Tag Archives: debt ceiling

An Observation Worth Pondering

I really did not intend to dignify Ted Cruz’ ambition by paying any attention to him; the man is by all accounts (Republican, Democrat, human) a consummate asshole. (Andy Borowitz, who has been on something of a roll lately, tweeted “Poll: 80% of Americans given a choice between Ted Cruz and Scott Walker choose suicide.”)

But when I read this paragraph at Political Animal, I decided it was worth sharing:

[A]bove all, one particular position should disqualify Cruz—or anyone else who holds it—from the presidency: using the debt ceiling as a hostage device. Breaching the debt ceiling would be disastrous. It’s hard to forecast exactly what would happen, but we can somewhat forecast day one after default. The government would have to prioritize its payments. Do you withhold food stamps from low-income Americans? Delay Social Security checks? Maybe we should stop payments on infrastructure projects. Those missed payments would harm millions of Americans and cause mass disruptions around the country as cash flow problems cause companies to become insolvent. Over the long term, it would permanently raise our borrowing costs, making our interest payments more expensive. In short, it would be self-inflicted economic Armageddon. Cruz considers his willingness to risk that catastrophe a selling point, touting his role in opposing the debt ceiling hikes on his website.

Nothing says “I’m totally ignorant of the way the real world works, and I don’t care who gets hurt, because it’s all about ME” like playing political games with the debt ceiling.

 

Looking for the Right Word…

I’m looking for a word. Irresponsible doesn’t quite convey what I’m after. Despicable and corrupt come closer. Bat-shit crazy is a bit too inelegant, and besides, being crazy lets people off the hook–it implies that they don’t really know what they’re doing.

Here’s what generated my search for that perfect word: Yesterday, when the House of Representatives voted to raise the debt ceiling, two Democrats and 199 Republicans voted no.

In other words, 201 Representatives favored an American default on its obligations that would probably trigger a worldwide financial meltdown, because….? Because they don’t approve of debt that the House of Representatives ran up? Because they don’t like the President? (There were 19 bipartisan, no-controversy votes to raise the ceiling when George W. Bush was President.) Because they’re pandering to people who are too stupid or uninformed to know what the debt ceiling is? Because they are too stupid or uninformed to know what it is?

Let me spell this out.

The Constitution requires that Congress make all spending decisions—the President proposes, but Congress disposes. Sometimes–okay, a lot of the time–Congress authorizes more spending than the government collects in revenue. That requires government to borrow the difference, in order to cover the deficit that Congress has already authorized.

For reasons that are not entirely clear, Congress also votes to authorize that necessary borrowing to the extent that it will exceed the previously-set debt limit, or ceiling.

To many of us, this seems a bit silly, since the debt ceiling vote comes from the same Congress that has already voted for the spending that requires the borrowing, but this practice of raising the debt ceiling has generally been uncontroversial, and for years the ceiling has been routinely raised by votes from large, bipartisan majorities. 

Routinely, that is, until the unthinkable happened, and Barack Obama became President.

Dishonest rhetoric to the contrary, failing to raise the debt ceiling would not do anything to reduce the national debt. Congress has already authorized the spending. Instead, it would be a vote for the U.S. to default on what it already owes.

Even using the threat of nonpayment of the nation’s bills as a bargaining chip sends a chilling message to world financial markets and undermines America’s reputation as a sound place to invest.

If Congress actually refused to raise the ceiling, the results would be catastrophic; such a refusal would require the United States to stop paying many of its bills—including amounts owed to senior citizens for social security, defense contractors and members of the military who defend the country, and many others. Economists warn that such a failure to pay our bills could precipitate a worldwide economic collapse.  That’s why John Boehner–who periodically visits reality– ignored the suicide contingent in his caucus, and brought a so-called “clean” bill to the House floor.

I’m still looking for the word that adequately describes the House members who voted not to raise the debt ceiling. Those who knew what they were doing are beneath contempt; those who didn’t understand the implications of their votes are intellectually unfit to hold office.

Whatever you call them, they need to be sent home.

We Didn’t Default….

But too many of our elected officials were perfectly willing to court disaster.

Eighteen Senators voted to continue the shutdown and to stop paying the nation’s bills. One hundred and twenty-six Representatives joined them, and several–including Todd Rokita and Marlin Stutzman from Indiana–blithely assured their constituents that a default “wouldn’t be a big deal”–all credible economists to the contrary.

The GOP brought the country to a screeching halt for three weeks–and for what? To remind us they disagreed with a law that had been passed by a democratic majority to make health insurance accessible to people who didn’t have it.

According to the Standard and Poor index, the government shutdown delivered a powerful blow to our still fragile economy. By the S & P’s estimate, this childish tantrum cost us $24 billion dollars–dollars that Elizabeth Warren accurately described as having been flushed down the drain for a completely unnecessary political stunt.

“$24 billion dollars. How many children could have been back in Head Start classes? How many seniors could have had a hot lunch through Meals on Wheels? How many scientists could have gotten their research funded? How many bridges could have been repaired and trains upgraded?”

We are governed by spoiled brats.

The Law and the Debt….

I had lunch with an old friend yesterday–a former law school dean and noted legal scholar–and our talk turned to the current impasse over the debt ceiling. He asked me whether I was familiar with a 1935 Supreme Court case titled Perry v. United StatesI admitted I’d never heard of it.

Perry, it turns out, is pretty compelling precedent for the proposition that the United States cannot constitutionally be permitted to default on its obligations. The Court relied primarily on language in Article 1, Section 8 of the Constitution, although it also cited Section 4 of the 14th Amendment. My friend sent me a legal memorandum that he had co-authored on the subject. That memorandum included the following paragraph:

In short, the core holding of Perry is that the constitutional “Power” of Congress “To borrow Money on the credit of the United States” carries with it a concomitant duty to pay ― and not to default. While some members of the Court held differing views on the correct factual resolution of the Perry case, all nine justices, including four dissenters, agreed that the United States could not, within constitutional limits, default on its financial or contractual obligations.

The case has been cited with approval by the Supreme Court several times–most recently in 2005.

My friend’s legal conclusion is blunt: If default would be unconstitutional, then the Debt Ceiling Act is unconstitutional if it is read to require default. Since there are a number of federal statutes that confer power on the President and Secretary of the Treasury to borrow money–statutes that are routinely used when the debt ceiling isn’t an issue– and since an unconstitutional Act is void, those statutes would (again, according to the memo) continue to authorize the President to pay the country’s debts.

Makes sense to me, but this is definitely not an area of expertise for me.

Of course, if the President were to follow Perry and pay the nation’s debts, the Obama haters would immediately move to impeach (they would impeach him for breathing if they could).

It’s hard to envision a successful impeachment for actions taken to avoid an international economic catastrophe–but then, it used to be hard to envision a Congress as insane as this one.

There Must Be a Pony Here Somewhere

As if the posturing and idiocy of the shutdown weren’t enough, Ed Brayton quotes Ezra Klein on the GOP’s opening debt limit gambit.

The House GOP’s debt limit bill — obtained by the National Review — isn’t a serious governing document. It’s not even a plausible opening bid. It’s a cry for help.

In return for a one-year suspension of the debt ceiling, House Republicans are demanding a yearlong delay of Obamacare, Rep. Paul Ryan’s tax reform plan, the Keystone XL pipeline, more offshore oil drilling, more drilling on federally protected lands, rewriting of ash coal regulations, a suspension of the Environmental Protection Agency’s efforts to regulate carbon emissions, more power over the regulatory process in general, reform of the federal employee retirement program, an overhaul of the Dodd-Frank financial regulations, more power over the Consumer Financial Protection Bureau’s budget, repeal of the Social Services Block Grant, more means-testing in Medicare, repeal of the Public Health trust fund, and more…

House Republicans are walking into the debt-ceiling negotiations with an opening bid that makes them look ridiculous. This looks like an Onion parody of what the House’s debt-ceiling demands might be. It’s a wonder it’s not written in comic sans.

Words fail.

While there have been recent signs that Boehner may be retreating from the Tea Partiers’ insistence on pushing the world economy into depression if they don’t get their way, this opening demand would seem to prove a point often made by people who object to the “plague on both your houses” or “they all do it” constructions so beloved by the media–the so-called false equivalency.

Perhaps over time, we can count on both political parties to be equally irresponsible, but right now, no one can beat the GOP for sheer lunacy.

At their most idiotic, next to this, Democrats look like statesmen.