September 27, 2021
Today, the Senate considered a bill to fund the government until December and to raise the debt ceiling. The Republicans joined together to filibuster it.
Such a move is extraordinary. Not only did the Republicans vote against a measure that would keep the government operating and keep it from defaulting on its debt—debt incurred before Biden took office—but they actually filibustered it, meaning it could not pass with a simple majority vote. The Republicans will demand 60 votes to pass the measure in the hope of forcing Democrats to pass it themselves, alone, under the system of budget reconciliation.
This is an astonishing position. The Republicans are taking the country hostage to undercut the Democrats. If Congress does not fund the government by Thursday, the government will shut down. And if the country goes into default sometime in mid-October, the results will be catastrophic.
We are in this position now because Congress last December funded the government through this September 30 as part of a huge bill. The new fiscal year starts on October 1, and if the government is not funded, it will have to shut down, ending all federal activities that are not considered imperative. This year, such activities would include a wide range of programs enacted to combat the economic crisis sparked by the coronavirus pandemic.
Republicans have said they are willing to pass a stand-alone funding bill. That is, they are willing to continue to spend money going forward, even though to do so at the rate they want means raising the debt ceiling. Indeed, Senators Bill Cassidy, (R-LA), John Kennedy (R-LA), and Richard Shelby (R-AL) joined McConnell today to try to pass a new funding bill that would provide disaster relief to Louisiana and Alabama in the wake of Hurricane Ida and fund the National Flood Insurance Program (NFIP). They complained that “disaster assistance is long overdue” and that “it’s critical” to extend flood insurance “so homeowners are covered come the next storm.”
But while willing to add to the debt, they refuse either to raise taxes or to raise or suspend the debt ceiling that would enable the government to pay for it.
The debt ceiling is the amount of money Congress authorizes the government to borrow. Congress started authorizing a general amount of debt during World War I to give the government more flexibility in borrowing by simply agreeing to an upper limit rather than by specifying different issues of debt, as it had always done before. That debt limit is not connected directly to any individual bill, and it is not an appropriation for any specific program. Nowadays, it simply enables the government to borrow money to pay for programs in laws already passed. If the debt ceiling is not raised when necessary, the government will default on its debts, creating a financial catastrophe.
So, while a measure to fund the government is forward looking, enabling the government to spend money, a measure to raise the debt ceiling is backward looking. It enables the government to pay the bills it has already run up.
Not funding the government means it will have to shut down; not paying our debts means catastrophe. Both of these measures will hobble the economic recovery underway; refusing to manage the debt ceiling will collapse the economy altogether and crash our international standing just as President Biden is trying to reassert the strength of democracy on the world stage.
Led by Senate Minority Leader Mitch McConnell (R-KY), the Republicans are trying to tie the debt ceiling to the idea that Democrats are big spenders. They are determined to stop the passage of Biden’s signature infrastructure packages, both on the table this week: a smaller bipartisan package that funds road and bridge repair as well as the spread of broadband into rural areas, and a larger package that funds child care and elder care infrastructure, as well as measures to combat climate change, over the next ten years.
Both infrastructure measures are popular, and if they become laws, they will reverse the process of dismantling the active New Deal government in which Republicans have engaged since 1981. The Republicans are determined to prevent at least Biden’s larger package from passing. Killing it will keep in place their efforts to whittle the government down even further, while it will also destroy Biden’s signature legislative effort.
But the Republican link of the debt ceiling to Biden’s infrastructure package is disingenuous.
Raising the debt ceiling will enable the government to pay for debts it has already incurred. The Republicans themselves voted three times during Trump’s presidency to raise that ceiling, while they added $7.8 trillion to the national debt, bringing it to its current level of $28 trillion. Further, Biden has vowed to pay for his new package in part by restoring some—not all—of the corporate taxes and taxes on our wealthiest citizens that the Republicans slashed in 2017.
This, Republicans utterly reject.
McConnell maintains that he does not want the U.S. to default on its debt; he just wants to force the Democrats to shoulder the responsibility for handling it, enabling Republicans to paint them as spendthrifts.
It is an extraordinary abdication of responsibility, driving the U.S. toward a disastrous fiscal cliff in order to gain partisan advantage. Treasury Secretary Janet Yellen warns that a default “could trigger a spike in interest rates, a steep drop in stock prices and other financial turmoil. Our current economic recovery would reverse into recession, with billions of dollars of growth and millions of jobs lost.” Financial services firm Moody's Analytics warned that a default would cost up to 6 million jobs, create an unemployment rate of nearly 9%, and wipe out $15 trillion in household wealth.
The U.S. has never defaulted on its debt. Today Senate Republicans voted to make that happen.
In 1866, the year after the Civil War ended, Congress dealt with a similar challenge to the national debt. Democrats eager to undermine the United States wanted to protect the debt the Confederates had run up to rebel against the government, while demanding that the debt the United States had incurred to fight that war be renegotiated. Recognizing the ultimate power of financing to determine the fate of the nation, the Republicans in charge of the federal government settled the issue of the debts assumed by the two sides by writing their terms into the Fourteenth Amendment.
To pull the financial rug out from under former Confederates so they could not raise money to go back to war, the Republicans wrote in the fourth section of the amendment that “all…debts, obligations, and claims” of the former Confederacy “shall be held illegal and void.”
And, to keep the Democrats from destroying the government, the Republicans wrote into the Fourteenth Amendment that “the validity of the public debt of the United States, authorized by law…, shall not be questioned.”
The Democrats will likely split today’s measure in two so they can fund the government ahead of Thursday’s deadline and focus on the infrastructure bills also on the table this week. They will deal with the debt ceiling themselves, later.
I have commented several times in recent days on the debt calumny that Heather so chillingly describes. Over the past generation the Republicans—Newt Gingrich, Mitch McConnell, and Donald Trump—have six times pushed the country into temporary financial closure and employed the raising of the debt limit as their shibboleth. This is the height of fiscal irresponsibility. A temporary financial shutting down of government would abruptly suspend virtually all payments, including Social Security, FEMA, compensation for vital employees, and more. Refusal to expand the debt limit to permit payment for expenditures already authorized by Congress is nihilism to the highest degree.
At one time I was responsible for rating the credit of debt issued by sovereign states and corporations worldwide. Debt default (technically the non-payment of interest or principal on the promised date) is a most serious matter. A few years ago Standard and Poors dropped the credit rating of the U. S. Government below it’s top (AAA) level because of it’s concern about the ‘full faith and credit’on the U. S. Government.
Mitch McConnell is playing a game of chicken with the finances of the U. S. Government. In such an event, it is possible for the Democrats to prevent debt default unilaterally. This may ultimately be necessary, but McConnell’s irresponsibly partisan gun-to-head approach is simply further evidence that he and his sycophants are playing Russian roulette with the financial credibility of the United States. Trump has boasted of six major bankruptcies in which he stiffed his banks and investors and siphoned off major tax credits for himself. McConnell is following in the footsteps of his master.
It's time for Democrat and Independent lawmakers to wake up; no reading between the lines necessary as McConnell is doing exactly what he promised to do. Solution? Double down in the best possible way. More carve outs for the filibuster on voting rights. Pass the necessary funding bills quickly by whatever means available. Take complete ownership of the Biden economic agenda now. The real risk is delay. The country needs time to see and experience the positive effects of the Biden agenda prior to November 2022. The time for hope and hand wringing is past. Delay gives Republicans more time to foment the chaos they believe will help them achieve their reactionary, discriminatory agenda.