UPDATE: Friday, Jan 13, 2023 · 11:59:53 PM +00:00 · Joan McCarter
New reporting from the Washington Post is dire. The House GOP is planning for a breach, ”part of the private deal reached this month to resolve the standoff between House conservatives and Rep. Kevin McCarthy (R-Calif.) over the election of House speaker.” Sources tell the Post that the proposal would call for making interest payments on the debt, and whatever else they spent on—and what would be allowed to stop—isn’t yet specified.
Treasury Secretary Janet Yellen informed congressional leadership Friday that the Treasury is going to start taking “extraordinary measures” next week to keep the U.S. from breaching the debt ceiling. To be clear, we aren’t bumping up against it yet—that’s likely to happen this summer, possibly as late as September. The timing depends on any emergency or unexpected spending that arises, and how much revenue is brought in this spring in taxes.
“I am writing to inform you that beginning on Thursday, January 19, 2023, the outstanding debt of the United States is projected to reach the statutory limit,” Yellen wrote. “Once the limit is reached, Treasury will need to start taking certain extraordinary measures to prevent the United States from defaulting on its obligations.”
“Failure to meet the government’s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability,” Yellen warned. “Indeed, in the past, even threats that the U.S. government might fail to meet its obligations have caused real harms, including the only credit rating downgrade in the history of our nation in 2011.” That reminder of the last time the maniacs (with an assist from the supposed institutionalist Mitch McConnell) threatened to allow the nation to default is as much a message to Kevin McCarthy and McConnell as it is to the business community and the markets.
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There’s a concerted effort in the White House right now to send the message that what House Republicans have promised to do is dangerous, and that they won’t play along. White House Press Secretary Karine Jean-Pierre told reporters - Friday: “We will not be doing any negotiation over the debt ceiling.” She later added, “It is one of the basic items Congress has to deal with […] and it should be done without conditions.”
They’re also relying on allies to bang the drum. “They have the tiniest majority of one house, and they are prepared to use it to get concessions they know are incredibly unpopular,” said Dean Baker, economist co-director of the Center for Economic and Policy Research. “It would be a terrorist attack on the economy.”
“When the extraordinary measures are implemented, it signifies we are up against the debt limit and the clock is ticking,” Shai Akabas, director of economic policy at the Bipartisan Policy Center, a nonpartisan think tank, told the Washington Post.
The warning comes the same week House Republicans started a game of chicken on the debt ceiling, even instituting House rules that would force their demands that a hike in the debt ceiling be tied to sharp cuts in social spending, including “reforms” to Social Security, Medicare, and Medicaid that would undermine the programs.
The reality the House GOP is up against, however, is that no one else is bound by their rules. They’re not even really bound by their rules—House rules can and have been be sidestepped plenty of times in the. Sending the harsh message to the House—and more importantly to Wall Street and the business community—that the nation’s full faith and credit are in jeopardy is the first volley from the Democrats' side in what will be an ugly battle. The sooner the people who can really bring pressure to bear on the Republicans are engaged, the better.
Happy New Year! Daily Kos’ Joan McCarter is on the show today to talk about the wild garbage fire that was the Republican speaker of the House vote. Kerry and Markos also break down what this onionskin-thin conservative majority can and cannot do in the coming year, as well as what the Democratic representatives can do to make Kevin McCarthy’s life just that much tougher.
