As I write on Saturday, May 20, there is no assurance that the debt ceiling will be raised. To the contrary, the negotiations ceased when the Republicans left the room on Friday evening in a huff hinting that there was no hope for a compromise. The required “compromise,” as they call it, would mean Democrats holding federal spending steady for discretionary items with no increases from the FY 22 budget– for eight years! It also would mean huge cuts in federal subsidies for health care and the social safety net along with gutting environmental initiatives and firing IRS staff. Cuts would average 18 percent on year one for all items not related to defense or national security. The federal bureaucracy would be gutted, support for veterans cut drastically, climate change initiatives blocked. Medicare and Social Security would also be on the chopping block. When the Democrats give into these “reasonable” demands, then and only then will the Republicans agree to allow the proposed programs in the 2024 budget to move forward by raising the debt limit.
These demands, of course, are outrageous and unacceptable to Democrats and to the Administration. The Republicans, however, believe they are coming from a position of strength. They believe they have the poison pill—the law that prevents any spending above the congressionally authorized debt ceiling, which is expected to happen on or around June 1. The average American expects both sides to make concessions and for a compromise to be reached.
The crazies have taken over the Republican Party. I am not hopeful.
I say, Hold your course, Democrats. What is happening now is the equivalent to hostage taking. And make no mistake. This has nothing to do with balanced budgets. No Republican gave so much as a twit when Trump’s laws cut revenues and provided giveaways to the rich through tax cuts. The tax cuts pushed deficits to record highs. This is about an unconditional surrender by Democrats to give Republicans the chance to destroy virtually all that they and President Biden have been able to accomplish in the first two years of the Biden Administration and much more. Plus if they are successful in getting their way now, they will surely pull this trick again. And again. Mr. President, you can’t let this happen. Dems, you can’t let this happen.
So what to do? So, yes, make compromises, small ones, but do not cave on what is important. If reasonable compromises can’t be reached, accept that the non essential part of the federal government will be shut down, but do not default on Treasury Bills. We have been through government shut downs before. They are painful, unfair, and totally unnecessary, but usually are worked out eventually. Not honoring our financial obligations is a bird of a different feather. Economists and historians tell us the results would be catastrophic. Mr. President, continue to pay interest and return principal. The Fourteenth Amendment has a provision that states the following:
“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.”
Argue the law about the debt ceiling is unconstitutional and honor the debt. This would, of course, end up in the Supreme Court. Would the current justices put a stop to this action by Republicans to set off a catastrophic event? I know, long shot. That is why we all should be concerned.
A “discharge petition” (which I confess I do not understand) has also been recommended, which would get around the debt ceiling deadline but would need at least five Republicans to sign on, also unlikely.
The situation is in effect a duel at close range where both sides shoot each other dead. It is the financial equivalent of a nuclear war. Yes, the budget deficits need to be addressed by cost cutting combined with raising more revenues. This needs to be a priority going forward but not now, not under the threat of killing all the hostages. Only eleven days are left before the triggering event. For now, however, the Dems must not cave. Should the Republicans win on this one, Doomsday comes to mind.