Tuesday, August 8, 2017

The return of the debt ceiling, and McConnell's 2011 solution

As you may have read, the debt ceiling is approaching again, and the same people who nearly gave us "skinny repeal" are in charge of making sure the economy doesn't collapse for no reason at all.  Yay!

As a reminder, the debt ceiling is a uniquely American stupidity.  Congress instructs the IRS to collect money in tax revenue, and it instructs the Treasury to disburse money according to annual appropriations and "entitlements," (Social Security and Medicare, mostly).  Since the latter is more than the former, the Treasury has to sell bonds to make up the difference.   However, Congress also has a statutory law that tells the Treasury that they can only have X amount of outstanding bonds.  That limit is the "debt ceiling."  If the debt ceiling is reached, somebody has to break the law.  Either the IRS has to collect more money than they are allowed to collect (ain't gonna happen), the feds have to sell more bonds than they are allowed to sell (also ain't gonna happen), or someone's not gonna get paid.  Problems ensue, particularly if that someone is a bond-holder, and investors lose confidence in US Treasury Bonds.  Interest rates spike, investment slows... lots of bad shit.  And the deficit gets worse because it gets harder to finance our debt.

Solution?  Pass a law to raise the debt ceiling.  Except, that it's complicated to do that because, um... well, actually, it's not complicated.  People just think that "raising the debt limit" sounds bad, so certain people like to demagogue about it.  Traditionally, the minority party in Congress demagogues about it, claiming something about how we need to "REIGN IN OUR DEBT!!!" and pretends that failure to raise the debt ceiling is actually fiscally responsible.  A young Illinois Senator named Barack Somethingorother once pulled that bullshit!  However, what has made the GOP different is that after they became the majority in the House in the 2010 election, they forgot to stop demagoguing!  And, the majority kinda needs to vote to raise the debt ceiling...

Since the 2010 election, Republicans have played stupid games, knowing they need to raise the debt ceiling, but trying to figure out how to avoid voting to raise the debt ceiling, even when they are the majority.  As we approach another debt limit, and one that they really might hit this time (!!!), it is worth re-considering Mitch McConnell's 2011 solution.

So, let's step into the Wayback Machine!  Sherman, your assistance please...

In 2011, the GOP had a majority in the House, but a minority in the Senate.  Senate Minority Leader Mitch McConnell understood that the debt ceiling needed to be raised, but he wanted to vote against it, and understood that pretty much every Republican did likewise, even though that couldn't happen in the House.  Profiles in courage, all around.  McConnell's proposal:  shift responsibility.  Give the president the authority to raise the debt ceiling.  Congress could then vote to block the debt ceiling increase, but it would then be subject to a veto, and the debt ceiling would be raised unless Congress had the votes to over-ride it, and that would require 2/3.  Republicans didn't even have a majority in the Senate at the time.  That way, McConnell and the cowards and demagogues could vote against the debt ceiling increase that they secretly wanted to happen without actually stopping it!  Genius!

Actually... yeah.  Kind of, except that it was too transparent.  It doesn't work without plausible deniability, and McConnell's 2011 scheme didn't have plausible deniability.  It was so naked in its cravenness that his own party's hardliners killed it.

Had it passed, though, it would have completely solved the debt ceiling crises during the Obama Presidency.  Obama would have just raised the debt ceiling, Congressional Republicans would have postured, and nothing would have mattered.

What happens, though, if the President is a moron?  What happens if the President is just too stupid to actually raise the debt ceiling?  McConnell's 2011 plan might be the worst thing to have in that totally hypothetical case...

So, the debt ceiling is approaching.  Congress may fail to raise it in time.  Then again, it might be worse if McConnell's 2011 plan had passed...

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