bill -- given that this would be the only way to raise the debt limit, given the resistance of those senators and Biden to doing away with the filibuster.
But the tweet has me worried that since Manchin and Sinema often are willing to play nice with Republicans, even when it's clear that Republicans are trying to destroy the Democratic agenda, one or both of them might be fine with letting the United States default on its debt.
After all, they haven't shown much interest in the reconciliation bill, Sinema more so than Manchin, who at least has put forward his concerns with the bill, while Sinema is just being a roadblock.
If the debt limit can't be raised via the reconciliation bill, and if Manchin and/or Sinema remain opposed to doing away with the filibuster for any purpose, thereby taking away the possibility of raising the debt limit in a standalone bill with 51 Democratic votes, the end result can only be that...
Our country is headed for disaster.
On that cheery note, I'll end this blog post. Hopefully my fear won't come to pass. It's just going to be a scary few weeks as the Republicans, Manchin, and Sinema play "chicken" with our nation's financial security.
One way out of this is if our country's business leaders make it crystal clear that failing to raise the debt limit isn't an option, and if Republicans allow this to happen, they'll pay for it at the ballot box and in much reduced corporate political contributions.