Nightmare Before Christmas: Unresolved Senate Debt Limit Position Risks Financial Crash
The myopic partisanship that is the predominant pursuit of Congress these days reached an apparent stalemate last week over a critical vote to raise the federal debt limit before our elected elites do what they want. they do the best: throw the box on the road.
Senatorial Minority Leader Mitch McConnell, R-Ky., Offered Democrats, who hold the thinnest possible majority in the 100-seat Senate, an “exit ramp” before the Oct. 18 deadline for the Congress increases the government’s $ 28.5 trillion line. credit. Democrats rushed to the offer with the desperation of someone groping for a flotation device.
Without such a delay, the nation was on track to default on its debts for the first time in a week from today. This would have left the government unable to finance its operations or pay its bills, potentially plunging the planet into financial disaster.
“We dodged a bullet,” observed a friend after McConnell and Senate Majority Leader Chuck Schumer, D-NY., Accepted a tentative vote that delays the final tally to Dec. 3.
He is right. We dodged a bullet. We could also say that we have obtained a stay of execution for 53 days. It also raised the stakes even higher, as the new deadline to raise the debt limit coincides with the deadline to pass a resolution to fund the government, a task Congress postponed two weeks ago.
Unless the Machiavellian partisan maneuvers and intra-party feuds of the 117th Congress miraculously resolve by then, our Halloween financial apocalypse will become our nightmare before Christmas. And that of Schumer free sweep without grace at McConnell and the GOP after the Senate passed the extension on Friday does not inspire any better hope.
If the worst were to happen you could see your investments and retirement savings gutted, interest rates and already troublesome inflation will skyrocket to levels not seen in decades, layoffs and insolvencies will punish big and small, existing shortages of many grocery and consumer goods due to disruptions in the global supply chain will worsen and Medicare benefits will be suspended or eliminated, leaving tens of millions of seniors without coverage health care. It translates into everyday life in heartbreaking ways.
That cute three bedroom, 2 ½ bath Cape Cod in a good school district that was supposed to be your starting home, that you have been saving and saving for over a decade to raise a down payment? It does not happen.
Investments that have been deducted from every paycheck that have grown enough over the past 18 years to allow the two kids to spend four years at State U? Sorry. And don’t look for help from college loans or government-backed scholarships.
The new used car for you that you wanted to replace the 20 year old minivan that is now costing you more per month in repairs than car loan payments? Maybe a bike will do.
A procedure your cardiologist says you must have to open a heart artery that tests show is 80% blocked? Medicare is out of money and you’re out of luck. Get your will in order.
Instead of celebrating 25 years of meeting or exceeding expectations, long hours in the office, and multiple promotions, your boss and HR rep are reluctant to inform you that your job is the victim of emergency cost cuts. You have a cardboard box and 10 minutes to collect your belongings before security escorts you out of the building.
Salaries and benefits cease instantly for soldiers, sailors, Marines and Air Force personnel, as well as care for veterans who have already answered their country’s call.
In Virginia, you would join tens of thousands of new jobless claimants, left to painful incompetence of the Virginia Employment Commission. Only this time, the federal government cannot fund increased unemployment assistance like they did during the pandemic.
Many on the margins, living paycheck to paycheck, could face homelessness without the prospect of rent relief from a broke Uncle Sam.
The pantries are empty, unable to meet demand. Long queues at soup kitchens funded by charities and places of worship until their endowments also evaporate. The summer gardens that adorned the supper tables remain sterile during the shorter days and the nocturnal frosts of a freezing winter.
Not that all of this seems to have taken a heavy toll on those who write our laws, control the nation’s purse strings, and could fix the problem quickly. Rather, they are evaluating the predicament for a tactical political advantage.
None of this should come as a surprise to anyone who has paid more than incidental attention to public affairs over the past six months. And there is a lot of blame to be distributed.
We can blame our national dependence on credit without considering the growing balance owed and the inevitability of it becoming unsustainable sooner or later.
We can blame the Democrats, who hold all the elective levers of power in Washington – albeit by paper-thin margins – for their crippling schism between progressives and moderates over billions in new spending demanded by the Liberals.
We can blame McConnell and his GOP conference, still furious after losing the White House and control of the Senate last fall. After taking the blood oath to foil all of President Joe Biden’s goals for four years, McConnell is ready to let the process fail, salute the carnage that followed, and then rejoice at the helplessness of his rivals before the mi – mandates of 2022.
Historically, increasing the government’s cap on the amount of money it can borrow to pay its bills has been a bipartisan endeavor – a trivial but essential part of congressional management – since 1939, when legislation established a blanket limit. of the federal debt, then only $ 45 billion. Never in these 82 years has the government defaulted on its debt obligations and unleashed a chain financial crash.
Three times during the tenure of Republican President Donald Trump, the debt ceiling has been raised without partisan roadblocks.
This time it’s different. Last November, Democrats won enough seats to forge a 50-50 tie in the 100-seat Senate, with Democratic Vice President Kamala Harris holding the deciding vote.
There was a time when a functioning Senate systematically allowed a debt ceiling vote to take place without being hampered by the threat of partisan obstruction.
McConnell had said since July that no such accommodation would be offered this fall by Republicans in the Senate. He relented last week, allowing GOP senators to contribute 11 votes to waive an obstruction and bring the interim measure to raise the debt ceiling by 480 billion dollars to an immediate vote which passed 50-48. But Republicans warn Democrats alone are raising the debt ceiling in December.
Democrats, with their internal divisions, allow McConnell and the GOP to create an impasse by exploiting Democratic divisions that sometimes prevent the party from mustering a simple majority in the Senate.
Progressive Democrats in Congress want to adopt a clean and social energy package worth up to $ 3.5 trillion over 10 years as a prerequisite to allow passage of a $ 1.8 trillion set of needs basic infrastructure such as roads, railways, waterways, power grids and broadband internet.
In Senate, two so-called moderate Democrats, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, say $ 3.5 trillion price tag is no start, leaving Biden and Democrats in Congress negotiate a smaller sum than the moderates will accept in return. for providing the minimum number of votes necessary for the Senate.
Republicans have encouraged the misconception that increasing the debt ceiling is necessary to cover two multi-trillion-dollar Democratic spending bills. This debt ceiling vote only applies to spending and credits already signed into law, including nearly $ 8 trillion in debt authorized during the Trump years. It would not apply to the current bill, even if it is passed in one way or another.
Last week’s postponement at least gives the Capitol Hill elites time to breathe, return home during recess and reconnect with real people, and hopefully realize just how selfish their chicken game is. could cause them.
This commentary was originally posted by Virginia Mercury, an affiliate of the nonprofit States Newsroom, which includes the Florida Phoenix.