The Debt Limit Chronicles, Sept. 28
It's a hostage scenario, with jobs and businesses being held captive. Some in the press focus on the hostage-takers' skills. Others underscore the stakes. A real-time update.
News has happened, in the 48 hours since the previous two installments in this debt-limit series. First in the series was “The next real-time test for the press.” Next was “The Debt Limit Chronicles, Sept. 26.”
Then late yesterday, September 27 [my sister Katie’s birthday!], the Republicans in the U.S. Senate made good on one of their hostage-taking threats. Through legislative complications I’ll explain in a minute—short version: the filibuster—they prevented the Democratic majority from voting to suspend the debt ceiling, which the House had already done.
Here’s a summary of the relevant who-what-where of what has happened, before we get to the how and why of some press presentations, lower down.
Who-what-where: The players and the issues
For starters, there is no rational reason for the U.S. to have a “debt limit.” None. Practically no other nations do. The reasons are explained in detail here.
The concept of a debt limit didn’t exist in federal governance until World War I, and it wasn’t made into a political weapon until Newt Gingrich began using it that way in the 1990s.
The biggest problem with even talking about a debt limit is that federal deficits and debt are the mathematical results of spending and taxes Congress has already approved. They’re not the causes. They’re comparable to the check at the end of a restaurant meal, or the reading on a bathroom scale.
If you hear someone say, “We need a debt limit to control spending” or “for fiscal responsibility,” either that person doesn’t understand the basics—or is hoping you don’t.
Even given the existence of a debt limit, there is no legitimate reason for politicians of any party to oppose raising it. It’s show-boating, threat-making, and blame-shifting—in a calculated quest to gain political advantage before ultimately giving way.
Why will they ultimately give way? Because hitting a debt limit would mean preventing the U.S. Treasury from issuing notes, bills, and bonds. This in turn would mean huge disruptions in markets, business, and jobs all around the world, starting in the U.S.
No sane politician will finally carry out this threat. The problem is the economic damage done up until that final moment, through brinksmanship and uncertainty.
Under normal majority-rule Senate procedures, this hostage drama would already be over. Yesterday evening Chuck Schumer and his Democrats would have ended the uncertainty by suspending the debt limit.
As a reminder, the Constitution spells out simple-majority rules for most of the Senate’s work, with a handful of specific exceptions. Treaties, impeachment, overriding vetoes, etc. But routine abuse of the filibuster has made 60 votes, not 51, the standard for most significant Senate actions. (As Adam Jentleson explained clearly in his book Kill Switch.)
So even though Chuck Schumer is Senate Majority Leader and had every Democrat behind him, his side “lost” yesterday. They were not allowed even to call a Senate vote on the debt-limit measure.
The Democrats in the House and Senate will eventually get the debt limit raised. But they’ll have to do so by cramming it in as one more item in their already-overstuffed “reconciliation” bill—which, for reasons I won’t get into, is their main chance to get things done without 60 Senate votes. Doing it that way will be much slower, and more complicated, and with much greater risk of collateral damage. (Though it raises other possibilities, as Greg Sargent argues.)
The damage will be to businesses, to workers, to investors, to anyone whose well-being depends on functioning financial markets. And every cent of the damage will be willful and unnecessary. It’s a hostage situation, where the hostage will finally be delivered alive—but with wounds and bruises inflicted through casual abuse. (“They were careless people… They smashed up things.”)
So sayeth the Congressional Record.
The proceedings collected in the Congressional Record can be deadening to read. But I think there is some drama from the official transcript last night, with emphasis [and explanations] added.
The PRESIDING OFFICER. On this vote, the yeas are 48, the nays are 50. [JF: The “real” vote was a 49-49 tie, with Republican Ben Sasse and Democrat Dianne Feinstein not voting. It would have taken 60 to prevail. For routine parliamentary reasons I also won’t get into, Schumer switched his vote to No, when his side had already lost. That led to the 50-48 official vote.]
Three-fifths of the Senators duly chosen and sworn not having voted in the affirmative [ie, falling short of the 60 needed to break a filibuster], the motion is not agreed to.
The motion was rejected…
Mr. SCHUMER. Now, Mr. President, I want to make sure everyone understands exactly what has happened here on the Senate floor. The
Republican Party has now become the party of default, the party that
says America doesn't pay its debts…. Republicans would let the country
default for the first time in history….
None of this needs to happen—none of it.
Naturally Schumer was exaggerating for effect. In the end, the United States is not going to default. The Treasury will cover its obligations.
But everyone could have been sure of that by yesterday, except for the GOP filibuster move. Now everyone has to prepare for the unlikely-but-possible worst case. Here’s a good Washington Post story by Tony Romm, Jeff Stein, and Mike DeBonis on these utterly avoidable costs.
How and why: Press coverage
The press’s job is to help us understand reality. The reality of the moment is that one party is willing to threaten nihilistic damage for the whole economy, in pursuit of short-term political gain.
Coverage that presents that threat as “shrewd” or “savvy” or a symptom of “Washington dysfunction” or “partisan impasse” is obscuring the reality.
So is coverage that treats this as just one more move in the “game of politics.” That is why I have called out the headline at the top of this post, from yesterday’s New York Times, and the jump-page headline for the same story:
And, the online version of the story, which illustrates the Times’s doubling-down on the “game” approach:
In today’s paper, a Times explainer on the debt-limit ended this way:
Would it be a good idea to do away with the debt limit?
Few lawmakers from either party enjoy a vote on the debt ceiling, and the default that would be caused by a failure to raise it would lead to an economic catastrophe. With political polarization in the United States showing no signs of abating, it often seems that the risk of an accidental default outweighs any fiscal responsibility that the debt limit encourages.
However, it would take an act of Congress to do away with the debt limit, and finding agreement there is never easy.
The conclusion is “reality-based.” (“Would lead to an economic catastrophe.”) But the framing is hyper-cautious about taking any side. “Often seems.” “Outweighs.”
Since the “fiscal responsibility that the debt limit encourages” is by definition zero, we could just say: The debt ceiling has become an invitation to reckless and cynical damage. A loaded gun left unguarded in a room.
But let’s look on the bright side
I’m about to illustrate a problem I have complained about. Namely, more details on the critical side, than the reverse.
But let me say that much of the coverage I read or heard last night and this morning was not of the “it’s all a game” category. It recognized the political calculations in what was underway, as I have done here, but also was clear about this not being a “both sides” or “mess in Washington” case. For instance:
The headline in the Washington Post this morning was, “Senate Republicans block measure to fund government, stave off U.S. default.” (The NYT headline, for comparison, was, “Fiscal Stalemate as GOP Blocks Spending Bill.”)
The explainer in the WSJ also pointed out who had engineered the situation, and why.
As I’ve mentioned before, public broadcasters are under enormous pressure not to seem to “take sides.” And the intro for last night’s news segment on NPR’s All Things Considered was from the “both sides”
”There's a political game of chicken playing out in Washington this week, and the stakes could not be higher.”
But the rest of the segment, by Scott Horsely, was clearer:
”Well, Republicans might blink in the coming weeks and decide to stop playing chicken with the full faith and credit of the government, but don't hold your breath. So that means Democrats will have to find a way, most likely through a procedural move that would avoid the threat of a filibuster[ie, the reconciliation bill].”
On PBS, another public broadcaster, Tamara Keith said this, which included both political assessment and reminder of realities:
“Republicans made it clear they don't want their fingerprints on raising the debt ceiling. They want to be able to blame Democrats for that later.
“So, again, this is one of those things where there could be a government shutdown, or this could seem like everything is about to go off the rails, until it jumps on the rails and then the government doesn't shut down…
“What's at stake here, is Joe Biden's whole theory of the case that he can prove to the American people that government can still function in America.”
The TL;DR of today’s installment is: the more you see references to a “game,” the less your friends in the media are doing to explain reality. And the more they describe the economic damage ahead as cynical and unnecessary, the more they are helping you see things steady and see them whole.