Some Gullible Skepticism on the Debt Ceiling

Here’s some analysis from Greg Sargent that’s enough to make one nauseous:

There’s no way around it: Republicans have won the political war over the debt ceiling. The House is set to vote today on a proposal for a debt ceiling hike without any spending cuts attached. It will be rejected — the GOP is unified against it, and even some Democrats will vote No. This is the “clean” vote Dems originally sought, but it’s now clear that Dems think it’s politically impossible not to accede to the GOP demand for deep cuts in exchange for raising the debt ceiling.And so, with the Biden-led deficit negotiations set to resume this week, Mitch McConnell has now begun insisting that big Medicare cuts will be necessary in exchange for GOP support for the debt ceiling hike. Thanks to their willingness to draw a hard line at the outset, Republicans now appear poised to win big concessions in exchange for supporting something that they and everyone else have already said is inevitable.

In fact, it’s so nauseating that I’m having a hard time believing it: thus, the title of my post.  Maybe I am just being gullible about this.

The Republicans are in deep trouble over Medicare.  They lost a safe GOP House seat because of it.  Obama’s poll numbers are going up because of it.  The Democrats now have an advantage in the generic congressional ballot because of it.  McConnell’s gambit is to take it off the table by forcing the Democrats to sign onto Medicare cuts in exchange for raising the debt ceiling.  And the Democrats are going to go along with it?

There are several possibilities, then, that could explain this report.

1)  The Democrats are so blitheringly idiotic that they are cutting their own throats.  In other words, gross political malpractice.

2)  The Democrats actually want to cut Medicare, and are using this as a justification.

3)  Sargent is wrong; the mere fact that the Dems won’t vote for a “clean” debt ceiling increase doesn’t mean that they aren’t pushing for it; it’s just that they have other pressure points to use, namely, the fact that the GOP’s money masters will not let them sink the credit of the United States Government, and put billions of their dollar-denominated assets into question.  Republican donors are selfish plutocrats, but when push comes to shove, they are selfish first, plutocrats second.

At this point, I am still leaning toward Door #3.  This is mostly because I don’t believe that Obama is a political idiot, and I do believe that he sees health care policy as central to his legacy.  On Medicare, this is the man who closed the donut hole, and is now pursuing some of the most important efficiency reforms in Medicare’s history. I’ll need a lot more data before jumping to conclusions.  Besides, one central fact jumps out at me from Sargent’s report: he is focusing almost entirely on the House Democrats, perhaps the least-relevant caucus in the negotiations now.  I wouldn’t draw many conclusions from what they are doing.

I have no idea what’s going on inside Biden’s negotiations over the debt, but I have yet to see that reporters do.  And now that I think about it, I’m not even sure that the people inside the room know, either.

Obama does this a lot; sacrifices on the rhetoric, and then we find that he has gotten what he wanted from the beginning.  The budget deal a couple of months ago was a good example: turns out that the federal government will spend $3 billion more this year than it would have otherwise.  That’s not to deny that a lot of the cuts were awful, but they were far less awful than they could have been, and they wound up weakening Boehner and enraging his caucus, getting that caucus to go all-in on the Ryan plan, which has injured them more.

I’m fully prepared to lambaste the President, but I don’t see it here.  Yet.

UPDATE: If you believe TPM, I’m right.  So far, Obama hasn’t caved.  The quotes coming from the GOP appear to become more and more desperate. 

“Unfortunately, what we did not hear from the president is a specific plan of his to deal with the debt crisis,” sad Rep. Jeb Hensarling (R-TX).

That’s because if he’s smart, you’re not going to get one, Jeb.  You’re in big trouble on Medicare, and Obama isn’t going to bail you out (again, if he’s smart).  He’s going to wait for your Wall Street Galtian overlords to start screaming at you.

Author: Jonathan Zasloff

Jonathan Zasloff teaches Torts, Land Use, Environmental Law, Comparative Urban Planning Law, Legal History, and Public Policy Clinic - Land Use, the Environment and Local Government. He grew up and still lives in the San Fernando Valley, about which he remains immensely proud (to the mystification of his friends and colleagues). After graduating from Yale Law School, and while clerking for a federal appeals court judge in Boston, he decided to return to Los Angeles shortly after the January 1994 Northridge earthquake, reasoning that he would gladly risk tremors in order to avoid the average New England wind chill temperature of negative 55 degrees. Professor Zasloff has a keen interest in world politics; he holds a PhD in the history of American foreign policy from Harvard and an M.Phil. in International Relations from Cambridge University. Much of his recent work concerns the influence of lawyers and legalism in US external relations, and has published articles on these subjects in the New York University Law Review and the Yale Law Journal. More generally, his recent interests focus on the response of public institutions to social problems, and the role of ideology in framing policy responses. Professor Zasloff has long been active in state and local politics and policy. He recently co-authored an article discussing the relationship of Proposition 13 (California's landmark tax limitation initiative) and school finance reform, and served for several years as a senior policy advisor to the Speaker of California Assembly. His practice background reflects these interests: for two years, he represented welfare recipients attempting to obtain child care benefits and microbusinesses in low income areas. He then practiced for two more years at one of Los Angeles' leading public interest environmental and land use firms, challenging poorly planned development and working to expand the network of the city's urban park system. He currently serves as a member of the boards of the Santa Monica Mountains Conservancy (a state agency charged with purchasing and protecting open space), the Los Angeles Center for Law and Justice (the leading legal service firm for low-income clients in east Los Angeles), and Friends of Israel's Environment. Professor Zasloff's other major activity consists in explaining the Triangle Offense to his very patient wife, Kathy.

19 thoughts on “Some Gullible Skepticism on the Debt Ceiling”

  1. Whew, almost thought you were going to rush in and criticize Obama while it could matter, instead of waiting to rue what he ” had” to do once it’s too late. Glad you were able to snap to your senses, otherwise you could have risked noticing that how he out Bushes Bush again and again and again, and that would be painful.

  2. “1) The Democrats are so blitheringly idiotic that they are cutting their own throats. In other words, gross political malpractice.”

    This was my first guess, based on a well-confirmed induction about Democratic tactical intelligence. Needless to say, I hope you’re right.

  3. 3) Zazloff is missing something. Always deserves to be in the list.

    After all, I might not particularly like these Democrats, but as elected politicians, they possess something we both lack: A track record of being able to predict what will sell with the voters. I expect that their polling is currently telling them that raising the debt ceiling absolutely does not.

  4. Brett,

    The Democrats also have a remarkable inability to explain simple things to the voters, and often an unwillingness to try. In that respect the GOP noise machine is a “success,” if you define “success” as building popular support for insane ideas.

    Not raising the debt ceiling is madness. Raising it may not be popular now, but the consequences of not doing so are likely to be considerably less popular. Frankly, I don’t understand the strategy of those Democrats who voted against the bill.

  5. So, fiscal conservatives hate “out of control”, “big government spending”. There is a lot the government spends money on, much of which surely ticks off conservative impulses. But most of it is also relatively small. The really big stuff – and that which has been and is projected to grow – is mostly medicare. (We could add in defense but that doesn’t set off the same sort of moral alarms).

    So really, when fiscal conservatives talk about big government spending, when they’re being honest, they’re talking about medicare, right? Yet this is a program that people really like, which isn’t particularly wasteful, nor particularly big government-ish, in that it provides people a service they really care about, and would likely be much worse off without.

    In the end, it always seems a sort of shell game, where “reckless spending” is trumped up in order to sell people on cutting government, while the bulk of the “problem” is something dear to people’s hearts. The Ryan plan merely laid out an honest vision of fiscal conservatism, and freaked people out.

    The question for Democrats, is whether a similar honesty – where taxes are raised to cover increasing medical costs – will suffer the same fate.

  6. First time commenting here – Just want to say that I don’t think there is a war going or any type of debate – Republicans are just standing in the middle of the road with their arms crossed staring down oncoming traffic. There’s no respect for what their constituency thinks, no back and forth regarding political ideas, no anything. They are just being stubborn. It’s not a war; they only want these ridiculous things and they want them NOW. Veruca Salt.

  7. I’ve heard mention here, and nowhere else, the 4th clause of the 14th Amendment to the Constitution. I wonder why the Democrats aren’t bashing the Republicans over the head with it. Stopping payments to Republican contributors—something the administration could be doing right now—might involve some blowback, but asserting the 14th surely doesn’t. I’m going to go with 1) political malpractice.

  8. “I’ve heard mention here, and nowhere else, the 4th clause of the 14th Amendment to the Constitution. “

    It’s not being mentioned elsewhere because it’s such a lame talking point it never got picked up on. If the debt ceiling is reached, and not raised, the government can not borrow any further money. It has numerous options besides stiffing it’s creditors, which basically boil down to immediately balancing the budget.

    I think that’s what’s really got a lot of liberals terrified about the debt ceiling not being lifted. If the government had to balance the budget, and they couldn’t manage to make it painful enough, the voters might get to *liking* having the budget balanced…

  9. Brett,

    I think that’s what’s really got a lot of liberals terrified about the debt ceiling not being lifted. If the government had to balance the budget, and they couldn’t manage to make it painful enough, the voters might get to *liking* having the budget balanced.

    This is delusional.

    “Immediately balancing the budget” is a recipe for catastrophe. What do you think would happen if we suddenly cut Medicare and SS benefits. Do you think we should immediately discharge a significant percentage of the Armed Forces?

    Further, I’d like to know whether all those staunch fiscal conservatives would support a tax increase as part of a longer-run plan to balance the budget. I’m guessing no. Which would mean they don’t give a flying f*** about the deficit, but just want to cut spending so they can hand out more tax cuts to the wealthy, furthering the establishment of a tax-exempt hereditary aristocracy. See Ryan, Paul, for example.

  10. Brett, you confuse the debt ceiling with the budget. Leaving aside the important question of how best to balance the budget, the time to balance the budget was when the budget was a bill in Congress. Now a budget has been passed, and it’s not balanced. Borrowing is required to prevent default. And by “required” I mean “required by the Constitution which expressly forbids default.”

    The debt ceiling is meaningless if default is a possibility. We can tell Treasury to borrow as little as possible to keep the government running, or we can tell them to borrow as cheaply as possible, or add any number of other requirements they must meet, but no law that requires them to default is valid.

  11. So now the House GOP has voted on the record against raising the debt ceiling. If the game of chicken does lead to a head-on crash, they will own the disaster. As they now own Ryan’s plan to end Medicare. The vote looks to my unexpert eye like theatre in preparation for caving in. Touch wood, cross fingers, and pray to St. Antony that it’s so.

    There’s no excuse for the Democrats who voted against. Dogs, would you be elected for ever?

  12. “Brett, you confuse the debt ceiling with the budget.”

    We don’t HAVE a budget right now, and you confuse laws authorizing spending with laws mandating it. The President has all the discretion he needs to avoid a default, if he chooses to exercise it.

    If we default, it will be because the the President has decided to cause a default. Not because Congress left him no choice. It will be because Democrats decided that default was preferable to balancing the budget, even for a matter of weeks.

    There are no crashes in games of chicken without both sides being at fault, chicken is a two player game. If it really were true that Republicans were willing to bring the nation to ruin in the cause of spending cuts, (It’s not.) it would be no less true that Democrats are willing to bring it to ruin in the cause of perpetually growing deficits.

    The reason the 14th amendment talking point hasn’t caught on is that it’s dreck.

  13. Laws authorizing spending are the underpinning of legally binding contracts that have already been signed with various private contractors. Simply not paying them for goods and services is, by definition, default. You can say that the President has discretion to decide who doesn’t get paid—I like to think it would be a long list of Republican contributors—but that doesn’t make it something other than default.

    The Constitution, of course, doesn’t care who blames whom. It simply forbids default, in the clearest possible language. It’s not clear why you consider that argument “dreck,” except that you don’t like the political outcome it implies.

  14. You know what this current crowd of GOP liars want is to turn the United Sates into China, where only a few giant corporations run things, they own the factories, that apartments, the grocery stores, the gas stations, the newspaper and magazine publications, the radio stations, the television stations and you pay them and they get all the benefits, and if you do not like it go jump off cliff. Well some Chinese workers seeing that as individuals that they cannot progress have done just that by committing suicide. The current crowd of GOP liars want to abolish Medicare from the elderly, they want to abolish a woman’s right to choose and have control over her own body, they want to abolish collective bargaining rights, and on top of it all they want to blame the poor, the middle class and the public sector workers for a recession that the GOP created, while their beloved “Fat cats” continue to pay themselves exorbitant salaries, bonuses, fringe benefits. Yes this is the GOP “Radical Right-Wing Social Engineering” that they dream about. The win in New York was the beginning but the next will be Indiana, Iowa, Michigan, Ohio, Wisconsin and later the other states of our nation.

  15. I can say that the US, a huge government, is continually letting new contracts, as old contracts run out, and furthermore typically has a great deal of contractual latitude as to when services contracted for will be delivered, and hence paid for. IOW, I call BS on the notion that federal spending is some unstoppable automaton which the President can’t even slow for an instant. A position you take only because you want to reduce the choices to default, or continued growth in the deficit.

    It’s never been an unstoppable automaton during previous occasions where the debt limit was hit…

    But if you want an easy, perfectly legal savings, he could stop persecuting that illegal war in Libya.

    He could pardon thousands of victimless criminals in federal prisons. Order federal prosecutors to extend prosecutorial discretion in thousands of other cases. Thus saving the cost of all those trials. Heck, he could tell his goons to leave people with medical pot cards in states where it’s legal alone.

    He could issue an executive order to the BATF, telling them to stop buying the Mexican cartels any more machine guns.

    He could tell his wife to stay at home for the next few weeks, that’s got to be good for a few million, easy.

  16. … that’s got to be good for a few million, easy.

    Brett is not a moron; he just plays one on the internet. So he actually does know the following:
    $15 trillion = $ 50,000 per person in the US
    $15 billion = $ 50
    $15 million = $.05
    “A few million” is not even couch change. A few billion is almost — ALMOST — real money.

    The current deficit is what, $5,000 or so per person per year? Now THAT’s real money. We can either tax the “average” American $5K more per year, or reduce government services to the tune of $5K per year for every man, woman, and child in America. Either way — although Brett may not acknowledge it — “balancing the budget” would cost $5K per person per year in either cash or services. Real money, as I say.

    –TP

  17. Of course Brett is the only person on this blog who consistently makes any sense. When D’s failed to pass a budget for this fiscal year, which would require the administration to spend the allocated amounts (one of the stupidest laws ever passed, by the way), failure to increase the debt limit would force the administration and its departments to basically stop spending in excess of revenue – that is impound the remainder of this year’s deficit. And Brett has pointed the way to a number of savings opportunities that are easily available under that scenario.

    Now let’s talk reality. The debt limit is going to be raised, we’re just fighting about the terms. The 90 or so D’s who joined the R’s in the House to vote down the “clean” debt increase Obama supposedly wanted did so because, except for the two Coasts, they know the people want spending controls. It doesn’t matter if the generic vote tips slightly for D’s when they are winning urban districts 10-1. They are losing this argument in every competitive district, the goofy result in NY 26 notwithstanding. That’s the harsh reality staring progressives in the face.

  18. I actually think a focus on House Democrats is warranted. Consider the dynamics of a debt ceiling deal given the following assumptions:

    1. Boehner’s agreement for a debt ceiling deal is required because (absent a leadership change) nothing gets to the floor of the House without his permission.
    2. Obama’s agreement is required because there is no plausible coalition that could override a veto. Given Democratic control of the Senate, there probably isn’t even a plausible coalition that could pass a bill Obama would veto, but I don’t think that makes much difference.
    3. Any deal Obama and Boehner agree to cannot be successfully filibustered in the Senate. Every Democrat and “moderate” Republican would have to vote for it, which gets you to 57 or 58 by my count. If Boehner can’t deliver a few more Republican Senators, he can’t pass a deal in the House, either (more on that below).
    4. As demonstrated by the “shutdown” deal, Boehner cannot deliver 218 Republican votes in the House. There are too many House Republicans who will flat-out refuse to vote for anything Obama agrees to.
    5. However, Boehner remains Speaker, so majority of House Republicans will vote for a deal, if necessary.

    Given these assumptions (all of which I think are well-supported), the marginal player in a debt ceiling deal is a *House Democrat*. As it did with the shutdown, passing a deal is going to require getting enough House Democrats to offset the House Republicans Boehner cannot deliver.

    That being said, I don’t think the behavior of House Democrats in a test vote says much (if anything) about what will happen when the chips are down. I just think focusing on them is warranted because once there is a deal on the table, House Democrats are the only unconstrained players. Personally, I think there is clearly a coalition that will pass a debt ceiling deal in the House and a lot of what we’re seeing is just posturing to determine which members of that coalition will be “turned loose” for the final vote.

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