Greetings All!
Before we move on to the “Now What” in the “As the Default Clock Ticks” crisis, a little look back at last week’s House vote on McCarthy’s POS Bill:
Democrats- 0 Yes 211 No 0 Present 2 Not Voting
Republicans- 217 Yes 4 No 0 Present 1 Not Voting
Totals- 217 Yes 215 No 0 Present 3 Not Voting
I highlighted the 2 Dems. who did not vote for a reason (BTW, they were Peter’s CA-50 and Watson-Coleman NJ-12). If these two (2) Dems. had been present and voted “no”, the tally would have been 217 to 217 and the Bill would have failed, greatly embarrassing Barely Speaker McCarthy. I am not meaning to criticize these Dems. because I don’t know the reasons for their apparent absence. They or a member of their family could have been ill or had some other significant problem in their lives they had to deal with (anyone who might know the circumstances as to why these two did not vote, please chime in in the comment section). I am merely pointing out how the math would have played out. That said, there was also one (1) Republican who did not vote. So assuming he/she would have voted yes, the tally would have been 218 to 217 even if the two (2) Democrats were present and voted “no”. So the absence of the 2 Dems. wouldn’t of mattered.
But what really struck me about this vote was the four (4) Republican “no” votes (Biggs, Buck, Burchett and Gaetz). Yes, these are the four craziest of the MAGA Crazy Caucus, so it can be assumed that their “no” votes represent the fact that the POS Bill was actually not harsh and economically destructive enough for them or they just want a Default as the ultimate destructive tool to Own the Libs. Whatever, their reasons, they have put McCarthy between a rock and a hard place since they leave him no margin to pass any future debt bill.
As Joan McCarter points out in her recent post , McCarthy has portrayed the bill that just passed very differently depending on who he is trying to win over among GOP House members. To the moderates and everyone who is not a member of the Crazy Freedom (or Free-dum) Caucus, he has told them to never mind what’s in the Bill, it is just an initial offer to start negotiations with Biden and the Democrats. However, he has promised the Crazy Caucus that the Bill is the GOP’s Bottom Line, take it or default offer to Democrats. These are obviously two mutually exclusive positions that are unsustainable in the long run. McCarthy has boxed himself into a situation where it’s either default or try to pass some less draconian compromise bill with the help of Democrats. The latter will lose him all the Crazy Caucus votes and insure him having to face a vote on a Motion To Vacate in which he could likely lose his Speakership curtesy of his Crazy Caucus Rulers. For Kevin, there is no visible way out.
BTW- Allow me a little aside here about the sinister nature of the House Bill. The draconian spending caps in the House’s POS Bill do not specifically spell out what should be cut in each program/agency. It leaves that up to Biden should he sign the Bill into Law. So whatever Biden would cut (let’s say Veteran benefits) to meet the draconian spending limits in the Bill, the GOP would simply say they never directed Biden to make that specific cut and try to hang the whole backlash on Biden in 2024. Pretty shitty of them ain’t it? But that’s today’s GOP!
So Now What?
Moving on (that’s enough about the House), what happens next?
Well procedurally the POS Bill goes to the Senate of course where Chuck Schumer has two (2) options as I see it:
1. Option #1 - Sit On It — He can simply declare it dead on arrival and refuse to bring it to the floor. He and Biden can continue to take the hardline that the House must pass a clean debt limit rise bill with no budgetary strings attached and blow off McCarthy’s POS Bill. While this might seem a pleasing option to us, it has its drawbacks. It leave McCarthy’s Bill as the only Bill (passed by at least one House) available to prevent default. McCarthy is already trying to use this to his advantage, arguing that if Biden and the Dems won’t negotiate and we go over the fiscal cliff, the blame should be on the Dems. since Republicans in the House did their job. While it may sound silly to us, it can gain some traction in a media (and already has in some places) that are always looking to blame both sides.
2. Option #2 - Turn the Tables — As some of you probably already know, the Constitution (Article I, Section 7) mandates that:
All Bills for raising revenue must originate in the House of Representatives…
So an argument could be made that the Senate cannot be the body that originates a debt ceiling bill since it sort of deals with revenue (not sure on this, but I’m going with it for the sake of argument). However, once such a Bill is sent over from the House, the Senate is free to amend it any way it sees fit. They can even wipe out all the text in a Bill and replace it with their own text in what is called a Substitute Amendment. Therefore, Schumer could bring a substitute amendment on the House’s POS Bill which simply calls for a clean debt ceiling raise. If Senate Dems. could pass such a substitute amendment it would turn the tables on Republicans in the House by putting the means of preventing default back in the GOP House’s court. Of course, passage of such a clean debt ceiling bill faces obstacles.
One is it would be filibustered by Senate Republicans. Right now there are likely not 10 GOP Senate votes to limit debate on such a bill. Still even if the vote failed, there is value in failure. Politically, it would split the Senate Republicans and flush out which ones currently support the House GOP crazies and which ones bow to their Walk Street masters who want to avoid default at all costs.
But Schumer has a couple other obstacles to putting such a Substitute Amendment on the Senate floor. One he is down one Dem. Senator since Diane Feinstein is out sick and no one knows when she might return. The other is Joe Manchin (what a surprise). As detailed below in an excerpt from another great Joan McCarter Post, Manchin appears to be on-board with much of what’s in McCarthy’s POS Bill:
He’s been aiding and abetting House Republican hostage-taking on the debt ceiling for months, even before the 2022 election; trumpeting Republican talking points; complaining about the nation’s “crippling debt;” and insisting on cuts to Social Security, Medicare, Medicaid, and other programs that he said are “going bankrupt.”
In January he backed House Republicans, insisting that President Joe Biden should be negotiating with the Republican economic terrorists about the debt ceiling, using Republican talking points again. “Every American has to live within a budget. If they don’t, they’re in trouble financially,” he told CNN.
After Barely Speaker Kevin McCarthy finally introduced his hostage demands, Manchin applauded them. Literally. He said “I applaud” McCarthy for his debt ceiling bill. “While I do not agree with everything proposed, the fact of the matter is that it is the only bill actually moving through Congress that would prevent default.” He again demanded that Biden “negotiate now.”
So the chances of Manchin voting to end a filibuster on a clean debt ceiling rise bill now seem minimal at best after his statements in support of the GOP House hostage takers.
With Feinstein out and Manchin a likely “no”, Schumer would only have 49 Dem. votes. Not only is this far short of the 60 he needs, but a Manchin “no” vote will give the GOP cover to continue their economic hostage standoff. So for now, there is no political advantage for Schumer to put forth a clean debt ceiling bill in the form of a substitute amendment to the House POS Bill. However, that could change over time if Feinstein comes back or is replaced and as we inch closer to the default cliff and the Walk Street GOP Senators become more nervous. One would think that somewhere near the eve of Default Day, Schumer could get enough Republican votes to end a filibuster on a clean debt ceiling raise bill (or alternatively, pass a carve out to the filibuster rule with a simple majority), and then pass the substitute amendment in the Senate to force McCarthy’s hand. But we’re not there yet.
Right now the stark choice put to Biden and the Dems. by McCarthy and the rest of the House GOP is either accept a slow painful economic death by a thousand spending cuts or a quick economic death by a shot to the head (I.e., default). Not a real choice since both end in economic death for the US and political disaster for the Democrats in 2024, since the Party in charge usually gets blamed.
So the conventional wisdom among the pundit class is that some sort of compromise will be reached on a bill that raises the debt limit with a “tolerable” amount of spending cuts (“tolerable” being in the eye of the beholder).
There is one such compromise bill that I heard of that has been floated by the Problem Solvers Caucus (a group of moderate House Republicans and Democrats). I know, we all roll our eyes when we hear “Problem Solvers Caucus”, since we often regard them as the Problem Causers Caucus, most of the time rightfully so. But this time, the compromise bill they have floated doesn’t seem all that bad (IMO).
In a nutshell it would raise the debt limit enough to get us through 2024, making it a non-issue in the election. It would not include any spending cuts, but would set up a Commission or panel to study our debt problem and report back to Congress in 2025 with some recommended solutions.
The reason I think this is an acceptable compromise beyond the fact it raises the debt limit without any immediate spending cuts, is that the panel would be able to consider raising taxes on the wealthy as well as or in lieu of spending cuts as a way of lowering the Federal debt. Anyway, they would just be recommendations which a 2025 Congress could ignore.
But frankly I don’t see how McCarthy can pass any such compromise bill in the House and still avoid a subsequent vote on a Motion To Vacate in which he could lose the one thing he values most, the Speaker’s Gavel.
As I mentioned above, the Crazy Freedom Caucus has made it clear that the POS Bill some of them helped pass should be the GOP’s bottom line offer, so they won’t accept ANY compromise bill. That means to pass a compromise bill, McCarthy will need some House Democrats to vote for it which would immediately set off the Free-dum Caucus crazies into calling for a vote to oust him from Speaker, a vote that he could only survive with some votes from Democrats. Such a back room deal seems highly unlikely since why would any Democrat want to help McCarthy after he has pretty much ignored us and shit on some of our members (I.e., unjustly booting Dems. off Committees). Even if McCarthy were to offer some deal sweeteners to Democrats for their votes (e.g., allowing certain Dems. back in Committees, etc.) why should we trust him to follow through? Anyway, I see virtually no chance McCarthy makes a deal with Dems. since any such deal would mean his total loss of control of the House GOP Caucus and likely an endless series of motions to remove him from the Speakership put forth by members of the Freedom Caucus.
Well, that’s enough about McCarthy and the House Republicans, what about Biden and the Democrats?
So far, Biden and the Dems. have been steadfast in their position that they will not negotiate any budgetary matters in connection with a debt ceiling bill, PERIOD!
I think the clip below from the movie “The Fifth Element”. provides a good analogy to McCarthy’s proposal to “negotiate” and Biden’s current response. No, I am certainly not endorsing the use of guns and violence as used in this scene. I just think it humorously captures the sentiment of Biden’s response to McCarthy’s request to “negotiate”. As you watch the clip, picture the Megalor Leader as Speaker McCarthy, the Priest being held hostage as the US economy, and the Bruce Willis character as President Biden, and you will understand the analogy.
Specifically, Biden and the Dems. are united in their position that any talks regarding spending, need to take place in terms of the 2024 Budget negotiations, and not in terms of legislation needed to raise or eliminate the debt ceiling. Hopefully, Biden and the Dems. will stick to this position and not be bullied into some negotiations over the debt ceiling. Yes, this would just kick the can down the road to the September 30 fiscal deadline where either a new budget and appropriation bills are passed by Congress or a Continuing Resolution is passed that allows spending to continue into Fiscal 2024 at 2023 levels, in order to avoid a government shutdown. But a shutdown, should it occur, is not as economically devastating as a default, and I’m sure McCarthy is aware of how badly things turned out for the Republicans the last time they shutdown the government (former Speaker Gingrich).
To close things out for now, my hope is this will end with
”Dark Brandon to the Rescue” as I fully described in this
previous post and advocated for in this
Joan McCarter post. In a nutshell, this would mean that on or near the eve of default, Biden saves the day by issuing an Executive Order directing the treasury to continue to pay all US debts/bills either by minting a trillion dollar coin or by selling bonds (i.e., continued borrowing). This
would involve Biden taking Section Four of the 14th Amendment which states:
“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
and using it to justify his Executive Order. To pull this off politically, Biden would have to issue a prime time address to the Nation where he fully explains to the American people what he is doing, and most importantly what would happen if he allowed a default in terms of its horrendous effects on ordinary Americans. A speech similar to one drafted by nailbender in a recent comment but perhaps with more emphasis on the default ramifications for working class folks and less on the ramifications for Wall Street folks.
Could irate Republicans bring a law suit against Biden’s Executive Order claiming that it should be struck down because it violates the debt ceiling law? Possibly, but Biden could counter that the law violates the 14th amendment of the Constitution and therefore in and of itself, is unconstitutional. No one can be sure what the current SCOTUS would do with this month’s down the road, but they would have to realize that a decision which strikes down the Executive Order would immediately result in a US Default, something that their Wall Street influencers definitely don’t want.
So far there is not a peep out of the White House that such an Executive Order is being considered. Perhaps some courageous reporter will muster up the courage to ask Biden if it’s on the table. But there are a couple of things that suggest it is:
1. So far Biden has not given any indication that he is ready to negotiate over the debt ceiling, leaving one to believe that folks in the White House are at least contemplating an Executive Order; and
2. If, at some point it comes down to either Biden issuing the Executive Order or Default, one has to believe Biden will issue the order.
Stay Tuned! Will try to post updated diaries on this as things develop and I have time.