The Debt Limit Chronicles, Oct. 5
One party invites needless economic peril, using arguments it knows are in bad faith. The press gropes for ways to convey this blunt truth—and is finding some.
For those joining us late: the purpose of this series is to see how and whether the press can keep its bearings—and help the public do so—during another dangerous episode in American governance. The previous installments were on September 24, September 26, September 28, and September 30.
You can go to them for many more details. For the moment, here (again!) is a summary of three baseline points, for orientation about the news as it unfolds.
1) The debt limit is not a serious “issue” …
There is no legitimate reason for politicians of either party to oppose raising the federal “debt limit.” None.
The annual federal deficit, and the resulting cumulative federal debt, are the results of decisions about taxes and spending the Congress has already made. They’re not the causes—any more than a thermometer is the cause of a heat wave (or a fever). These are all indicators, not controls.
To use a familiar analogy: refusing to raise the debt limit, after Congress has voted for spending and tax levels, is like running out on the restaurant check, after you’ve ordered and eaten a meal. For the record, the WSJ today has an ed-page piece defending the debt limit. I’ll let you find it and judge it for yourself.
2) … but it is a serious threat.
In practice, “hitting the limit” or “defaulting on the national debt” will not lead to “Foreclosed” signs on federal properties. But it can mean that the U.S. Treasury might have to suspend or curtail its issuance of federal bonds, notes, and bills, which in turn would disrupt markets and economies all around the world.
Another home-spun analogy: right now car-and-truck makers everywhere are hamstrung by a shortage of semiconductor chips. The comparison obviously isn’t perfect, but debt instruments from the U.S. Treasury are the semiconductor chips of world commerce. Without them, a lot of other processes grind to a halt.
Because these consequences would be so dire, it’s unlikely that things will finally go that far. It’s very highly unlikely, but not inconceivable. And that is the problem. The remaining uncertainty—the gap between 99.99% likelihood that the U.S. will avoid default, and 100% confidence—itself has real costs, which will increase with each day closer to the deadline. “You know, the stray dog that bit you probably doesn’t have rabies. But just in case, let’s start these shots….”
3) The crisis didn’t “happen.” One political party intentionally brought it on, and is defending it with arguments that combine cynicism with bad faith.
All these debt-limit hypotheticals would be behind us, and national energies could have been freed to face our zillion other problems, were it not for intentional GOP obstruction.
I am speaking not in generalities but about a specific vote. Eight days ago, on September 27, the Democrats in the Senate voted to suspend the debt limit. Because of Kamala Harris’s tie-breaking role for the Senate, and because the House had already approved a similar measure, that would have ended things. No one, anywhere, would have had to prepare for an unlikely-but-not-impossible very disruptive event.
But now people do have to prepare, for one reason: Mitch McConnell and his Republicans decided to filibuster the debt-limit bill.
The larger evils of the filibuster are not my topic here. (Please read Adam Jentleson’s excellent book.) Its specific role in bringing on this crisis is my point. Even with 50 votes plus-the-Vice-President, the Democrats couldn’t raise the debt limit. But with their 50 votes minus-the-Vice-President, the Republicans could stop them from doing so.
The legislative ramifications of this blockage are complex. But they boil down to this:
—Whoever is in charge of the federal government, which at the moment means the Biden-Harris-Schumer-Pelosi team, has a duty to do what’s necessary to avoid federal default. In practical terms, that will probably mean raising the debt limit through a “reconciliation” bill. That approach wouldn’t be subject to a filibuster, but it is complicated and slow, and therefore it will mean more uncertainty and delay.
As a reminder, this could all have been over, eight days ago. The problem persists only because every Republican in the Senate was willing to stand with McConnell and filibuster the debt-limit bill.
To what end? To judge from Republican senators’ own remarks, as we’ll see in a minute, the motive appears to be “embarrassing” the Democrats by making them scramble to solve this manufactured crisis. Plus, according to John Cornyn, of Texas, bogging them down in parliamentary procedures, to run out the clock and keep them from doing anything else. Cornyn told Manu Raju of CNN that if Democrats “have to eat up little floor time passing the debt ceiling through reconciliation, that's fine with me.”
How it’s coming across in the press.
I’ve gone into this detail to underscore some “framing” points, for judging press coverage.
To call this a “disagreement” is misleading. You can disagree about immigration, or policy toward China, or whatever. This is a nihilistic threat.
To call it an “impasse” or “standoff” is misleading as well. This is the same kind of “impasse” as one between a kidnapper demanding ransom for a captured executive, and a company that believes it should not pay. It is not a level-playing-field difference of view.
And to call it “Washington dysfunction” or “the messy game of politics” also distorts reality. The system may be “broken.” But someone specific did the breaking.
With this in mind, what do we see about recent coverage? Here are some promising signs, of reporters and editors working within media-convention constraints to convey what is happening. I’ve highlighted places where the writer is laying out the realities.
A common trait among these stories is using active-voice verbs—blocked, filibustered, obstructed—rather than nouns like “standoff” or “impasse,” or the passive voice.
—From the Wall Street Journal, a story today by Kristina Peterson and Alex Leary:
WASHINGTON—Senate Majority Leader Chuck Schumer set up a vote by Wednesday on increasing the federal government’s borrowing ceiling, but didn’t lay out how Democrats planned to pass a bill without Republican votes…
Late Monday, he took steps to have a Senate vote on legislation passed last week by the House to raise the debt ceiling through Dec. 16, 2022. But Republicans already telegraphed that they would block the bill during a vote likely to occur on Wednesday. Sixty votes are needed to clear a procedural hurdle, and the Senate is divided 50-50 between Republicans and Democrats.
“Why should we help facilitate their reckless spending and tax increases?” said Sen. John Cornyn (R., Texas). “If they’re going to do it, they need to do it by themselves.” [JF note: This is a combination of specious reasoning—that the debt ceiling affects future “reckless spending”—and cold-blooded Machiavellianism: “They need to do it by themselves.”]
—From Peter Weber, in Yahoo News:
President Biden said Monday he can't guarantee that Congress will raise the debt ceiling before the U.S. defaults on its obligations, unleashing a pointless financial crisis, because "that's up to Mitch McConnell." Senate Minority Leader McConnell (R-Ky.) insists that Democrats increase the debt limit themselves, but the Senate GOP is filibustering their every attempt to do that.
—From Laura Litvan and Mike Dorning of Bloomberg last week:
Senate Republicans blocked a bill late Monday to suspend the debt ceiling until December 2022 and keep the government operating past the end of the fiscal year on Sept. 30. That’s left Democrats no clear alternative to overcome the filibuster except using a budget procedure that could take nearly two weeks.
The GOP maneuver sets the stage for a protracted debate over debt that Republican lawmakers hope will help them portray Biden’s expanded child tax credits, paid family leave and new benefits for Medicare recipients as out-of-control government spending. An eventual Democrat-only vote to raise the debt limit would provide fodder for election attack ads.
—Without going through every example, today the New York Times and Washington Post are also generally presenting this crisis as something someone caused, rather than a standoff that just happened. For instance, a story today called “What Does Mitch McConnell Want?” by Jonathan Weisman in the NYT:
Mr. McConnell has said the government must not be allowed to stop paying its debts; he has also said he will not let any Republicans vote to raise the limit, while moving repeatedly to block Democrats from doing so themselves. Instead, he has prescribed a path forward for Democrats: Use a complicated budget process known as reconciliation to maneuver around a Republican filibuster that he refuses to lift. Asked what he wanted, that was his answer: “As I have said for two months, I want them do it through reconciliation.”
—On the other hand, my favorite news program, the PBS News Hour, featuring some of my favorite people and journalists, yesterday evening offered an almost unalloyed “standoff” perspective, in two segments.
A high-stakes standoff between the president and Senate Republicans is unfolding in Washington over the country's debt limit….
Both sides are dug in as it relates to their stances on the debt ceiling. And it's unclear which side will blink in this standoff.
I’ll view this as a lapse. Journalism is defined as the best version of reality you can come up with, by deadline time. More deadlines are ahead. We’ll see how our institutions—legislative, financial, journalistic—can respond.