Trump and the debt ceiling
According to Politico, Trump is against cutting Social Security and Medicare:
Former President Donald Trump issued a warning to Republican lawmakers on Friday: Don’t lay a finger on entitlement programs as part of the debt ceiling showdown with the White House.
“Under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security,” Trump said in a video message.
. . .
Nevertheless, in issuing his statement now, Trump places his fellow Republicans in a political corner. Several of them have openly discussed using using the looming debt ceiling standoff to extract cuts in non-discretionary spending, though party leadership has not fully embraced such a demand.
This does indeed put Republicans in a political corner. There is no way to make meaningful progress on deficit reduction without including entitlement reform (assuming that tax increases are a non-starter for Republicans).
Bloomberg reports that Trump has also insisted that Republicans stand tough on the debt ceiling:
Donald Trump is egging on Republicans already intent on using the federal debt limit as leverage to extract concessions from Democrats, potentially pushing the country further toward the brink of default as the former president seeks to reassert his grip on the GOP.
The former president has been posting exhortations on social media for Republicans to “be tough” and not “give in” as the US approaches running out of cash later this year, asserting the party “can get back almost everything” Democrats won legislatively under President Joe Biden.
This is good politics for Trump. He needs to stop whining about 2020 – which is much more important to him than to anyone else, even in MAGAland – and claim that he did make American great again and will do so once more if re-elected. He needs a positive message. Defending entitlements will also distinguish him from any Republican challengers.
Of course, what’s good for Trump is often bad for America, but maybe not in this case. Trump’s statement on entitlements will strengthen Biden’s hand on the debt ceiling. He can refuse to negotiate on entitlements and point out that Trump agrees with him.
Finally, by rejecting compromise while he weakens the bargaining position of Republicans, Trump is really putting House Republicans in a difficult spot. Good.
I have no idea how this will play out, except that it will be a shitshow and remind everyone how much they hate Congress.
In 2025 the Tax Cuts and Jobs Act goes away December 31 for individuals. The Corporate part of this Act remains forever.
On the corporate side; The 2017 tax law cut the corporate tax rate from 35 to 21 percent and shifted toward a territorial tax system. Multinational corporations’ foreign profits largely no longer face U.S. tax.
Pass Through Income: The law effectively cuts the marginal individual tax rate on pass-through income (income from businesses such as partnerships, S corporations, and sole proprietorships that business owners claim on their individual tax returns) by one-fifth. The top 1 percent of households will get 61 percent of this tax cut on pass-through income in 2024, while the bottom two-thirds of households will see just 4 percent, according to JCT.
There is more to it than just this benefiting corporations and the upper 5% of households. Make these tax breaks revert back for Corporations etc. also. Individuals lose their breaks in 2025. It would appear (at least to me), we should be changing the corporate tax structure back to what it was.
2017 Tax Law
trump is attempting to win back his base by siding with people in opposition to the Republican support of big business. You are right, Republicans have little leeway and are boxed in. Either way they could lose. Side with trump? They may have to do so.
So let’s look at this rationally. First question, starting with Nixon, how much of the debt has been incurred under GOP presidents and how much under Democrats? I have not done the math but I am guessing at least 2/3rds. Admittedly, both Bush the dumber and Trump the dumbest faced crises that were only partly of their making, but Obama and Biden have also faced crises that they inherited from their GOP predecessors. Second, social security contributes exactly zero to the national debt and contributes not a dime to annual deficits— because every penny spent has already been contributed by workers and their employers. All social security does is help hide how much the rest of the government is in the red. Third, the only time in my 70 year lifetime that the budget was balanced was in the later years of the Clinton presidency when both tax hikes, a booming economy and some discretionary cuts. Fourth, arguably Biden has shaved the debt by almost 10% because of inflation. Now if the GOP wants to hurt people to save tax cuts for the richest Americans they should simply say that and limit their attacks to food stamps, earned income tax credits, educational aids etc. make them sell the notion that Elon Musk deserves lower taxes more than a single mother with three kids needs help putting food on the table.
Once in the phase of net redemption of the Trust Fund debt, Social Security certainly pressures the Treasury’s deficit. In no way do I support cuts to benefits, but to the extent that cuts eliminated net redemption, the deficit would go down. That’s the case right now as I understand it.
Eric377
yes, if you don’t pay your debts, you can save a lot of money.
That’s another way the film flam man robs you of your savings.
Let’s not forget about the usefulness of those trillion-dollar coins.
This is mainly a reminder that the GOP is hugely complicit in Deficit increases.
Ironically, perhaps, because they seem to benfit most from it, at least when it’s due to enormous tax cuts and wealth transfers to their own kind.
But, okay. He’s like a stopped clock!
In related news…
Biden aides want to force GOP to abandon debt limit threats
Washington Post via Boston Globe – Jan 21 – not a free link
Shortly after last year’s midterm elections, a senior congressional Democrat called White House Chief of Staff Ron Klain and asked how the administration planned to prevent the new Republican House majority from using the debt ceiling — and the threat of a default that could wreck the economy — to force spending cuts.
Klain said the White House’s plan was straightforward, according to the lawmaker: Refuse to entertain any concessions, and launch a barrage of attacks highlighting the GOP position that would force Speaker Kevin McCarthy (R-Calif.) to fold.
“This debate is simple: We want to do the responsible thing, and they want to take the entire American economy hostage to cut Social Security and Medicare,” said the member of Congress, speaking on the condition of anonymity to reflect private conversations. Klain told the lawmaker that the fight could result in substantial political benefits for the Democratic Party. “The point he was making was clear: You can’t negotiate with people who take hostages.”
But the question remains what the administration will do if Republicans won’t raise the debt limit without negotiations.
House Republicans have increasingly signaled that they will force a showdown with the administration over the nation’s debt ceiling, which sets a statutory limit on how much the federal government can borrow. The Treasury Department said Thursday that the government has hit the current $31.4 trillion limit, and it’s now undertaking complex financial maneuvers so that federal agencies can operate – and bills can be paid – without borrowing more. That will work until sometime this summer, but at some point, Congress will need to raise or suspend the debt ceiling, or the United States will default on its obligations for the first time, undermining the full faith and credit of the U.S. government and potentially causing a global economic shock.
Many GOP lawmakers have said that they will not approve a debt ceiling increase without cuts to spending programs that the Biden administration has vowed to protect, creating an impasse with no clear resolution.
The GOP’s stance has forced White House officials to grapple in recent weeks with what their options would be if the Treasury Department can no longer meet the federal government’s payment obligations, according to five people with knowledge of preliminary internal conversations.
Those discussions have led administration officials to conclude, at least for now, that the only viable path is to press Republicans to abandon their demands to extract policy concessions over the debt limit – a position they have publicly reaffirmed in recent weeks. …
Ron Klain Expected to Step Down as Biden’s White House Chief of Staff
NY Times – just in
Ron Klain, the White House chief of staff who has steered President Biden’s administration through two years of triumphs and setbacks, is expected to step down in coming weeks in the most significant changing of the guard since Mr. Biden took office two years ago.
Mr. Klain has been telling colleagues privately since the November midterm elections that after a grueling, nonstop stretch at Mr. Biden’s side going back to the 2020 campaign, he is ready to move on, according to senior administration officials, and a search for a replacement has been underway. …
untilthe Dems make clear that Social Security is not a cause of the national debt, they can’t be trusted not to …oh so reluctantly…fall into a Grand Bargain to cut Social Security… so we won’t have to raise taxes to pay for what Congress voted for already.
Who he?
Biden to Tap Jeff Zients as His Next White House Chief of Staff
NY Times – Jan 23
President Biden plans to name Jeffrey D. Zients, his former coronavirus response coordinator, as the next White House chief of staff heading into a critical new phase as he confronts a Republican House and is expected to kick off a re-election campaign, officials familiar with the decision said on Sunday.
Mr. Zients will replace Ron Klain, who has run Mr. Biden’s White House since the president took office two years ago and is preparing to step down sometime after the State of the Union address on Feb. 7. The change at the top may presage other personnel shifts in the coming weeks and months as the White House gears up for the 2024 election.
An entrepreneur and management consultant who organized the largest vaccination campaign in American history, Mr. Zients is widely respected in Biden circles as a strong and capable technocratic leader, but he has little of the political experience helpful in overseeing a presidential campaign. His selection suggests that the president could lean on Mr. Zients to help run the government while other advisers focus on the politics of winning a second term. …
Wouldn’t it be interesting if President Biden read aloud Sec. 4 or the 14th Amendment and directed the treasury to pay the government’s debts, refusing to comply with the debt ceiling as being imposed by an unconstitutional statute.
Where the GOP is going with this (presumably) …
(Over objections from tax-guru Grover Norquist, apparently.)
Go Ahead, Republicans, Pass a National Sales Tax
The New Republic – Jan 20
Consumption taxes are having a moment, as they do every 20 years or so. They are never a good idea, but the current iteration, which House Speaker Kevin McCarthy has promised to bring to the floor, is a worse idea than usual.
Under the Fair Tax bill sponsored by Representative Buddy Carter, a Georgia Republican, all income, capital gains, estate, gift, corporate, and payroll taxes would be eliminated. They would be replaced by a flat 30 percent national sales tax on everything you buy. Even Grover Norquist, the hard-right president of Americans for Tax Reform and flat-tax advocate who famously said he wanted to shrink government “to the size where I can drag it into the bathroom and drown it in the bathtub,” told Joseph Zeballos-Roig of Semafor this week that the Fair Tax bill was “a political gift to Biden and the Democrats.” Elsewhere Norquist has called it “one of the stupider ideas that have been put forward.” If the “fair tax” passed in the House it would still have no chance of becoming law, of course, because the Senate and the White House would stop it. That makes a purely symbolic House vote all upside for the Democrats. …
Off topic, but…
I woke up this morning with the notion that once another trove off classified documents had been found connected with Joe Biden, that Kevin McCarthy would decide to declare that the 2020 presidential election was nullified and the presidency would revert to the runner-up & previously elected guy, forthwith.
That Rudy Giuliani, John Eastman and Sydney Powell had determined this was permitted in a rarely-read & little-understood clause in the Constitutional Amendment on presidential elections.
Next step after that: VP Harris convenes the Cabinet, which decides under the 25th Amendment that newly-reinstalled President Trump is incompetent, and she takes over the presidency.
After that, McCarthy kicks out Harris and takes over the Presidency himself, being third-in-line.
Before he can appoint a new Cabinet, he is declared incompetent and is replaced by Patty Murray, Senate president pro-tem & fourth-in-line.
Peace & calm then returns.
Kevin McCarthy, Ben Affleck, and the debt limit: how the 2011 showdown informs the latest fight
Boston Globe – Jan 21
It was July 2011 and Representative Kevin McCarthy was looking for votes to avoid a first-ever government default. The rebellious Tea Party conservatives were balking at a deal endorsed by GOP leaders and McCarthy, then the No. 3 House Republican, needed something to draw in just enough lawmakers to get it over the line.
So, in a closed-door meeting of Republican lawmakers, he cued up a scene from the 2010 Boston heist movie “The Town.”
“I need your help. I can’t tell you what it is. You can never ask me about it later and we’re gonna to hurt some people,” Ben Affleck’s character says to his friend, played by Jeremy Renner, in the clip McCarthy played. Renner doesn’t hesitate. “Who’s car we gonna take?” is all he says.
McCarthy’s role as the House Republican leadership team’s motivator and chief vote counter in that first major debt limit confrontation was largely on the periphery of the 2011 negotiations, which ended with Congress raising the limit at the last minute before the government defaulted on some of its obligations. The delay led to the first-ever downgrade of the nation’s AAA credit rating and higher government borrowing costs.
A dozen years later, Republicans and Democrats are on a similar collision course with potentially disastrous implications for the US economy. The United States officially hit its $31.4 trillion debt limit on Thursday and Treasury Secretary Janet Yellen began using accounting maneuvers known as “extraordinary measures” to allow the federal government to keep borrowing to pay all its bills for several more months. …
This time, McCarthy moves to center stage as House speaker, a job he narrowly won by promising far-right lawmakers he would not agree to a debt limit increase unless it was paired with significant fiscal reforms — changes that most likely would include major cuts to entitlement programs such as Social Security and Medicare. He’s no longer just a salesman who needs to unite his troops. He’s the top negotiator and required to master the policy details as well as the politics, a role that doesn’t play to his strengths, said former Illinois Republican representative Joe Walsh.
“Kevin was the rah rah guy, the cheerleader, the motivator. He’d show movie clips. He’d put Vince Lombardi quotes up on the wall. He’d do a ton of [stuff] like that. And those of us who were committed in opposition would just laugh at it,” said Walsh, who was a freshman Tea Party member in 2011. “To anybody committed to an issue, Kevin can’t move them.… It’s just not his strength. He’s not a policy guy.”
McCarthy also has less room to maneuver. Republicans had a 49-seat House majority in 2011 under then-House Speaker John Boehner. Now, it’s just 10 seats. In addition, House Republicans overall are far more conservative and combative than they were 12 years ago and intent on using the debt limit — their greatest point of leverage with Democrats controlling the Senate and the White House — to reduce federal spending.
It’s a perilous path, said Dave Camp, a Republican who chaired the House Ways and Means Committee in 2011.
“There’s only so much leverage with regard to the debt limit,” he said. “There’s a point where if there is no agreement in the negotiations, what’s the alternative other than extending the debt limit? … At the end of the day, default is not an acceptable outcome.”
But Democrats and Republicans appear to have taken different lessons from the 2011 fight.
Republicans were able to get about $900 billion in spending cuts over 10 years and additional deficit reduction measures in exchange for agreeing to raise the debt limit. Now, with the national debt more than double what it was back then, Republicans say it’s even more imperative to negotiate a deal that cuts spending.
“Why wouldn’t we sit down now … set a path to get us to a balanced budget and let’s start paying this debt off and make sure the future generation has as many opportunities as we do?” McCarthy told reporters this past week.
Democrats, who watched as months of wrangling in 2011 ended with a credit downgrade even though the debt limit was raised just in time to avoid a default, have declined to cede any early ground. White House officials have been adamant they won’t negotiate now over raising the debt limit, which they point out simply allows borrowing for spending Congress has already authorized.
“There will be no hostage-taking,” White House press secretary Karine Jean-Pierre said this month. …
… But even if McCarthy can persuade the White House to negotiate and strike a deal, it might be difficult to get most House Republicans to approve it.
He probably would have to agree to cuts in defense spending, which some of his own members would oppose. Donald Trump on Friday warned Republicans not to cut Social Security or Medicare, so any changes to those popular programs could cost votes from some of the former president’s supporters as well as Republican moderates. And failure to secure enough spending cuts could lead the most conservative House members to push for McCarthy’s removal as speaker if he brings up a debt limit bill that relies mostly on Democrats to pass it. …
… In 2011, McCarthy and House leaders were able to persuade most Republicans to vote to increase the debt limit. The bill passed 269-161, with 174 Republicans in support and only half of the Democratic members. Many Democrats were unhappy that the agreement did not include tax increases on the wealthy in addition to spending cuts. On the Republican side, 66 opposed the bill, including some Tea Party members such as Walsh, who thought the deal didn’t reduce spending enough. …
The Republican con on the debt ceiling
Boston Globe – Liz Warren – Jan 22
The House Republican plan for the debt ceiling is about protecting the wealthy and the well-connected from paying their fair share in taxes — nothing more and nothing less.
House Speaker Kevin McCarthy and extremist Republicans are running a con game. They claim their plan to use the debt ceiling to trigger global economic chaos is about fiscal responsibility. It’s not. The House Republican plan for the debt ceiling is about protecting the wealthy and the well-connected from paying their fair share in taxes — nothing more and nothing less.
The United States has already exceeded the debt limit. While the US Treasury takes extraordinary measures to stave off an economic disaster, responsible leaders in Congress should prevent a crisis by ensuring that the ultra-wealthy and rich companies pay their fair share — instead of indulging Republicans’ fantasies of more tax cuts for their rich buddies coupled with spending cuts that will harm every hardworking family in America.
For generations, Republicans in Washington have relentlessly driven up the national debt by shoveling tax breaks to the rich. The cumulative impact has been staggering. In the 1950s, corporations paid 6 percent of the cost of running our country; today, that number has fallen to 1 percent. The 2017 Republican tax cuts were the latest blow — a $1.9 trillion giveaway to wealthy individuals and multinational corporations. And, as icing on the billionaire cake, decades of Republican attacks on the Internal Revenue Service have cut the risk of an audit in half for multimillionaires and corporate tax cheats.
Republicans don’t really care about the national debt. In fact, the first bill that House Republicans advanced would increase budget deficits in order to protect wealthy tax cheats. And new House rules say that additional tax cuts for billionaires and giant corporations don’t need to be paid for. It seems that more debt is fine with Republicans in Congress, so long as it profits the wealthy and well-connected.
But that’s not enough. Republicans have committed to vote on a MAGA tax plan to slash total taxes for the wealthy and corporations, while hiking overall rates for everyone else. The Republicans’ 30 percent national sales tax will increase the cost of everything that families need, from food to diapers to gasoline — a hard punch in the gut for families already living on a budget.
Even after hiking taxes on millions of Americans, Republican schemes would not reduce the national debt. But that’s no surprise. Republicans’ one unifying principle is government help for their rich donors and economic pain for everyone else. In 2011, they got their way. After nearly a decade of reckless Bush tax cuts, they manufactured another debt ceiling crisis, which they then leveraged to push through a massive austerity program.
Those GOP budget cuts cost the US economy more than 7 million jobs, delayed our recovery from the Great Recession by years, and helped set the stage for Donald Trump’s election in 2016. And just to drive the point home, Trump already blames Republicans’ poor showing in the midterms on people not feeling “the full gravity of the pain our nation is going through” — and expressing confidence that by 2024 it will be “much worse.” For Trump and MAGA Republicans, pain is the point.
To help Trump win again, McCarthy has declared that he will run the same play again: He will refuse to increase the debt limit until Democrats agree to cruel cuts to programs like Social Security and Medicare. …
Here’s the ultimate irony of today’s Republican scam: Without years of Republican handouts to the wealthy, there would be no debt ceiling hostage to take. If Republicans hadn’t spent nearly $2 trillion on the Trump tax cuts and abetted wealthy tax cheats by starving the IRS for a decade, the United States wouldn’t need to raise the debt ceiling this year. In fact, the current debt ceiling would have sustained federal spending well past the end of President Biden’s first term. Any debt crisis today should be laid squarely at the feet of the Republicans who worked tirelessly to help the wealthiest Americans avoid paying taxes.
Serious conversations about reducing the national debt should start here: Repeal the 2017 Trump tax giveaways to the wealthy. Let’s close that door before the next $1 trillion slips away.
Second, stitch up the last-minute loopholes punched in the 15 percent minimum tax on tax-dodging, billion-dollar corporations and give extra bite to taxes on corporate stock buybacks designed to goose up CEO pay. That’s another $100 billion plus.
Third, shut down tax havens for big, multinational corporations. Europe is imposing a minimum 15 percent tax on global profits so companies can’t hide profits overseas. The United States should join the other countries following suit, raising another $600 billion.
Fourth, ask billionaires to pay taxes on their growing piles of wealth. Biden’s tax on billionaires is a good place to start and raises over $300 billion in revenue.
Finally, say no to the ridiculous and unpopular Republican schemes to increase our national debt. Don’t gut the IRS or make Trump-era tax cuts permanent or cancel all taxes on the wealthy and corporations while loading up American families with a 30 percent sales tax on everything from milk to auto repairs.
Common sense changes in tax laws would strengthen our national balance sheet and, at the same time, reflect our values. They are also political no-brainers. The American people don’t support plunging the economy into a manufactured crisis. They don’t support cuts to vital programs so the wealthy can avoid paying their share. And they don’t support enduring brutal austerity to advance Trump’s and MAGA Republicans’ political fortunes.
Democrats need to stiffen their spines and say enough is enough. Every lawmaker should flat out refuse to cut a single dollar of support for hardworking families and small businesses while billionaire corporations and the ultra-wealthy escape paying taxes. If Republicans actually care about the national debt, they can do what generations of politicians have refused to do — finally agree that billionaires and giant corporations should pitch in just like everyone else.
Buy US Series I Savings Bonds with your tax refund
(I did not do this last year, as I learned about it too late. But I expect to this year. Surely this will help out the guv’mint in this time of extreme financial difficulty for them.)
“Buy U.S. Series I Savings Bonds with a portion or all of your tax refund for yourself or anyone. Issued by the Department of the Treasury, Series I bonds are low-risk bonds that grow in value for up to 30 years. While you own them they earn interest and protect you from inflation.
Buying savings bonds with your tax refund is simple and easy
Just tell your tax preparer you want to buy savings bonds with part or all of your refund! If you prepare your own return using tax software, the computer program will guide you. If you file a paper return, use Form 8888, Allocation of Refund (Including Bond Purchases)PDF. The instructions explain what you need to do.
In any single calendar year, you can purchase up to $5,000 of I bonds under this program.” …
Do yer bit to kick the can farther down the road.
How the US Government Amassed $31 Trillion in Debt
NY Times – Jan 21
Two decades of tax cuts, recession responses and bipartisan spending fueled more borrowing — contributing $25 trillion to the total and setting the stage for another federal showdown. …
(‘Nuf said? Details at the link.)
… America’s debt is now six times what it was at the start of the 21st century. It is the largest it has been, compared with the size of the U.S. economy, since World War II, and it’s projected to grow an average of about $1.3 trillion a year for the next decade.
The United States hit its $31.4 trillion legal limit on borrowing this past week, putting Washington on the brink of another fiscal showdown. Republicans are refusing to raise that limit unless President Biden agrees to steep spending cuts, echoing a partisan standoff that has played out multiple times in the last two decades.
But America’s ballooning debt is the result of choices made by both Republicans and Democrats. Since 2000, politicians from both parties have made a habit of borrowing money to finance wars, tax cuts, expanded federal spending, care for baby boomers and emergency measures to help the nation endure two debilitating recessions.
“There have been bipartisan tax cuts and bipartisan spending increases” driving that growth, said Maya MacGuineas, president of the Committee for a Responsible Federal Budget and perhaps the pre-eminent deficit hawk in Washington. “It’s not the simple story of Republicans cut taxes and Democrats grow spending. Actually, they all like to do all of it.”
Few economists believe the level of debt is an economic crisis at the moment, though some believe the federal government has become so large that it is taking the place of private businesses, hurting growth in the process. But economists in Washington and on Wall Street are warning that failing to raise the debt limit before the government begins shirking its bills — as early as June — could prove catastrophic.
Despite all the fighting, lawmakers have taken few steps to reduce the federal budget deficit they have produced. It has been nearly a quarter-century since the last time the government spent less than it received in taxes.
Because spending programs today are so politically popular, and because retiring baby boomers are driving up the cost of programs like Social Security and Medicare every year, budget experts say it is unrealistic to expect the books to balance again for another decade or more. …
“This does indeed put Republicans in a political corner. There is no way to make meaningful progress on deficit reduction without including entitlement reform (assuming that tax increases are a non-starter for Republicans).”
who said this?
it’s not true unless you count pointing out to people that if they are going to live longer than their grandparents they will need to save more, by raising their own “payroll tax”
about a dollar per week per year. it’s not a tax..it’s your money you save for your own future needs. if you insist it is a tax because the government takes your money, you are just confusing yourself. the government gives you back yourmoney with interest..it’s what makes it work to protect your savings from inflation, market losses, and failure to thrive…it’s insurance. in any case the republican refusal to raise taxes is part of the republican confidence game against the american people.
The Constitution Has a 155-Year-Old Answer to the Debt Ceiling
NY Times – Jan 23
The 14th Amendment, added to the Constitution in the wake of the Civil War, has been back in the news of late, mostly because the Supreme Court has taken aim at past decisions, notably Roe v. Wade, that employed it to protect Americans’ liberties. The amendment remains the most significant addition to the Constitution since the adoption of the Bill of Rights. Its magnificent first section established the principle of birthright citizenship and prohibited the states from denying to any person the equal protection of the laws, laying the foundation for many of the rights Americans prize.
Long-forgotten provisions of the 14th Amendment are suddenly crying out for enforcement. Section Two provides for a reduction in the number of representatives allocated to states that deny the right to vote to any “male citizens.” (Today this penalty would apply to the disenfranchisement of women as well.) Even at the height of the Jim Crow era, when millions of African Americans were prevented from voting, this penalty was never implemented. But with many states seriously limiting voting rights, its time may have come.
Section Three bars from public office anyone who took an oath to support the Constitution and subsequently participated in or encouraged “insurrection.” The events of Jan. 6, 2021, have focused new attention on this stipulation, which could be applied to participants in the uprising who previously held military, political, or judicial positions, including former President Donald Trump.
Then there is Section Four, which offers a way out of the current impasse over increasing the debt ceiling. “The validity of the public debt of the United States,” it declares, “shall not be questioned.” …
The Constitution Has a 155-Year-Old Answer to the Debt Ceiling
NY Times – Jan 23
The 14th Amendment, added to the Constitution in the wake of the Civil War, has been back in the news of late, mostly because the Supreme Court has taken aim at past decisions, notably Roe v. Wade, that employed it to protect Americans’ liberties. The amendment remains the most significant addition to the Constitution since the adoption of the Bill of Rights. Its magnificent first section established the principle of birthright citizenship and prohibited the states from denying to any person the equal protection of the laws, laying the foundation for many of the rights Americans prize.
Long-forgotten provisions of the 14th Amendment are suddenly crying out for enforcement. …
… Section Four … offers a way out of the current impasse over increasing the debt ceiling. “The validity of the public debt of the United States,” it declares, “shall not be questioned.” …
(So, it would seem that Congress must immediately enact a law stating that ‘further public discussion’ about the National Debt will cease forthwith. The Supreme Court would no doubt uphold it.)
here’s Jamie Galbraith @ The Nation, with several links removed so this will post:
The Debt Ceiling Explained. Once More, With Feeling… It is in the nature of articles about the debt ceiling that no matter how often one tries to set the record straight, nothing ever gets through. Noting this after reading my most recent effort, a physicist friend chided me for using “facts and logic” against “what everyone knows.” This states the problem precisely. So here I go again, once more, with feeling.
In The New York Times of January 17, 2023, Alan Rappeport offers an excellent account of what everyone knows. It is suitable for a technique I learned in high school in France, explication de texte. The method involves line-by-line quotation and analysis. Herewith:
No. The United States does not borrow in order to have funds to pay its obligations. It pays its obligations by check (or electronic transfer) as specified by law. It then issues bonds so that “investors across the globe” can save a safe US dollar-denominated asset, the Treasury bond, that pays interest, as cash and bank deposits do not. Cash and bank deposits are not “debt subject to limit” under the law. You can review a full list of what is subject to limit here. Cash and bank deposits are not on that list. It is possible to look these things up.
No, on several counts. First, a detail: Borrowing is revenue. It brings back money previously spent, which is the original (French) meaning of the word “revenu.” Since the United States government normally matches debt issue to deficits, revenue and spending normally match closely. But second, and more important, the United States government has no mechanical (or legal) need to “borrow…to pay its bills.” It may issue bonds, but it doesn’t have to. To repeat, the United States pays its bills by issuing checks as specified by law. What happens or doesn’t happen after that is a separate issue.
[there is much more in the linked article, including links to some of his other articles]