the debt ceiling

Today, the United States reached its debt ceiling, which is the maximum amount of debt that it is allowed to have under current legislation. Secretary of the Treasury Janet Yellen can borrow money from pension funds and such to keep up with debt payments and government obligations until June but the responsible thing would be for Congress to immediately either raise the debt ceiling or suspend it. (The most responsible thing would be to eliminate the debt ceiling but no one is even discussing that.)

Like many other governments and corporations, the United States raises some of the money it uses for its operations through issuing bonds. Perhaps you are familiar with the US Savings Bonds program or with Treasury Bills, often called T-bills. The purchasers of these financial instruments are basically loaning money to the government, which then pays it back with interest on the maturity date. While some of these are held by individuals, the vast majority are held by large financial institutions, like banks and mutual funds, or by foreign governments. The United States dollar is considered the world’s reserve currency because of its stability and the reliability of the US government.

If Congress does not pass an increase in or suspension of the debt limit, the US government would default on its bonds, which could cause a steep downturn in both the stock and bond markets, a severe recession, higher unemployment, rising interest rates on loans, and higher prices. The impact would be global because many US government financial instruments are held in or by other countries. It would also cause some countries to mistrust that the United States will keep its word in other areas.

The US government also would not be able to pay its workers or to fully pay Social Security, veterans’ benefits, nutrition programs, and all the other programs that the federal government provides. This would be a huge hardship to many of their constituents, so why would Congress hesitate to raise the debt ceiling?

Politics.

Apparently, one of the things Kevin McCarthy promised in order to get enough “yes” and “present” votes to win the Speakership was that he would not pass a clean bill to raise the debt ceiling. Instead, McCarthy promised that the debt ceiling increase bill would mandate spending cuts, including to programs that are earned benefits, like Social Security.

This doesn’t make sense. The debt ceiling issue has to do with paying the bills for spending that has already been authorized by Congress. The time for debate about cutting the total amount of government spending is when debating appropriation bills for the next budget year.

Furthermore, the Fourteenth Amendment, Section Four to the US Constitution 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.” It seems that the House Republicans are trying to question the validity of public debt by threatening to default on it.

It’s also telling that Republicans passed debt limit increases without making a fuss three times during Donald Trump’s presidency when the budget deficits were higher than they are now under President Biden. Part of the reason deficits were higher was that the Republicans passed large tax cuts for the wealthiest individuals and corporations, thus reducing revenue. At the same time, they cut the budget of the Internal Revenue Service so that it was more difficult to audit and catch high-income tax cheats.

It’s hypocritical for the Republicans to be complaining about the size of the national debt now, because it increased so quickly during the four years of the Trump presidency. 25% of the total national debt is attributable to the Trump years.

If the Republicans were serious about balancing the budget and beginning to pay down the national debt, they would be looking at ensuring the wealthy are paying their fair share in taxes. Current law, with lots of loopholes for the wealthy, often has the very rich paying a lower percentage of their income in taxes than their average employee does. Yet, one of the first pieces of legislation the Republicans in the House passed was to rescind that increased funding to the IRS to upgrade their systems and audit more high-income earners. This bill would result in lower tax revenue as tax cheats would have a lower chance of being discovered and forced to pay what they owe. Fortunately, the Senate will not take up this House bill so it has no chance of becoming law.

I have already written to my member of Congress, Republican Marc Molinaro (NY-19), to ask him to join with Democrats and the reasonable Republicans in the House to pass a clean debt ceiling increase or suspension. If Speaker McCarthy won’t put the bill on the floor, they may need to file a discharge petition to get the bill put up for a vote.

Unfortunately, that process takes several weeks, so they had better start now. Secretary Yellen will enlist whatever shuffling of resources are allowed while they do it, but the clock is ticking and folks – and the financial markets – will be worried.

Of course, it would be faster and easier if McCarthy put the good of the country first and introduced a clean bill today. It would also show that the House Republicans want to cooperate in the governance of the country to “promote the general welfare,” as the Preamble to the Constitution states.

Given that they have thus far not shown this inclination, I won’t hold my breath.
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One-Liner Wednesday: Speaker-less

Yesterday, for the first time in a hundred years, the United States House of Representatives failed to choose a Speaker on the first day of the new Congress, when Kevin McCarthy failed to get a majority of votes on three attempts, despite the fact that his Republican party holds a slim majority.

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election reflection

When I finally made myself post about the upcoming midterm elections in the US, I knew I’d have to do a wrap-up post, so here goes…

The election outcomes were more positive than I had feared but not as good as I had wished. Some of the ultra-MAGA candidates lost and accepted defeat but a few that lost are refusing to concede. Some who won their races are trying to leverage their position to move legislatures to the extreme right. This is particularly worrisome in the House of Representatives, where some individual Congress members are threatening to withhold their votes to make Republican Kevin McCarthy speaker of the House unless he agrees to undertake certain investigations that come out of right-wing conspiracy theories.

Technically, the election season is not quite over yet. While the Democrats picked up a Senate seat which gives them the majority of 50-49, the race in Georgia is going to be decided in a run-off in a few days. If current Senator Raphael Warnock is re-elected, the Democrats will hold a clear majority of 51-49, which will also give them a majority of committee seats and make confirming President Biden’s nominees quicker and easier in the new session. Theoretically, this would also help make legislation easier to pass but it’s unlikely that the Republican House will pass many bills that the Senate cares to take up. Given that the Republicans don’t really have a platform, it seems they are more inclined to undertake endless investigations than to actually try to make laws and pass budgets.

The impending change in the balance of power in the Congress has led to a push to enact as much legislation as possible before the end of the year. One thing that should happen is raising the debt ceiling; in my ideal world, it would be abolished but I doubt that is in the cards. There needs to be a budget resolution passed. I’d love action on voting rights, codifying reproductive health access, gun safety, care for children and the vulnerable, and anti-poverty programs like permanent expansion of the child tax credit. One major piece of legislation that has passed is marriage equality, which was in place in only some states before the 2015 Obergefell decision from the Supreme Court made it legal nationally. Given the current Court’s eagerness to overturn precedent, an explicit law from Congress will be helpful in ensuring the continuing right to marriage the partner of one’s choice.

I believe that the Republicans were only able to regain the House majority because of the Supreme Court’s gutting of the Voting Rights Act, along with their allowing redistricting maps that were found to be unconstitutional by state courts to stand for this election in Alabama, Georgia, Louisiana, and Ohio. There was also extensive gerrymandering in Florida and Texas that favored Republicans.

Contrast this with my home state New York. In an attempt to make redistricting fairer, map making was taken out of the state legislature and assigned to a bipartisan commission with an equal number of Democrats and Republicans. Unfortunately, the commission could not agree on a new map and sent two versions to the legislature, which drew its own map and adopted it. The Republicans sued, a court threw out that map, and a new one was drawn by an academic. This delayed our primaries and caused major changes in which some incumbents ran against each other in primaries and others had districts that had a majority of voters that were new to them.

It also led to some representatives shopping for a new district that would elect them, even though they don’t live there. Take my current representative Republican Claudia Tenney as an example. She lives in the present 22nd district, which nonsensically lumps part of the Southern Tier where I live with the Utica area where she lives. When it looked like one of the commission or legislative maps was going to be adopted, she had filed to run in the Southern Tier district to my west which was an open seat because the Republican incumbent had resigned. When the court map was adopted, she changed to run in the new 24th district which had been most of the district of the retiring Republican John Katko. I don’t know whether or not she plans to move. I now live in the 19th district and our incoming (Republican) representative, Marc Molinaro, also lives outside our district. I haven’t heard anything from him that he plans to move here, either.

I’ve heard a lot of complaints from national pundits that the Democrats lost the House majority because “the New York legislature is bad at gerrymandering” but they are off the mark. The fact is that the prior maps were drawn when the Republicans had the majority in the State Senate while the Democrats controlled the Assembly. The maps made the House districts upstate, which tends to have more Republicans, lower in population than the downstate districts, which tend to be more heavily Democratic. All the versions of the new maps made the population distribution for each district more even, which is good. Unfortunately, the court’s map that went into effect didn’t give much weight to the prior lines, so lots of voters and candidates were thrown into new districts at a very late date.

For me, that meant going from a central NY district that didn’t really make a lot of sense into a district that stretches from here, through the Catskills and Hudson Valley over to the Connecticut border. It would make much more sense for Binghamton to be included in a Southern Tier district. The Southern Tier is our economic development zone and our regional identity. If we needed to be connected to another region to make the population required, it would make the most sense to include some of the Finger Lakes region. We have much less in common with the Catskills/Hudson Valley.

There are big changes in Democratic Party leadership in the House. The most noted is that Nancy Pelosi, who has been either Speaker or party leader for twenty years is stepping down from leadership. This didn’t surprise me as she had promised to step down from leadership to make room for the next generation. Additionally, she is in her eighties and is recovering from the trauma of the politically motivated attack on her husband and their home before the last election.

Nancy Pelosi has been the most effective House speaker in my lifetime, shepherding through major legislation, such as the Affordable Care Act and the Inflation Reduction Act, with very small Democratic majorities and next to no help from Republicans. She is very astute in figuring out what is possible and bringing along the members to pass it. While she grew up around politics, I think a lot of her success comes from her personal values, shaped by Catholic social justice doctrine and the Constitutional call to “promote the general welfare,” and with her experience raising five children.

Unfortunately, she has been attacked by Republicans in personal and vile terms, which has led to political violence. Besides the recent attack at her home, there are several chilling videos of January sixth insurrectionists threatening her life. That she continues to serve her district and the country is a testament to her strength and convictions as a person and a public servant. I’m grateful that she is remaining in Congress as a mentor in the coming terms, as well as, of course, a powerful voice on policy questions.

When Pelosi stepped down from leadership, her fellow octogenarians Steny Hoyer and James Clyburn also took themselves out of the running for the next two highest-ranking leadership posts. The new top leadership team is Rep. Hakeem Jeffries as Minority Leader, Rep. Katherine Clark as Democratic whip, and Rep. Pete Aguilar as Democratic Caucus chair. They are all in their forties or fifties. Jeffries is the first Black to become leader of a major US political party. Clark is only the second woman, after Pelosi, to be in a top leadership post in Congress. Aguilar is the highest-ranking Latino in Congress.

What is happening with the Republicans is still unclear. While Kevin McCarthy was elected Republican leader, it remains to be seen if he has enough votes to be elected Speaker. It’s also unclear if he or anyone can hold the party together with a slim majority as Speaker Pelosi has been able to do with the Democrats. My fear is that the House Republicans will refuse to craft bipartisan legislation with the Democrats but not be able to hold their own party together to pass bills either. We could wind up with gridlock that leaves even vital legislation in limbo. We’ve seen this before under some past Republican Speakers.

I have a feeling that I will spend the next term writing to Rep. Molinaro, who claims to be a proponent of bipartisanship, asking him to stand up for reasonable legislation that passes the Senate to make it to the House floor for a vote, where it can pass with Democratic and a minority of Republican votes.

Will that happen? I don’t know, but I’ll try to at least start out with that hope.

My nomination for House Speaker

So, the US Republican party is in disarray.

The current House Speaker John Boehner’s resignation goes into effect on October 30. House majority leader Kevin McCarthy has just withdrawn his name from consideration as the next Speaker, as a sizable chunk of the party would not support him.

The problem is that there doesn’t seem to be anyone that the whole Republican caucus agrees on for the post, which is incredibly important to get legislation passed into law and is also third in line for the succession of the presidency after the vice president.

My solution is that Nancy Pelosi, former Speaker and current House minority leader, should be the next Speaker, supported by the Democrats and those Republicans who actually want to govern rather than be obstructionist.

There is vital legislation for the debt ceiling and for the budget that must be passed to avert severe negative economic consequences. If the Republicans can’t get their act together to govern effectively, they don’t deserve the speakership.