Can someone explain to be why, given a one-time opportunity to raise the debt ceiling by simple majority vote in the Senate, the Democrats raised it by a mere 2.5 trillion? That kicks the can down past the 2022 election but almost guarantees a showdown, assuming Republicans win at least one house in that election, as they almost certainly will. Why not raise it by 10 trillion or 20 trillion, or 100 trillion for that matter. At a bare minimum, raise it enough to kick the can past the 2024 election.
New reports (cannot find the story any more) suggest a showdown in 2023 similar to the ones we have had in the past, with Republican holding the debt ceiling hostage to massive spending cuts. Well, that would be bad, but if it is the worst that happens it is something we can live with. Many times in the Clinton and Obama Administrations we have come close to a breach and always backed away at the last minute. Showdowns in the Obama Administration took place under conditions of depressed economy, in which deep spending cuts were a serious blow. Currently, the economy is growing so fast it is straining our capacity and causing inflation. Certainly we can withstand deep spending cuts under current economic conditions. Besides, Republicans have always found that fulminating against government spending in the abstract is one thing. Identifying specific cuts is quite another.
But here is my fear. My fear is that this time when Republicans won't swerve in this game of chicken. I see two possible scenarios here.
Scenario one: Republicans refuse to raise the debt ceiling. A breach occurs. No one knows what happens next. At a minimum, government loses much of its ability to pay its bills. When Obama was President, he announced that the treasury would pay bills on a first-come-first-serve basis and had no capacity to set priorities. If that happens, more and more claimants will start getting their checks late -- and later, and later and later and later. That's the best case scenario. If the treasury has no way to give priority to holders of government debt, they, too, will start getting paid late. At a minimum, this will cause investors to demand higher interest on US debt and raise interest rates down the line. Or maybe investors will start dumping US debt and a massive financial crisis will ensue. No one knows.
It seems a safe bet that allowing the debt ceiling to be breached will become unpopular once it becomes apparent that there is some inconvenience involved. But that is precisely the point. Republicans will refuse to raise the debt ceiling until worse and worse consequences result, treating the worst consequences as a feature, not a bug, because they can blame them on Biden.
Of course, Biden will blame Republicans right back, and Presidents tend to prevail in showdowns of this kind. If Republicans allow a debt ceiling breach solely to hurt the country and blame it on Biden, they will probably eventually end up backing down and spend the rest of his term obstructing any attempt to deal with the consequences. But the consequences could be dire.
Scenario two: Well, there is talk of naming Trump as Speaker of the House. Many have asked whether he would want the job which does, after all, call for quite a bit of work. The Speaker presides over the House sessions, assigns members of the majority party to committees, assigns bills to committees, decides what bills to bring to the floor, and serves as head of the majority party caucus and enforces party discipline. Trump would do fine in that last role, no doubt, tweeting out the party position and threatening a primary challenge to anyone who disagreed. But the rest of the job calls for a lot of work that does not seem like the sort of thing Trump would care for.
But that is not the real point. If named Speaker, Trump would no doubt allow his second-in-command to handle most of the actual day-to-day work. What would be really important would be that the would be third in line of succession. So what are the chances that would be important? Well, presumably our security is good enough that is most unlikely that the President and Vice President would both be assassinated. Impeachment is also out of the question. The Senate is currently split equally between the parties. In 2022, 14 Democrats and 20 Republicans are up for reelection. That means that even in the unlikely event of the Republicans winning every single Senate seat, they would still not have enough votes to convict.
But there is a third way for the presidency to fall empty -- by resignation. So suppose Republicans win control of the House and name Trump as Speaker. And then suppose they refuse to raise the debt ceiling. Disasters of all kinds occur and then the Republicans name their condition to raise the debt ceiling -- the President and Vice President must both resign and restore Donald Trump to office.
Call it far-fetched if you want. But wouldn't it be better just to raise the debt ceiling high enough to make it impossible?
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