New NY 23rd

The possibility that the federal government will soon be unable to finance its normal operations has become very real. As I wrote in my last column, this won’t be because investors view U.S. debt as excessive; America in 2023 isn’t Greece in 2009. If it happens, it will be because Republicans in the House are trying to use the debt ceiling to extort policy concessions they would have no chance of enacting through the normal legislative process.—Paul Krugman, In defense of debt gimmicks

If the government fails to raise the debt limit before the X-date, the Treasury Department will have to default on at least some bills. Officials might try to pay some debts and not others, but it is not clear whether such prioritization would be politically palatable or practical.–“We Hit the Debt Limit. What Happens Now?” Jeanna Smialek and Ashley Wu “The New York Times,” May 8, 2023

If the government fails to raise the debt limit in time, the Treasury Department will need to take action.

• The Treasury could pay only interest and principal on its bonds.
• The Treasury could arbitrarily pay some bills and not others.
• The Treasury could pay bills as they come due until the money runs out.

None of these are desirable. Bills not paid when due could include Social Security benefits and military salaries.

Other possible expediencies include:

• Congress could temporarily raise the debt limit or suspend it.
• The Administration could ignore the debt ceiling law as unconstitutional under The Fourteenth Amendment.
• The Treasury could adopt a gimmick as suggested by Paul Krugman.
• Congress could repeal the debt limit, resolving today’s crisis and future crises.

Any of the above would be better than default on government bonds, which economists predict would be catastrophic. Of all the problems we face, this should be the easiest to solve: just do it.

Reporters Smialek and Wu conclude:

At the end of the day, all paths lead to the same place: The United States will need to find a way to pay the bills it has incurred. The question is how much damage happens along the way.

Seventeenth century pirate crews were nominally democratic much like today’s House. They had norms and rules. The Captain held office at the pleasure of the crew. As in Treasure Island, the Captain could be given “the black spot,” a demand … Continue reading

Posted in Congress, Economics, Political Tagged black spot, Blackbeard, debt ceiling, Speaker McCarthy, Treasure Island, vacate the chair

To fulfill our Nation’s promises of justice, liberty, and equality, every person must have clean air to breathe; clean water to drink; safe and healthy foods to eat; and an environment that is healthy, sustainable, climate-resilient, and free from harmful pollution and chemical exposure. Restoring and protecting a healthy environment—wherever people live, play, work, learn, grow, and worship—is a matter of justice and a fundamental duty that the Federal Government must uphold on behalf of all people. — President Biden

The judges, both of the supreme and lesser Courts, shall hold their Offices during good Behavior, … –Article III, Section 1 of The Constitution. Congress “indisputably has the power under the Constitution” to “enact laws prescribing the ethical standards applicable … Continue reading

Posted in Congress, Political, Supreme Court Tagged Chief Justice Roberts, J. Michael Luttig, Senator Durbin, Senator Graham, The Constitution

Certainly labor, number one concern, every employer, every sector of the economy that I’ve talked to. Keeping workers is hard. There are perhaps people that don’t really want to work, and I’m sorry, but we can’t be all things all people. Just because you don’t want to work doesn’t mean you don’t have to work.–Rep. Langworthy

Rep. Nicholas Langworthy (R-NY) held an unannounced meeting with small business owners in Elmira on Monday, May 6. Reportedly, Rep. Langworthy said:

I think we’re definitely on the cusp of a downturn. I mean, you have the heightened interest rates, the labor crisis, inflation, it has stagnated this economy to the point where we are likely on the cusp or in a recession. We don’t know quite yet. It certainly feels that way. People are a little more cautious with their spending. They’re not making those big, discretionary purchases, and they’re concerned about their bottom line and providing for their families. We have a lot of jobs. That’s the only difference. Right now, we have a lot of jobs if you need a job, you can find a job. We need more people to want to go find a job. That’s one of our biggest crises here, is employers tell me every day they can’t get enough workers. We need to incentivize that, we need to as Americans have this tough conversation. It’s time to go back to work.

I think that what we need to do as Americans have these conversations in our own households and in our communities and I use the bully pulpit of this office to have that conversation. We need to have a strong America. We need a strong workforce. We need to, you know, treasure and honor, not just leisure time. But you know the fact that people you know have a job, they make a living, and they provide for their families and that is a an incredibly honorable thing that we need to celebrate. It’s certainly you know, the time-honored traditions that this country is founded on. You know, self-determination, that you could be whatever you want to be, nothing is pre-ordained for you, and those opportunities exist, and I see those opportunities every day when I travel across this district. We have amazing workforce. We have great people. We have great educational institutions. We just have to get it all working in the same direction. We have our obstacles here in the southern tier, but our best days can be ahead of us.

At a time of record employment, negative Nicholas, with his part-time, high paid job, blames us for not wanting to work. He predicts economic decline, but doesn’t mention his party’s plan for sabotage.

This entry was posted in Congress, Economics, Political and tagged Rep. Langworthy, Work. Bookmark the permalink.

The tired dogmas of the past are inadequate for a vibrant future — we must look forward, not backwards.–Ron DeSantis Tired dogmas? Ron DeSantis is a candidate for President. He explains his views on his web page. Our country is going … Continue reading

Posted in Campaigning, Political, President Tagged Ron DeSantis

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.–Fourteenth Amendment (Section 4)

The debt ceiling crisis continues to dominate the news, with some speculation now that White House officials are wondering whether the Fourteenth Amendment to the Constitution might require the government to continue to pay its bills whether Congress actually raises the debt ceiling or not.—Heather Cox Richardson

Should President Biden ignore the debt ceiling law, The Fourteenth Amendment to The Constitution might well permit it. It would remove the threat of default now and in the future. President Biden surely would prefer that Congress raise the limit or repeal it. However, there is precedent for a president to ignore laws and The Constitution–TFG ignored the Emoluments Clause of the Constitution, our highest law, effectively making it moot (he ignored other laws and norms as well). Ignoring the law would provoke howls of outrage from Republicans, while doing them two favors:

• It would get them off the hook at present.
• It would spare them from future difficulty if there should be a future Republican Administration.

These are two reasons that President Biden might be loath to act; doubtless there are others.

Ignoring the debt limit law would create a constitutional crisis. The Supreme Court has been reluctant to take sides in disputes between President and Congress. If it did take up the issue, it is hard to see how the Justices could reconcile the debt limit law with The Fourteenth Amendment. If they did find the debt limit constitutional, the only obvious remedy would be impeachment, which would not likely succeed and wouldn’t solve the the problem of the deficit if it did.

Accounting tricks have been suggested for resolving the default crisis, trillion dollar coins for example. These would solve the problem with a lie: keeping the debt ceiling law on the books while the debt grows above it. I don’t think it wise to kid ourselves. “We the people” ought to demand that Congress act.

It is generally said that default is unacceptable. Yet Congress may not be able to do its duty. I suspect the solution will be a short term extension of the debt limit, a common expediency.

I have no idea what will happen if, as seems all too possible, we end up defaulting on debt payments because a Republican House refuses to raise the debt ceiling. But it’s not likely to be good. Who will trust the currency of a nation that appears to have politically lost its mind?–Paul Krugman

Today, Sarah Ferris and Jordain Carney of Politico reported that House speaker Kevin McCarthy and House Republicans continue to insist they will refuse to lift the debt ceiling unless they get massive spending cuts and policy changes. These are not normal budget negotiations, which Biden and the Democrats welcome, but a threat to let the U.S. default on its debt. Their willingness to hold the Treasury hostage until they get their way threatens to rip the foundation out from our global financial power.–Heather Cox Richardson

H.R.415 – End the Threat of Default Act has 42 cosponsors, all Democrats.

This entry was posted in Congress, Economics, Education, Political and tagged debt ceiling. Bookmark the permalink.

In religion and politics people’s beliefs and convictions are in almost every case gotten at second-hand, and without examination, from authorities who have not themselves examined the questions at issue but have taken them at second-hand from other non-examiners, whose opinions about them were not worth a brass farthing.–Mark Twain

Speaker McCarthy hides his party’s lack of significant accomplishments behind a list of dubious ones. Democrats won’t be fooled. Some of those bullets are bad ideas, some would have happened anyway, others haven’t happened and won’t.

Commitment

Speaker McCarthy’s intended audience is Republicans, particularly far-right Republicans. He needs to convince them that he is moving their agenda, so he can claim their support on must-pass bills. He needs to raise or repeal the debt ceiling, possibly act on firearms, and pass a farm bill. To do this he needs the support of the right-wing of his party. His other option is to seek support from Democrats, which sadly has been anathema for the GOP.

McCarthy’s first test may be to a farm bill. Red states will want more for farmers, Blue States will want more for SNAP, the far-right will want less for both. We will soon see if the GOP can write a farm bill that will pass the Senate and win support from the far-right or alternatively from enough Democrats to offset the far-right vote in the House.

Seventeenth century pirate crews were nominally democratic much like today’s House. They had norms and rules. The Captain held office at the pleasure of the crew. As in Treasure Island, the Captain could be given “the black spot,” a demand for an election. In the House, the equivalent is a motion to “vacate the chair.”

Pirate captains maintained their position by showing competence and by creating a fearsome reputation. Blackbeard, very successful at piracy, was able to participate in colonial American society, while keeping his leadership position as captian with a reputation for ruthlessness. With his reputation, Blackbeard was often able to win without a fight.

When a potential prize was sighted, the crew voted on how to act–to attack or not. But once a fight started, of necessity the Capitan gave the orders and was obeyed.

Today Speaker McCarthy’s problem is that his caucus is rebellious. He gained his position by granting concessions, which weakened his reputation. He evidently isn’t much feared; he can’t give G. Santos the boot for fear of losing even one vote. In the battle over the debt ceiling, he can’t expect to be obeyed, making his stated intention to avoid default difficult at least.

Does the Speaker have a plan B? He has publicly rejected several potential solutions. He has little room to maneuver left. Rather than winning without fighting, or winning in a fight, he stands to lose the battle.