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“Unnecessary And Replaceable”: It’s Time To Take The Debt Ceiling Gun Off The Stage

There’s long been an expression that’s common in theater: if there’s a gun on the stage, it has to go off. It’s a loose translation of something called “Chekov’s Gun,” and I’ve long believed it’s a helpful metaphor for the debt-ceiling law.

The debt ceiling is a gun that’s been on the stage for nearly a century, and from time to time, we’ve seen lawmakers pick it up, play with it, wave it around, and even make threats with it, though thankfully it’s never gone off. But if we want to make sure no one ever pulls the trigger, there’s really only one logical course: it’s time this gun leaves the stage once and for all.

Now that Congress has approved a “clean” debt-ceiling extension, Democrats hope they’ve re-established a governing norm: extortion schemes using the full faith and credit of the United States will no longer be tolerated. When President Obama said last night, “One of the things that I said throughout this process is we’ve got to get out of the habit of governing by crisis,” I took this as a subtle reminder to GOP lawmakers: this particular gambit is over.

Whether Republicans intend to hold the debt ceiling hostage again remains an open question. Last night, Rep. Tom Massie (R-Ky.) conceded, “I’m going to commit candor here: I think we’ll have less leverage on the next CR & the next debt limit.” Around the same time, however, a Senate Republican leadership aide told a Washington Examiner reporter that the party has “no intention of allowing the next debt limit hike to be ‘clean.’”

Let’s consider that sentence, pause for a moment, and collectively bang our heads against our desks.

Policymakers can end the extortion, the economic uncertainty, and the threat of economic calamity by taking this gun off the stage – or at least unloading it. Josh Green recently talked up one of the more sensible solutions.

Back in 1979, the Democratic House Speaker, Tip O’Neill, handed the unhappy job of lining up votes for a debt-ceiling raise to Representative Richard Gephardt, then a young Democratic congressman from Missouri. Gephardt hated this, and, realizing he’d probably get stuck with it again, consulted the parliamentarian about whether the two votes could be combined. The parliamentarian said they could. Thereafter, whenever the House passed a budget resolution, the debt ceiling was “deemed” raised.

The “Gephardt Rule,” as it became known, lasted until 1995, when the new House Speaker, Newt Gingrich, fresh from the Republican triumph of the 1994 midterms, recognized the same thing that Tea Party Republicans recognize today: The threat of default could be used to extort Democratic concessions. Gingrich abolished the Gephardt Rule, and within the year the government had shut down.

Long story short, under the Gephardt Rule, Congress maintains its power of the purse and approves federal spending. If expenditures are greater than receipts, as they nearly always are, it’s simply automatic that the Treasury will have the borrowing authority to pay the nation’s bills. Gingrich ended the practice, but there’s no reason contemporary policymakers can’t bring it back.

If Congress doesn’t like the Gephardt Rule, there are other alternative solutions. Senate Minority Leader Mitch McConnell (R-Ky.), for example, floated a related idea in 2011 in which the debt ceiling would remain in place, but the legislative burden would shift – the White House would have the authority to extend Treasury’s borrowing, and instead of going to Congress for permission, Congress would only have the power to proactively block Treasury. In other words, instead of needing a “yes” from Congress, lawmakers would only have the ability to say “no.”

There’s also the possibility of a constitutional challenge – there’s a credible argument to be made that the debt-ceiling statute itself violates several provisions of the Constitution, including the 14th Amendment, so it should be struck down in the courts. If not, University of Chicago Law School professor Eric Posner recommends a constitutional amendment to prevent disaster in the future.

There are options. The point, though, is simple: the status quo shouldn’t be left in place.

It doesn’t even have to be seen as a partisan issue – Dean Clancy, who works on policy for the far-right FreedomWorks group, recently endorsed scrapping the debt ceiling, too. Everyone from Tim Geithner to Warren Buffett to Alan Greenspan has reached the same conclusion.

Most modern, industrialized countries don’t have a statutory debt limit for exactly this reason – it’s simply too dangerous. It’s time for the United States to catch up and eliminate this weapon before someone – which is to say, us – gets hurt.

 

By: Steve Benen, The Maddow Blog, October 17, 2013

October 18, 2013 Posted by | Congress, Debt Ceiling, Default | , , , , , , | Leave a comment

“A Very High Price”: A Lesson For Moderates In The Government Shutdown Denouement

We should never govern ourselves like this again. We cannot create absolutely pointless crises that make our great democracy look foolish around the globe. We cannot give Chinese government propagandists fodder as they call for “a de-Americanized world.” We must not allow the extremist politics of a tea party minority to turn our republic upside down.

Our nation escaped the worst. But there were consequences to the decision of a craven House Republican leadership that knew full well it was picking a fight it could not win. House Speaker John Boehner did the right thing at the very end but only after a series of time-wasting gestures designed to coddle his party’s radical wing. These are the folks who denied the dangers of going past the debt ceiling, see the Affordable Care Act as a Stalinist adventure, compare President Obama to Al Capone and, in many cases, still aren’t sure where our twice-elected president was born or what his religion is.

As long as Boehner permits this lunatic fringe — there’s no other way to describe it — to have a virtual veto power in his caucus, we will descend into chaos again and again. And as long as more middle-of-the-road conservatives hang back because they fear primary challenges, scoldings from Heritage Action or occasional insults from the talk-show barons, the Republican Party will remain in receivership.

Those who genuinely want a more moderate approach to politics must also reflect on what just happened. Obama and an astonishingly unified Democratic Party insisted that there could be no negotiation over raising the debt ceiling. It was time, they said, to stand up against government by intimidation. This made many who chase the political center, no matter how far to the right conservatives might drag it, uneasy. Their critiques took many forms: that Obama should “lead” more, that he should be more “involved,” that refusing to negotiate sounded so ill-tempered.

The irony the centrists must confront is that there is now a larger opening for moderate governance precisely because foes of the far right’s extra-constitutional abuses of the congressional process stood firm. In doing so, they brought a large majority of the American people with them. Republicans paid a very high price for a benighted strategy, which gives the most thoughtful among them at least a chance of pushing their party back to more reasonable ground.

And because the effort to hold the country hostage to right-wing demands failed, a crisis of this kind is less likely in the future. Sen. Ted Cruz and those who joined his doomed crusade against Obamacare find themselves discredited. Cruz acknowledged as much when he slipped away, announcing he would not block a deal of the very sort that, just days earlier, he was denouncing as a shameful sellout.

Obama needs to build on this victory. He must push the national and congressional agendas back toward the issues the nation cares about — above all, shared and more rapid economic growth and lower unemployment. This, in turn, means a real effort over the next two months of budget talks to ease deep sequester cuts that are harming the economy in exchange for the first steps toward longer-term deficit reduction.

To keep the initiative, Obama needs to engage with Congress as he never has before. His recent efforts to build relationships with more level-headed conservatives such as Sen. Bob Corker appear to have paid off in this round, and he could use help from such Republicans again. He should extend his diplomacy to members of his own party who stood with him in this fight and who would be bolstered by expressions of presidential gratitude that they have not always received. His task is to build a broad front against crisis-to-crisis governance by rebuilding confidence in government itself and the role it plays in American life.

But nothing good can happen unless Republicans take on their extremists and unless everyone acknowledges that ,at the moment, there is no equivalent on the left side of American politics to the right-wing radicalism that has just put our country through this wasteful and dangerous exercise.

In condemning the paranoid politics of the John Birch Society in 1962, William F. Buckley Jr. asked his fellow conservatives whether they would “continue to acquiesce quietly in a rendition of the causes of the decline of the Republic and the entire Western world which is false.” This is, alas, a live question again. It must be answered forcefully and fearlessly.

 

By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, October 16, 2013

October 17, 2013 Posted by | Debt Ceiling, Default, Government Shut Down | , , , , , , | Leave a comment

“A De-Americanized World”: GOP Antics Are Making The United States Look Pretty Insane Right Now

When there’s a global economic crisis, investors from around the world have spent the last several generations doing one thing: they buy U.S. treasuries. The reasoning, of course, is that there is no safer investment, anywhere on the planet, than the United States of America — which has the strongest and largest economy on the planet, and which always pays its bills.

All of these assumptions, of course, were cultivated over generations, and pre-date the radicalization of the Republican Party.

But what happens when U.S. treasuries are no longer considered safe, Americans can no longer be counted on to pay its bills, and the nation’s most powerful economy chooses to default on purpose? The world starts reevaluating old assumptions, that’s what.

In Britain, Jon Cunliffe, who will become deputy governor of the Bank of England next month, told members of Parliament that banks should be developing contingency plans to deal with an American default if one happens.

And Chinese leaders called on a “befuddled world to start considering building a de-Americanized world.” In a commentary on Sunday, the state-run Chinese news agency Xinhua blamed “cyclical stagnation in Washington” for leaving the dollar-based assets of many nations in jeopardy. It said the “international community is highly agonized.”

I know I’ve been pushing this thesis in recent weeks, but it’s important to remember the unique role the United States plays in global leadership and the extent to which Republican antics in Congress will change the dynamic that’s been stable for the better part of the last century.

No major western power has defaulted since Hitler’s Germany, so this week may add some history to the potentially catastrophic economic consequences, and the world is watching closely.

Indeed, try to imagine explaining this ongoing crisis to a foreign observer who doesn’t fully appreciate the nuances of domestic politics. “Yes, we have the largest economy on the planet. Yes, we want to maintain global credibility. Yes, the process of extending our borrowing authority is incredibly easy and could be completed in about 10 minutes. No, some members of our legislative branch have decided they no longer want the United States to honor its obligations and pay for the things they’ve already bought.”

I suspect global observers would find this truly inexplicable. As it happens, I’d agree with them.

Ezra Klein added yesterday that to the rest of the world, “the United States looks insane right now.”

They’re dealing with real problems that their political systems are struggling to solve. The United States’ political system is creating fake problems that it may choose to leave unsolved.

“The United States was the one bright spot in the world recovery,” says OECD Secretary General Angel Gurria. “It was leading the recovery! Leading the creation of jobs! This unfortunate situation with the budget and debt happens at the moment it was looking good.” […]

At best, the United States is slowing its recovery — and that of the rest of the world. At worst, it’s going to trigger another global crisis. That’s why, Gurria says, his concern isn’t that the United States’ economy is weak, but that its political system is.

It’s heartbreaking that so much of the world is now laughing at us, not because we have crises we can’t solve, but because members of one party — the one that lost the most recent national elections — insist on manufacturing new crises to advance their unpopular agenda.

To reiterate what we discussed last week, there’s a global competition underway for power and influence in the 21st century. Americans have rivals who are playing for keeps. We can either be at the top of our game or we can watch others catch up.

And it’s against this backdrop that House Speaker John Boehner and his Republican colleagues shut down the government, threaten default, fight tooth and nail to strip Americans of their health care benefits, and keep spending levels so low we’re kicking children out of Head Start centers while our global competitors invest heavily in education.

It’s as if some have a vision in which we no longer lead and we aim for second place on purpose.

Great nations can’t function the way we’re struggling to function now. The United States can either be a 21st-century superpower or it can tolerate Republicans abandoning the governing process and subjecting Americans to a series of self-imposed extortion crises.

It cannot do both.

China is talking about “a de-Americanized world.” It’s time for Republicans to decide whether they intend to help them.

 

By: Steve Benen, The Maddow Blog, October 15, 2013

October 16, 2013 Posted by | Debt Ceiling, Default, GOP, Government Shut Down | , , , , , | Leave a comment

“Risky Business”: Corporate Leaders Bemoan Tea Party Default Crisis Created By Their Own Donations

America’s great minds of business and finance have reached a consensus on the government shutdown and worse, the prospect of a debt default: While the latter is worse, both are bad. Those same great minds are well aware how the shutdown came to pass and why default still looms on the horizon, whether next week, next month, or next year.

Yes, the frightened corporate leaders surely know how this happened — because their money funded the Tea Party candidates and organizations responsible for the crisis.

Consider Rep. Ted Yoho (R-FL), a Tea Party freshman whose outspoken stupidity on a default’s potential benefits, such as an improved U.S. credit rating, has provided a bit of dark humor in these dark days. Yoho, a large-animal veterinarian, announced months ago that he would never vote to raise the debt ceiling.

Like most Republican candidates, he had no problem raising contributions from business interests, notably including contractors, insurance companies, manufacturers and agricultural processors — all of which presumably share the horror of default expressed by the U.S. Chamber of Commerce. But no doubt Yoho parroted the usual right-wing clichés about taxes, regulation, labor, and health care, so all the business guys wrote a check without caring that Yoho is an ignorant yobbo.

Or consider Rep. Marlin Stutzman (R-IN), who came to embody the idiocy of the shutdown when he declared “we’re not going to be disrespected” by the White House, but couldn’t articulate precisely what Republicans needed in order to reopen the government and avoid default.  Another low-wattage Tea Party newcomer, Stutzman likewise raised plenty of money from commercial banks, real estate firms, insurance companies, and various manufacturers. Why do these executives write checks to elect someone like him?

Then there are the Tea Party leaders in the upper chamber, including such adornments of democracy as Sen. Ron Johnson (R-WI) and of course Sen. Ted Cruz (R-TX). Johnson says there need be no debt default, no matter what Congress does, while Cruz, the “Defund Obamacare” mastermind, is more culpable than any other single legislator for the paralysis gripping Washington and the country. Johnson’s top donors include an investment firm called Fiduciary Management, Inc., ironically enough, as well as Northwestern Mutual, Blue Cross/Blue Shield, Mass Mutual Life Insurance, and naturally, Koch Industries (which now claims, disingenuously, that it doesn’t favor the Cruz shutdown strategy or a debt default).

As for Cruz, guess who paid for his campaign? Very close to the top of the list of donors for the despised Texan is none other than Goldman Sachs — whose chairman Lloyd Blankfein showed up at the White House a few days ago to bemoan the catastrophic threat of default. Not only did Blankfein and his fellow bankers warn of what might happen if America breaches its full faith and credit, but he even hinted that the fault lies with Republican hostage takers. Which is only partially right, because Blankfein and his fellow financiers need to look in the mirror, too. Cruz also got a big check from Berkshire Hathaway, corporate home of the venerated Wall Street sage Warren Buffett, who just compared the impact of default to “a nuclear bomb.” If that nuke wipes out the markets, Berkshire’s investment in Cruz will have lit the fuse.

If any of these business leaders honestly cared about fiscal responsibility and economic growth – let alone the constant threat of shutdowns and defaults – they could step up to warn the Republicans that the money won’t be there anymore unless they cease and desist from such assaults on democracy. They have more than enough money and power to end this crisis – and make sure it never happens again – but they seem to lack the necessary character and courage.

 

By: Joe Conason, Featured Post, The National Memo, October 11, 2013

October 14, 2013 Posted by | Big Business, Default, Government Shut Down | , , , , , , | Leave a comment

“The Dixiecrat Solution”: The Only Way Out Of This Republican Mess

So you have this neighbor who has been making your life hell. First he tied you up with a spurious lawsuit; you’re both suffering from huge legal bills. Then he threatened bodily harm to your family. Now, however, he says he’s willing to compromise: He’ll call off the lawsuit, which is to his advantage as well as yours. But in return you must give him your car. Oh, and he’ll stop threatening your family — but only for a week, after which the threats will resume.

Not much of an offer, is it? But here’s the kicker: Your neighbor’s relatives, who have been egging him on, are furious that he didn’t also demand that you kill your dog.

And now you understand the current state of budget negotiations.

Stocks surged last Friday in the belief that House Republicans were getting ready to back down on their ransom demands over the government shutdown and the debt ceiling. But what Republicans were actually offering, it seems, was the “compromise” Paul Ryan, the chairman of the House Budget Committee, laid out in a Wall Street Journal op-ed article: rolling back some of the “sequester” budget cuts — which both parties dislike; cuts in Medicare, but with no quid pro quo in the form of higher revenue; and only a temporary fix on the debt ceiling, so that we would soon find ourselves in crisis again.

I do not think that word “compromise” means what Mr. Ryan thinks it means. Above all, he failed to offer the one thing the White House won’t, can’t bend on: an end to extortion over the debt ceiling. Yet even this ludicrously unbalanced offer was too much for conservative activists, who lambasted Mr. Ryan for basically leaving health reform intact.

Does this mean that we’re going to hit the debt ceiling? Quite possibly; nobody really knows, but careful observers are giving no better than even odds that any kind of deal will be reached before the money runs out. Beyond that, however, our current state of dysfunction looks like a chronic condition, not a one-time event. Even if the debt ceiling is raised enough to avoid immediate default, even if the government shutdown is somehow brought to an end, it will only be a temporary reprieve. Conservative activists are simply not willing to give up on the idea of ruling through extortion, and the Obama administration has decided, wisely, that it will not give in to extortion.

So how does this end? How does America become governable again?

One answer might be that we somehow stumble through the next 13 months, and voters punish Republican tactics by returning the House to Democratic control. Recent polls do show a large Democratic advantage on the generic House ballot. But remember, Democratic House candidates already “won” in 2012, in the sense that they received more votes in total than Republicans. Yet the vagaries of district boundaries — partly, but not entirely, the result of gerrymandering — meant that the Republican majority in seats remained, and it would probably take a really huge Democratic sweep to dislodge G.O.P. control.

There is, however, another solution, and everyone knows what it is. Call it Dixiecrats in reverse.

Here’s the precedent: For a long time, starting as early as 1938, Democrats generally controlled Congress on paper, but actual control often rested with an alliance between Republicans and conservative Southerners who were Democrats in name only. You may not like what this alliance did — among other things, it killed universal health insurance, which we might otherwise have had 65 years ago. But at least America had a functioning government, untroubled by the kind of craziness that now afflicts us.

And right now we have all the necessary ingredients for a comparable alliance, with roles reversed. Despite denials from Republican leaders, everyone I talk to believes that it would be easy to pass both a continuing resolution, reopening the government, and an increase in the debt ceiling, averting default, if only such measures were brought to the House floor. How? The answer is, they would get support from just about all Democrats plus some Republicans, mainly relatively moderate non-Southerners. As I said, Dixiecrats in reverse.

The problem is that John Boehner, the speaker of the House, won’t allow such votes, because he’s afraid of the backlash from his party’s radicals. Which points to a broader conclusion: The biggest problem we as a nation face right now is not the extremism of Republican radicals, which is a given, but the cowardice of Republican non-extremists (it would be stretching to call them moderates).

The question for the next few days is whether plunging markets and urgent appeals from big business will stiffen the non-extremists’ spines. For as far as I can tell, the reverse-Dixiecrat solution is the only way out of this mess.

By: Paul Krugman, Op-Ed Columnist, The New York Times, October 14, 2013

October 14, 2013 Posted by | Debt Ceiling, Default, Government Shut Down | , , , , , , | Leave a comment

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