The US Congress routinely goes through an exercise that to me perfectly captures its lack of maturity. It is the periodic votes on raising the debt ceiling. Doing so enables the Treasury to borrow or print more money so that the government can meet the obligations it has already incurred by past appropriations. Failing to do so will mean that the government will shut down and go into default and not be able to pay, among other things, the interest on the Treasury bills that were issued in the past, and thus would trigger a slide in the country’s credit rating. A default would be so bad that it is expected that the ceiling will be raised, as it always has in the past.
Because of the very drastic consequence of not doing so, when it comes time to raise the debt ceiling, some grandstanding congresspeople take the opportunity to preen as being fiscally responsible by threatening default, ignoring the fact that the government is just asking for funding to pay for things that Congress has already authorized in the past. In other words, the fiscal responsibility horse already left the barn and what Congress is now being asked to do is pay what was promised to be paid. It is like refusing to pay the bill after you have consumed a meal at a restaurant.
This brinkmanship has become a recurrent theme. In the past, the issue was resolved at the last minute since defaulting on the debt would create considerable chaos and uncertainty, especially in the financial markets ,and we know how Congress is beholden to Wall Street. It usually ends with the ceiling being raised at the last minute and that will happen again.
But that has not prevented the same ritual from being played out again.
The House will vote next week on a measure to stave off a U.S. debt default, Majority Leader Steny Hoyer said Friday, although it’s unclear if Democrats will pair that with a stopgap funding bill to avoid a government shutdown on Oct. 1.
Hoyer confirmed in a letter to colleagues that the party will look to suspend the cap on how much money the government can borrow, rather than increase that figure outright. Both parties have been far more willing to support a suspension than a hike in recent years, since it gives lawmakers some cover from the political blowback that could follow.
The Maryland Democrat didn’t provide a timeline for the length of the planned suspension, which amounts to hitting pause on the often-volatile debt issue. If Democrats choose to vote on a stand-alone debt measure, it would force Republicans to go on the record after both parties agreed to suspend the debt ceiling just two years ago as part of a budget deal with then-President Donald Trump
Decoupling government funding from the debt limit would leave many Republicans more willing to back a short-term government funding bill that includes billions of dollars in disaster aid for hurricane-battered red states across the southeast, which was requested by President Joe Biden.
That detachment of debt from government funding would rob Democrats of a potential messaging opportunity against the recalcitrant GOP. Democratic leaders have been mulling whether to tie the two together, thus daring Republicans to go on the record against a plan to avoid a shutdown and debt default while offering disaster aid.
Republicans insist that Democrats can raise the debt limit on their own through reconciliation, or the special budget process that they’re using to pass trillions of dollars in party priorities without GOP votes. But moderate Democrats aren’t likely to support a debt ceiling hike and the White House has said it wants to pursue a bipartisan solution, accusing Republicans of playing chicken with a typically bipartisan issue that could have calamitous consequences.
As you can see, this is a lot of inside baseball maneuvering about process that is much enjoyed by political junkies. It is essentially theater, with people playing the same roles in the same plot with the same ending. It is ridiculous.