The most useless debate in America is starting up again as Washington lawmakers are forced to deal with the nation’s debt limit. There’s never much suspense about whether the debt limit will be increased. It will. The suspense is in the political games both parties will play before the issue is resolved and tucked away for another day.
In truth, the debt limit increase vote is silly. Congress is not dealing with real numbers when they say the debt limit needs to be increased from its current level of $28 trillion. It’s crazy that the U.S. government even keeps track of something as silly as the debt limit.
The reason is that there simply is no limit to what the government can spend or how much they owe foreigners who buy our debt so that Americans can live nice, cozy, comfortable lives. As long as the dollar is the dominant currency on planet earth and the go-to currency in international finance, the debt ceiling will be irrelevant. No matter how big it gets, our debt will be serviced by other nations who want our dollars.
The debt ceiling may be irrelevant in the real world but in the political world of make-believe, it’s an extraordinarily potent weapon. When it comes time to raise the debt ceiling, both parties morph into fiscal warriors, calling out the other for their profligacy.
This time, the Democrats have the whip hand. They can determine when the debt ceiling limit will come up for a vote. This is important because of the special circumstances involving the $3.5 trillion budget reconciliation bill.
In the past, debt ceiling votes were fraught because of the 60-vote threshold needed for passage in the Senate. In today’s Senate, that means Republicans have to get 10 of their members to walk the plank and vote for a debt increase — unless the Democrats do them a favor and include the debt ceiling increase in their partisan budget reconciliation bill. That’s not going to happen so in order to avoid a slow-motion shutdown of the government in the fall, Republicans are going to have to play ball.
The question is, what the Republicans will want in return for their cooperation? After all, they’re not going to vote to increase the debt to do Joe Biden any favors. They want payment — upfront and public.
Yet the $3.5 trillion resolution includes everything except the debt-limit increase. Democrats plan instead to pair the debt limit with a short-term spending bill after Labor Day designed to keep the government open after Sept. 30. This means that Minority Leader Mitch McConnell will have to deliver at least 10 GOP votes to overcome a Senate filibuster. The White House on Monday rolled out Treasury Secretary Janet Yellen to provide cover for this gambit, lecturing that raising the debt ceiling is the “shared responsibility” of both parties.
It’s usually the party in power that talks about raising the debt ceiling being a bipartisan issue. Senator Bernie Sanders proved that with his admonition to Republicans yesterday.
This is why Democrats are trying to jam the Senate GOP. Mrs. Pelosi and Senate Leader Chuck Schumer are betting the twin threat of a government shutdown and default on U.S. debt will force Mr. McConnell to blink, and give Democrats the votes to get GOP fingerprints on the debt limit and solve their autumn problems.
“At the end of the day, Republicans understand that in the midst of Covid and climate change, they’re not going to destroy the economy,” threatened Senate Budget Chairman Bernie Sanders this week. This is the same Bernie who voted against the debt-limit increase in a showdown between Barack Obama and House Republicans in 2011.
Unless Sanders has had a “Come to Jesus” moment in the last 10 years, he doesn’t care about the debt ceiling vote as much as he cares about sticking it to Republicans.
The debt ceiling will be raised, probably after a lot more drama and hand wringing. But beyond entertainment for the political class, it’s just sound and fury signifying nothing.