Congressional showdowns over the debt limit are nothing new, but this time around there’s a unique wrinkle. The House approved a bill on Tuesday night with what was essentially a party-line vote that paves the way for Congress to avoid a possible default on the national debt in the coming weeks. Here’s the tricky part: “The measure would create a special pathway—to be used only once, before mid-January—for the Senate to raise the debt limit by a specific amount with a simple majority vote, allowing Democrats to steer clear of a filibuster or other procedural hurdles so that Republicans would have no means to block it,” The New York Times reports.
The upshot, assuming this deal holds up long enough to avert the December 15 deadline for raising the debt limit, is that there won’t be another showdown like this before the midterm elections next November.
Both parties stand to gain something from that. Democrats, who hold the majority in both chambers of Congress, are freed from having to deal with the debt limit again before the midterms. But the terms McConnell has agreed to, Politico reports, “would require Democrats to raise the debt ceiling to a specific number rather than suspend it for a length of time, such as through the election.” That means you can expect to hear a lot of attack ads next year talking about how Democrats voted to raise the debt ceiling by $1.5 trillion or $2 trillion or whatever the final total ends up being.
“So I believe we’ve reached here a solution to the debt ceiling issue that’s consistent with Republican views of raising the debt ceiling for this amount at this particular time and allows the Democrats to proudly own it, which they’re happy to do,” McConnell said at a press conference on Tuesday, according to the Wall Street Journal. You can almost hear him winking as you read those last few lines.
What does it mean for the federal government’s fiscal situation? Nothing good.
Raising the debt limit is often compared to making payments on a credit card. But that metaphor is only half right. Yes, the real problem is the spending—spending that both parties have approved, of course. Once you’ve agreed to borrow money to pay for something, you have to pay those bills.
But raising the debt limit is more like applying for more credit cards to cover the existing credit card bills you’ve already rung up. To drop the metaphor: It means authorizing the Treasury to keep borrowing to pay for spending that Congress already approved even though it did not provide a means for how to pay for it.
In the real world, credit card companies would eventually stop letting you have new credit to cover the cost of old credit. So far, America has been able to take advantage of a nearly unlimited supply of credit. If that ever changes, it’ll be a huge problem.
Relatedly, it now looks like President Joe Biden’s big domestic spending proposal—the Build Back Better (BBB) plan—won’t be seriously considered by the Senate until next year. It’s yet another big spending bill that will rely heavily on future borrowing.
Early read from Senate Ds walking out of lunch is that Jan. 15 is starting to become the new deadline to pass BBB
More are talking about the need to avoid a sudden lapse of payments from the child tax credit
— Joseph Zeballos-Roig (@josephzeballos) December 7, 2021
FREE MINDS
Rep. Peter Meijer (R–Mich.) was one of 10 Republicans to vote in favor of impeaching President Donald Trump after the January 6 riot, just three days after he was sworn into Congress as Justin Amash’s replacement. Tim Alberta, whose work is always must-read material, profiles one of the most interesting members of Congress for Politico:
Meijer says he’s “pretty much” resigned to Trump winning his party’s nomination in 2024, and worries that the odds of Trump returning to the White House are growing stronger as Biden’s presidency loses steam. Meijer knows the strain Trump’s candidacy might place on a system that nearly buckled during the last election cycle. What’s worse: Meijer sees Trump inspiring copycats, some of them far smarter and more sophisticated, enemies of the American ideal who might succeed where Trump failed.
“The real threat isn’t Donald Trump; it’s somebody who watched Donald Trump and can do this a lot better than he did,” Meijer says.
The powerlessness in his voice when he says this is unnerving. In the space of a year, he transformed from a political romantic to an emboldened survivor to a daunted skeptic. He tried to force a reckoning on his party; now the reckoning is coming for Republicans like him.
FREE MARKETS
Fashion tycoon Yusaku Maezawa is the world’s latest space tourist. He blasted off from Kazakhstan on Wednesday morning and plans to spend 12 days living in the International Space Station (ISS).
LOOK: Billionaire Yusaku Maezawa blasts off from Kazakhstan for a 12-day trip as Japan’s first space tourist.
Joining him are his assistant, and cosmonaut Alexander Misurkin. Maezawa plans to wire cash to Twitter followers while in orbit https://t.co/PQCc4O71e8 #前澤宇宙旅行 pic.twitter.com/gsVULKiExb
— Bloomberg Quicktake (@Quicktake) December 8, 2021
Going with Maezawa is producer Yozo Hirano, who plans to film the trip. ABC News reports that Maezawa has “compiled a list of 100 things to do in space after asking the public for ideas.” He is the first space tourist to visit the ISS since 2009.
Dreams come true.
— Yusaku Maezawa (MZ) (@yousuckMZ) December 8, 2021
QUICK HITS
• Thank you to everyone who contributed to Reason‘s annual webathon! This year’s fundraiser was the largest in our history, with more than $630,000 donated by a record number of individual supporters. We are endlessly grateful.
Aiight, so as the gong prepares to mark the end of @Reason‘s Webathon, we *just* beat last year’s all-time record, with $520,878 in total donations. But! There’s still another $13,000 to go that will be doubled by a donor prepared to match. WE CAN DO THIS!https://t.co/T7CL3QF9bX
— Matt Welch (@MattWelch) December 8, 2021
• Despite the war in Afghanistan coming to an end, the Pentagon will get another budget increase: from $740 billion to $768 billion.
• Sen. Joe Manchin’s (D–W.Va.) opposition to the Build Back Better proposal seems to be hardening:
>@Sen_JoeManchin, speaking at @WSJ CEO Council Summit, says “the unknown” of inflation “is much greater than the need” to do Build Back Better right now.
Says reconciliation “should never have been used for major policy change.”
— Julie Tsirkin (@JulieNBCNews) December 7, 2021
• Congress dropped a proposal to require women to register for the draft from this year’s National Defense Authorization Act.
• A third dose of the Pfizer vaccine seems to be effective against the new omicron variant, the company says.
• Don’t like COVID policies where you live? Move somewhere else, says economist Bryan Caplan. (This is true for non-COVID policies too.)
• You might want to stock up now on your favorite holiday drinks.
• A student at Virginia Tech has been suspended for booing a referee and the school’s assistant athletic director at a soccer game.
The post McConnell Won’t Block Debt Ceiling Increase, Says He Wants Democrats To ‘Proudly Own It’ appeared first on Reason.com.
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