A nightmare before Christmas: Unresolved, Senate debt limit posturing risks a financial crash
The U.S. Capitol. (Drew Angerer/Getty Images)
The myopic partisan brinksmanship that is the predominant pursuit of Congress these days reached a seeming impasse last week over a critical vote to raise the federal debt limit before our elected elites did what they do best: kick the can down the road.
Senate Minority Leader Mitch McConnell, R-Ky., offered the Democrats, who hold the slimmest possible majority in the 100-seat Senate, an “off-ramp” ahead of an Oct. 18 deadline for Congress to increase the government’s $28.5 trillion line of credit. The Democrats lunged at the offer with the desperation of a drowning person groping for a floatation device.
Without such a delay, the nation was on course to default on its debts for the first time one week from today. That would have left the government unable to fund its operations or pay its bills, potentially plunging the planet into a financial catastrophe.
“We dodged a bullet,” a friend observed after McConnell and Senate Majority Leader Chuck Schumer, D-NY., agreed to a stopgap vote that delays a final reckoning to Dec. 3.
He’s right. We did dodge a bullet. You could also say we received a 53-day stay of execution. It also drove the stakes even higher because the new deadline for raising the debt limit coincides with the deadline for passing a resolution to fund the government, a task Congress deferred two weeks ago.
Unless the Machiavellian partisan maneuverings and intraparty feuds of the 117th Congress miraculously resolve themselves by then, our Halloween financial apocalypse will become our nightmare before Christmas. And Schumer’s gratuitous, graceless swipe at McConnell and the GOP after the Senate passed the extension Friday inspires no hope for anything better.
If worse comes to worst, you will could see your investments and retirement savings eviscerated, interest rates and already troublesome inflation will rocket to levels not seen in decades, layoffs and insolvencies will punish businesses large and small, existing scarcities of many groceries and consumer goods because of global supply chain disruptions will worsen, and Medicare benefits will be suspended or terminated, leaving tens of millions of seniors without health care coverage. That translates into everyday lives in heartbreaking ways.
That cute three-bedroom, 2½-bath Cape Cod in a good school district that was to be your starter home, for which you’ve scrimped and saved over more than a decade to pull together a down payment? It’s not happening.
Investments that were deducted from each paycheck and had grown enough over the past 18 years enough to put both kids through four years at State U? Sorry. And don’t look to government-backed college loans or scholarships for help.
The new-to-you used car you’d been eyeing to replace the 20-year-old minivan that now costs you more per month in repairs than would auto loan payments? Maybe a bicycle will suffice.
A procedure that your cardiologist says you must have to open a heart artery that tests revealed is 80% blocked? Medicare is out of cash and you’re out of luck. Get your will in order.
Instead of celebrating 25 years of meeting or exceeding expectations, long hours at the office and several promotions, your boss and the HR rep regretfully inform you that your job is the victim of emergency cost reductions. You’re given a cardboard box and 10 minutes to collect your personal items before security escorts you from the building.
Pay and benefits cease instantly for U.S. soldiers, sailors, Marines and Air Force personnel, as well as care for veterans who’ve already answered their country’s call.
In Ohio, you’ll run into an unemployment system in turmoil. Only this time the feds can’t fund enhanced unemployment support as they did during the pandemic.
Many on the margins, living paycheck-to-paycheck, could face homelessness without the prospect of rent relief from a broke Uncle Sam.
Food pantries go bare, unable to meet demand. Long lines queue outside soup kitchens funded by charities and houses of worship until their endowments also evaporate. Summer gardens that augmented supper tables stand barren in the shorter days and overnight frosts of a gathering winter.
Not that any of this seems to have registered much with those who write our laws, control the nation’s purse strings and could fix the problem quickly. Rather, they assess the predicament for a tactical political advantage.
None of this should surprise anyone who has paid more than peripheral attention to public affairs in the past six months. And there’s abundant blame to apportion.
We can blame our national addiction to credit with scant regard to the ever-larger balance due and the inevitability that it becomes unsustainable sooner or later.
We can blame Democrats, who hold all the elective levers of power in Washington – albeit by paper-thin margins – for their paralyzing schism between progressives and moderates over trillions in new spending the liberals demand.
We can blame McConnell and his GOP conference, still fuming after losing the White House and control of the Senate last fall. Having sworn a blood oath to foil every goal of President Joe Biden for four years, McConnell is ready to let the process fail, greet the subsequent carnage and then gloat over his rivals’ impotence ahead of the 2022 midterms.
Historically, raising the government’s cap on the amount of money it can borrow to pay its bills has been a bipartisan undertaking — a mundane but essential bit of congressional housekeeping — since 1939 when legislation established an overall federal debt limit, then only $45 billion. Never in those 82 years has the government defaulted on its debt obligations and set off a chain-reaction financial crash.
Three times during the term of Republican President Donald Trump, the debt ceiling was raised without partisan roadblocks.
This time, it’s different. Last November, Democrats picked up enough seats to forge a 50-50 tie in the 100-seat Senate with Democratic Vice President Kamala Harris holding the tie-breaking vote.
There was a time when a functioning Senate routinely allowed a debt ceiling vote to proceed unimpeded by the threat of a partisan filibuster.
McConnell had said since July that no such accommodation would be forthcoming this fall from Senate Republicans. He relented last week, allowing GOP senators to contribute 11 votes to forgo a filibuster and bring the stopgap measure to raise the debt ceiling by $480 billion to an immediate vote that passed 50-48. But Republicans warn that Democrats are on their own in raising the debt limit in December.
Democrats, with their internal divisions, enable McConnell and the GOP to create an impasse by exploiting Democratic divisions that make it impossible at times for the party to muster a simple Senate majority.
Progressive Democrats in Congress want to pass a package of clean-energy and social programs as large as $3.5 trillion over 10 years as a precondition for allowing passage of $1.8 trillion package of overdue, basic infrastructure needs such as roads, rails, waterways, power grids and broadband internet.
In the Senate, two so-called moderate Democrats, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, say a $3.5 trillion price tag is a non-starter, leaving Biden and congressional Democrats to negotiate a lesser sum the moderates will accept in return for providing the minimum necessary Senate votes.
Republicans have abetted the misconception that the debt ceiling increase is necessary to cover the two multi trillion-dollar Democratic spending bills. This debt ceiling vote applies only to spending and appropriations already signed into law, including nearly $8 trillion in debt authorized during the Trump years. It would not apply to the pending legislation, even if it somehow passes.
Last week’s postponement at least gives Capitol Hill’s elites time to breathe, to return home on recess and reconnect with real people, and hopefully to realize how much suffering their selfish game of chicken could cause them.
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