The time has nearly arrived for another melodrama as to whether the United States will raise its debt ceiling in time to avoid various dislocations. A related question (as always in these spectacles) is: who can use the impending threat of hitting the ceiling, and the concomitant prospect of a shut-down of non-emergency government functions, to blackmail whom?
In a speech on Tuesday, President Donald Trump indicated that his cooperation with any move to increase the debt ceiling, thus averting government shut-down, might be contingent on Congress’ support for his wall-building project at the US/Mexico border. “If we have to close down our government, we’re building that wall.”
On Thursday morning, August 24, the President returned to the subject in tweets, in which he said that he had requested that the Republican leadership in House and Senate tie the debt ceiling legislation to popular veterans’ assistance legislation “for easy approval.”
They didn’t do it, so now an issue that “could have been so easy” has become difficult.
It isn’t clear how these claims hang together. If the debt ceiling increase had already sailed through as part of the veterans’ bill, it would not now be available for use as a bargaining chip to get the wall built. So: is Trump content or discontented about its continued availability for that purpose?
Left Wing View
Daniel Gross suggested months ago in Slate that there would be a problem here. In a well-written piece in March, Gross wrote that the Democrats are “not likely to make life easy for the president and House Speaker Paul Ryan by whipping votes for a debt ceiling increase.” Certainly the Republicans were not in the habit of making debt ceiling increases easy and routine during the years of the Obama administration.
A bill to raise the debt ceiling would be subject to filibuster, so even a unanimous Republican caucus would need some Democratic help, as Tara Golshan pointed out, writing for Vox, Thursday morning.
The Treasury Department has determined that the government will have to have the debt ceiling raised on or by September 29 in order to continue meeting its obligations.
Mike Sainato, writing for the RealProgressives website, reminds us that in 2011 the United States received its only credit downgrade in the history of Standard & Poor’s, “due to how close the U.S. came to defaulting on … debt in 2011 amid the debt ceiling debate.”
Sainato’s discussion seems to yearn for what is called a “clean” debt ceiling bill, one that could consist of a single page and attach no conditions. Earlier this month, CNBC reported that although the leadership of the Republican Party had formerly also embraced a clean bill, they have lately been backing off of that idea.
Right Wing View
There is a fair amount of sentiment that a “debt ceiling” should act as a ceiling. It should be something the country bounces off of on the way back down. Thus, drastic spending cuts are the proper approach to preserving the country’s credit in the face of the ceiling. This is the view of the Freedom Caucus in the House.
This was also the gist of a recent tweet by Austin Peterson, though he may not agree with being listed “on the right.” Peterson was the Libertarian Party’s runner-up for the Presidential nomination for POTUS in the last cycle (losing out to Gary Johnson), and the LP generally resists left/right classifications.
Meanwhile, Business Insider tells us that the markets are “freaking out” over this latest round of debt-ceiling controversy.