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debt limit
Watchdog Slams Biden DOJ's Push to Preserve Debt Ceiling as Another Crisis Looms
"Why is the Biden administration trying to rob itself of a clear opportunity to protect American workers and the economy from being roiled by MAGA saboteurs?" asked the head of the Revolving Door Project.
Aug 10, 2023
A government watchdog on Thursday called out the Biden administration for attempting to kill a lawsuit filed in May by a union representing about 75,000 workers across U.S. agencies that challenges the federal debt ceiling law.
"Why is the Biden administration trying to rob itself of a clear opportunity to protect American workers and the economy from being roiled by MAGA saboteurs?" asked Jeff Hauser, executive director of the Revolving Door Project.
A federal judge canceled plans to hear arguments for the National Association of Government Employees (NAGE) case when President Joe Biden and congressional Republicans who were holding the economy hostage announced a negotiated deal to suspend the nation's borrowing limit until 2025—signed into law in early June as the Fiscal Responsibility Act (FRA).
Biden then ordered his aides to create a working group intended to prevent similar crises in the future. As the White House said last month, "Now that the latest debt ceiling crisis is behind us, it is necessary to explore all legal and policy options to prevent Congress from ever again holding hostage the full faith and credit of the United States."
Now, as Government Executivereported earlier this week, even though "federal employees are still facing the prospect of delayed paychecks when the debt ceiling is reinstated in 2025," the U.S. Department of Justice "asked Judge Richard Stearns of the U.S. District Court for the District of Massachusetts to dismiss the case, suggesting the FRA has made the case moot and NAGE members lack standing because their claims are 'wholly speculative.'"
"After calling for just such a case to be brought, the Biden administration now fights it, demonstrating a truly remarkable willingness to shoot itself in the foot."
Hauser said that "the Justice Department's notion that the federal employees' claims of injury are 'wholly speculative, as they depend on a future chain of events that may never occur,' is absurd: The crisis is scheduled to recur precisely on January 1, 2025, as it has recurred repeatedly this century."
"In the meantime, uncertainty continues to trouble hundreds of thousands of federal workers, who have no guarantee of how their jobs, salaries, and pensions will be affected," he noted. "Indeed, the stance that [Attorney General] Merrick Garland's Justice Department is advancing creates an unfortunately sound case against workers considering taking a job in what has become an unstable federal government."
During the drawn-out fight earlier this year, as Republicans in Congress signaled their willingness to force the first-ever U.S. default despite warnings of a resulting economic catastrophe, Biden even suggested that while he wasn't planning to invoke the 14th Amendment—which states that the validity of the nation's public debt "shall not be questioned"—to end the current crisis, he would be open to challenging the debt ceiling law in the future.
"Rather than use the existing case as a means to that end, however, the administration is seeking to have it dismissed. The Justice Department declined to weigh in further on the merits of the case, reducing its argument only to the union's lack of standing," Government Executive explained, noting that a hearing on the motion to dismiss the case is set for August 29.
Hauser said that "after calling for just such a case to be brought, the Biden administration now fights it, demonstrating a truly remarkable willingness to shoot itself in the foot."
"The administration has every authority to take a different tack in this lawsuit and make space for the constitutionality of the debt limit to be worked out in the famously slow-moving U.S. legal system before the clock runs out on preventing the next crisis," he stressed.
The NAGE complaint names as defendants Biden and Treasury Secretary Janet Yellen in their official capacities.
Biden is seeking reelection next year and is expected to face the Republican nominee; former President Donald Trump is currently leading a crowded field of GOP candidates in spite of his legal issues, including the recent indictment related to his efforts to overturn his 2020 loss, which led to the January 6, 2021 attack on the U.S. Capitol.
Even if Biden wins in 2024 and Democrats keep control of the Senate and regain a majority in the House of Representatives, they may lack the votes needed to extend the suspension or raise the debt ceiling in early 2025. Democratic lawmakers notably declined to take action on the borrowing limit after the last midterm elections, despite warnings that Republicans would use their House takeover this year to hold the economy hostage to extract concessions.
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Dems Unveil Debt Ceiling Reform Act to Prevent Future GOP Hostage-Taking
"After a near-catastrophic default thanks to political games by our Republican colleagues, it's time to put the debt ceiling in the hands of the Treasury secretary," said Sen. Dick Durbin.
Jun 09, 2023
In the wake of President Joe Biden and Congress just barely averting an economically catastrophic U.S. default, a pair of Democratic leaders on Friday introduced a bill intended to stop Republican lawmakers from holding the economy hostage again.
Contending that the recent crisis proves the current process "is broken and unsustainable," House Budget Committee Ranking Member Brendan Boyle (D-Pa.) and Senate Majority Whip Dick Durbin (D-Ill.) introduced the Debt Ceiling Reform Act.
Boyle and Durbin's move comes after Biden on Saturday signed the so-called Fiscal Responsibility Act—the debt ceiling compromise he negotiated with House Speaker Kevin McCarthy (R-Calif.)—just two days before the default deadline. The deal suspends the borrowing limit until 2025, after the next election cycle, but includes devstating concessions to the GOP.
"A definition of insanity is doing the same thing over and over while expecting a different result. If we do not significantly change the debt ceiling process, Republicans will keep taking our economy hostage and provoking default," Boyle warned. "The Debt Ceiling Reform Act will end Republicans' perennial weaponization of the debt ceiling once and for all by making it harder for extremists to take the debt ceiling hostage."
\u201cWe just saw MAGA Republicans use the debt ceiling to hold our nation hostage \u2014 threatening to crash the economy unless they got their extreme demands.\n\nToday, I'm introducing legislation to make sure it never happens again.\u201d— Rep. Brendan Boyle (@Rep. Brendan Boyle) 1686316686
"This legislation is a sensible response to Republicans' repeated hostage-taking, manufactured default crises, and toxic brinkmanship," he said. "I am proud to join Sen. Durbin in introducing this much-needed legislation to permanently take default off the table and provide the economic stability the American people deserve from their government."
Although the proposal would not fully abolish the arbitrary and arguably unconstitutional debt limit—as some economists, legislators, scholars, and others have called for in response to recent GOP conduct—Boyle and Durbin's legislation would authorize the U.S. Treasury Department to continue paying the nation's bills unless, within 30 days, both chambers pass a veto-proof resolution of disapproval.
The sponsors highlighted that it is similar to what Senate Minority Leader Mitch McConnell (R-Ky.) proposed in 2011, when the Obama administration—for which Biden was vice president—was working with a divided Congress to prevent a historic default.
According to The Wall Street Journal, which exclusively reported on the bill's introduction:
Boyle concedes that the bill's prospects in the Republican-led House are dim, but he said he is hopeful that some GOP lawmakers might be convinced that debt ceiling fights are more trouble than they are worth, particularly after a rebellion from some conservative lawmakers over the latest debt ceiling deal paralyzed the House this week.
"I am hoping that there will be Republican members who are interested in this specific reform," he said.
A similar bill introduced by Boyle and Durbin last Congress had 22 House co-sponsors, all of them Democrats. The new bill has at least 48 House co-sponsors, including former Speaker Nancy Pelosi (D-Calif.). Durbin is the sole Senate sponsor.
"After a near-catastrophic default thanks to political games by our Republican colleagues, it's time to put the debt ceiling in the hands of the Treasury secretary," Durbin declared Friday. "For the sake of the American people and for the good of our economy, we need legislation to reform the way we address the debt ceiling."
"The Debt Ceiling Reform Act is responsible, commonsense legislation that will give the Treasury the authority to raise the debt ceiling," he continued. "If Republicans are truly concerned about the economic well-being of America, they will work with us on this sensible solution."
\u201cThe debt ceiling is an entirely made-up issue that serves no purpose besides giving Republicans the chance to hold our economy hostage every few years.\n\nIt's about time Dems started seriously working towards eliminating it for good.\nhttps://t.co/WRnJSS5gwR\u201d— Patriotic Millionaires (@Patriotic Millionaires) 1686322492
Meanwhile, calls for Democratic leadership to work toward abolishing the debt limit—whether through the courts or legislation—continue to mount, especially given concerns about a fight over the next hike.
"This round of negotiations was fought to a draw, but the White House backed itself into a corner before the next one even started. The White House may have won a reprieve from fiscal policy fights, but there's a fiscal policy hurricane brewing," Dylan Gyauch-Lewis, a researcher at the Revolving Door Project, wrote Friday for The American Prospect.
If Biden wins reelection next year but the GOP secures a majority in one or both chambers of Congress, Gyauch-Lewis warned, "Republicans will likely be able to again hold the entire global economy hostage. The ransom this time around may well be even more drastic. The GOP, emboldened by their victory, could try to win extensions of spending and tax cuts along with kneecapping the Democratic agenda."
"Arguably, Biden would still find himself embroiled in these negotiations even if Democrats flip the House and hold the Senate; it's entirely plausible that he could need to court moderate votes," he added. "Or Biden may not be able to get everything into a package that can make it through the Senate's reconciliation process, in which case he would need 60 votes, something Democrats almost certainly won't have on their own."
\u201cWe are going to have a fiscal Kilimanjaro in 2025, with the election outcome highly relevant for policy. Our friends at @revolvingdoorDC write that an assessment of last week's debt deal is incomplete without thinking about how it sets up the next one.\nhttps://t.co/Y6zK29ai1s\u201d— David Dayen (@David Dayen) 1686316728
In an OtherWords column this week, Karen Dolan, who directs the Criminalization of Race and Poverty Project at the Institute for Policy Studies, stressed that while this time around, "Biden was able to hold off the worst harm, this deal still causes significant harm to ordinary people and sets a terrible precedent for more hostage-taking."
"Congress should abolish the debt ceiling," she said. "If Congress won't act, the president should intervene with his considerable executive power and invoke Section 4 of the 14th Amendment, which says that the validity of the public debt of the United States 'shall not be questioned.' He could even mint enough money to ensure there would be no default and no harm to families."
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For Corporate Media, Caving to GOP Debt Limit Blackmail Was a Triumph of Bipartisanship
Treating the Republican gambit as anything other than economic hostage-taking gave it the legitimacy the party needed to stick with it without fear of massive political blowback.
Jun 05, 2023
When Congress passed the debt ceiling deal hammered out by President Joe Biden and House Majority Leader Kevin McCarthy, centrist media celebrated.
If we had anything like a responsible White House press corps, we never would have gotten to this point. Treating the Republican gambit—demanding deeply unpopular policy measures in exchange for allowing the government to pay off debts Congress had already authorized—as anything other than economic hostage-taking gave it the legitimacy the party needed to stick with it without fear of massive political blowback (CounterSpin, 5/5/23).
Instead, the press corps we have gave three cheers for bipartisanship.
‘Complaints on either side’
NPR‘s Domenico Montanaro (6/1/23) hailed the compromise in a piece headlined, “Don’t Believe the Hype: Low-Key Lawmakers Helped Avert a Debt Ceiling Crisis.” A paean to “pragmatists,” the article argued that
it will be those who eschewed the wings of their parties—which have some of the most vocal, attention-getting members—who averted a potentially calamitous, first-ever US debt default.
Call them perhaps the Silent Middle Majority.
Montanaro offered a both-sides framing of the deal:
There were plenty of well-founded complaints on either side—on the left, worries about increased work requirements that could hurt people in poverty, nervousness about the environmental impact of sped-up energy permits; on the right, continued head-shaking about what they see as out-of-control spending and debt, now topping $30 trillion.
But in the end, two-thirds of House Republicans and more than three-quarters of Democrats voted for the bill for a total tally of 314–117.
It’s an analysis that simply assumes the validity of the premise that some sort of deal needed to be worked out to begin with: If a hostage-taker complains that their demands have only partially been met, how well-founded is that complaint?
And on top of the false premise, Montanaro has to stretch to make both sides’ “complaints” seem at all comparable, matching the left’s “worries” and “nervousness”—about harming people and the environment—to the right’s “what they see as” problems. But there’s solid research behind the “worry” that work requirements exacerbate hardship (CBPP, 3/15/23), and speeding up energy permits is intended to increase fossil fuel production (American Prospect, 6/2/23), which is precisely what must be halted to stave off the worst of climate change outcomes.
And however much right-wing politicians shake their heads about the debt, it’s journalists’ duty to point out the disingenuousness of a party that runs up debt via tax cuts, and then pretends to favor fiscal responsibility when it comes time to pay the bills (FAIR.org, 1/25/21).
‘Far-right and hard-left…in revolt’
The New York Times also luxuriated in the outpouring of bipartisanship, with chief White House correspondent Peter Baker (5/28/23) reporting that Republicans’ success in holding the economy hostage “bolsters President Biden’s argument that he is the one figure who can still do bipartisanship in a profoundly partisan era.” He added, though, that the deal “comes at the cost of rankling many in his own party who have little appetite for meeting Republicans in the middle.”
Another piece, by congressional reporter Catie Edmondson (5/31/23), presented the deal as “a broad bipartisan coalition” in support of “a critical vote to pull the nation back from the brink of economic catastrophe”:
With both far-right and hard-left lawmakers in revolt over the deal, it fell to a bipartisan coalition powered by Democrats to push the bill over the finish line, throwing their support behind the compromise in an effort to break the fiscal stalemate that had gripped Washington for weeks.
When the Times reports that the “far right” and “hard left” both oppose something, that’s a sure sign that the paper thinks it’s a good thing. Another front-page piece in the paper, by Jim Tankersley (5/29/23), went out of its way to argue that not only was it good that the White House made a deal, but that, all in all, it was a good deal:
Economists say the agreement is unlikely to inflict the sort of lasting damage to the recovery that was caused by the 2011 debt ceiling deal—and, paradoxically, the newfound spending restraint might even help it.
“The economy could actually use a mild dose of fiscal austerity right now,” Tankersley reported economists were saying; the cuts will throw people out of work, so the Federal Reserve won’t have to. In the 23rd of 25 paragraphs, after presenting the Republican argument that the deal “will help the economy by reducing the accumulation of debt,” the reporter acknowledged that the cuts “will affect nondefense discretionary programs, like Head Start preschool, and…new work requirements could choke off food and other assistance to vulnerable Americans.”
‘Centrists’ vs. ‘fringes’
The Washington Post (5/30/23) seemed practically giddy at the deal: “A Washington Surprise: Centrists Push Back Against Fringes in Debt Deal.”
In the piece, White House bureau chief Toluse Olorunnipa found a way to equate Republicans willing to blow up the economy if they weren’t given policy concessions—ones they didn’t think they could achieve through legislation—with Democrats who insisted that government debts simply had to be paid:
For weeks, conservative Republicans warned House Speaker Kevin McCarthy not to back down from sweeping spending cuts, saying anything else would be an unforgivable betrayal. Liberals implored President Biden to abandon the debt ceiling talks altogether, insisting the Constitution enabled him to simply ignore Republican demands.
But in the end, the two leaders opted for a middle-of-the-road settlement, aiming to coalesce center-right and center-left lawmakers around the idea that an imperfect deal was preferable to a historic default that could devastate the economy. It was the first significant test for the Biden/McCarthy era of divided government, and if a theme emerged, it was the unmistakable reassertion of the political center.
“Both sides were initially sounding very ardent about an inflexible position,” said presidential historian Douglas Brinkley. “Yet both sides ultimately blinked—and that is what American politics is all about.”
Winners and losers
In all of the coverage, one consistent theme was the compulsion to declare winners and losers. Some outlets picked one side or the other: “House Passes Debt Ceiling Bill in Big Win for McCarthy,” judged the Hill (5/31/23), and USA Today (6/2/23) similarly had “McCarthy Gets Win Passing Debt Deal.” “Apostle of Bipartisanship: Why US Debt Ceiling Deal Was a Victory for Joe Biden,” explained the British Guardian (6/1/23), while the Washington Post (6/1/23) had a more confusing “Biden Won on the Debt Ceiling. Why Doesn’t He Want It to Look That Way?”
Others declared both dealmakers victorious. Politico‘s popular Playbook newsletter (6/1/23) ran with “How McCarthy and Biden Both Won the Debt Deal.” The Washington Post (6/1/23) simply offered the two sides’ own declarations: “Sidestepping Crisis, Biden and McCarthy Claim Victory in Debt Deal.” Another USA Today piece (6/1/23) made the bold claim, “Debt Ceiling Plan Passes Senate. Who Wins? Everyone, and Here’s Why.”
In a different twist, CNN (5/30/23) offered its perspective on which companies were “winners” in the deal—leading off with Equitrans Midstream, the lead developer of the Mountain Valley Pipeline project that Sen. Joe Manchin forced into the agreement.
It also included lending company SoFi, which would profit from an end to the student loan repayment freeze included in the deal, and H&R Block and TurboTax, which are expected to benefit from the deal’s cuts to the IRS. This curtailment will likely stymie the agency’s plan to develop a free electronic tax filing system, which would have rendered those tax preparers’ offerings much less profitable.
CNN‘s “winners” begin to suggest who some of the “losers” are in this deal. It preserves tax cuts for the wealthy and funding for the Pentagon, while cutting the rest of discretionary funding, forcing more work requirements on recipients of public assistance, fast-tracking fossil fuel projects and weakening environmental protections—all great for corporations and wealthy political donors, and terrible for most people. But both major parties agreed to inflict this damage—and that in itself makes it good news for establishment media.
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