On her show last night, Rachel Maddow explained the genesis of a dysfunctional congressional borrowing situation that began in 1917 when Woodrow Wilson changed his mind about not getting involved in WWI and needed to placate isolationists and deficit hawks. The debt ceiling was created for them. It's still plaguing us today, over 100 yers later-- and for literally no reason whatsoever. It doesn't noting and has no function but the create a stupid partisan drama every few years-- one that Mitch McConnell, the most hated man in American politics-- keeps using for electoral politics, even though it always backfires on him and makes people mistrust the Republicans even more than they already do. Maddow: "It doesn't constrain U.S. government spending in any meaningful way at all. It just gives Congress this embarrassing, awkward, procedural thing they have to do every so often, because if they don't the most important country in the world economy will default on its debt; we'll fling ourselves into a fiery, self-imposed financial train crash for no substantive reason other than the fact that nobody ever thought to turn off this stupid thing that we turned on in 1917 because we needed to placate people who felt bad that we changed our mind about entering that war."
Last night the House passed-- 220-211, all Democrats voting yes and all Republicans voting no-- a short-term funding bill that would keep federal agencies open and crucial government checks flowing until Dec. 3 while raising the debt limit through December 2022. McConnell and the Republican Party seem intent on triggering a catastrophic recession in the hope that it will rebound badly on Biden and the Democrats.
Another moronic, dysfunctional Senate rule won't allow it to be voted on until Friday-- just 6 days from the end of the fiscal year and a potential Republican-triggered shutdown, meant to accomplish nothing other than embarrassing Biden. Gamesmanship, brinksmanship, a high-stakes game of chicken... more filibuster nonsense that Manchin and Sinema are clinging to.
The only thing anti-patriotic members-- from McConnell to Sinema-- seem to care about is not pissing off Jewish campaign contributors who are demanding the U.S. spend another billion dollars on Israel's Iron Dome missile defense system. To hell with America's credit worthiness-- so long as Israel gets its billion dollars. McConnell, dripping poisonous partisan venom: "We are prepared to support a continuing resolution... What we’re not prepared to do is to relieve the Democratic president, Democratic House and Democratic Senate from their governing obligation to address the debt ceiling." Louisiana Senator John Kennedy, so far the only Republican to say he'll vote to keep a default from happening, of the 10 needed to overcome McConnell's filibuster, says McConnell isn't bluffing. Louisiana's other Republican senator, Bill Cassidy, is likely to join him, as is Lisa Murkowski (R-AK) and Richard Shelby (R-AL), a former Democrat and who is retiring anyway, nay voted yes too. But that still leaves the Democrats 6 votes short of cloture-- and a shutdown. What would that mean in practical terms? Well, aside from triggering a recession and disrupting global markets, Social Security and Medicare benefits wouldn't be paid nor would military salaries. Borrowing costs for credit cards, mortgages and car loans would increase and states in need of federal funds for the damages just done by Hurricane Ida, particularly Louisiana, Mississippi, Alabama, New Jersey, New York and Virginia, would be on their own.
This morning, writing for The Hill, Karl Evers-Hillstrom reported that the debt ceiling fight pits corporate America against McConnell and the Republicans. McConnell and his cronies "digging in on their opposition to raising or suspending the debt limit, prompting sharp warnings from lobbying groups that represent some of the biggest U.S. corporations. The stakes are high in the standoff between Democrats and Republicans. Defaulting on the debt-- or even coming dangerously close to doing so-- could undermine the nation’s credit rating and upend the global financial system, posing a major risk to company stock prices and corporate bonds. 'The United States of America defaulting on its obligations is not an option; we are counting on Congress to take the necessary steps to address the debt limit,' said Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce."
Republicans want Democrats to “own” the debt ceiling hike by including it in their $3.5 trillion reconciliation bill, which can pass the 50-50 Senate with a simple majority. But Democrats are insisting on a bipartisan vote to raise the limit, noting that it won’t be included in their reconciliation package, which may not be ready by the time the U.S. nears a default sometime in October. A bipartisan measure would require 60 votes to pass the Senate.
The risky strategy pits Republicans against corporate America, whose leaders are urging Congress to raise or suspend the debt limit as soon as possible given the likely financial turmoil that would ensue.
A coalition of groups representing investment firms and banks, including Morgan Stanley and Bank of America, warned congressional leaders in a letter last week that a default would damage the nation’s credit, make it harder to pay down debt and pummel financial markets that rely on U.S. Treasury bonds.
“Defaulting on our existing obligations would be irresponsible and do irreparable harm to the U.S. economy and taxpayers,” the groups wrote.
The Business Roundtable, which represents the CEOs of some of the nation’s largest companies, separately sounded the alarm that a default would saddle the federal government and private companies with significantly higher borrowing costs.
“Failure to lift the U.S. federal debt limit to meet U.S. obligations would produce an otherwise avoidable crisis and pose unacceptable risk to the nation’s economic growth, job creation and financial markets,” Business Roundtable CEO Joshua Bolten and Walmart CEO Doug McMillon wrote in a letter to congressional leaders.
Republican opposition to raising the debt limit underscores the divide between GOP lawmakers and corporate America that has only grown in recent years. Company executives can still count on Republicans to deliver tax cuts, but their influence has waned on other hot-button issues like climate change, voting rights and immigration.
No House Republicans voted for the John Lewis Voting Rights Advancement Act after more than 150 large corporations employing 4 million U.S. workers urged them to support the bill. Corporate America also failed to generate GOP support for the Equality Act, a bill that would codify discrimination protections for LGBTQ individuals, and measures to provide a pathway to citizenship for undocumented immigrants.
“The Republican Party has become a populist party, thanks largely to Donald Trump but also because of the presence of what’s now the Republican base. And for that very reason, corporate America has much less influence than it used to have,” said Geoff Kabaservice, director of political studies at the Niskanen Center, a right-leaning think tank.
“I think they’re right to be nervous,” he added, referring to major corporations worried about the potential of a default.
While many Republicans, including McConnell, have said that nobody wants the U.S. to default on its debt, GOP lawmakers have also expressed confidence that Democrats will take the blame if it happens since they control Congress and the White House.
“If the Democrats don’t do their job, I guess it will be political blowback for them,” Sen. Rick Scott (R-FL), head of Senate Republicans’ campaign arm, said last week.
Business groups haven’t called out Republicans in the debt limit battle, instead urging both sides to come to an agreement. Corporations are wary of angering congressional Republicans, who have vowed to take revenge on companies that denounced state-level GOP voting laws and Republican attempts to overturn the 2020 election.
Even the Chamber of Commerce, which spends millions of dollars on ads backing Republicans’ reelection campaigns, drew backlash from GOP lawmakers like Sen. Tom Cotton (AR) after it endorsed several House Democrats in the 2020 election.
“Corporate America talked a big game about not donating to the campaigns of Republican politicians who voted to overturn the Electoral College result, and yet most of them in the end came around because they believe Republicans will be in the majority after the 2022 elections,” Kabaservice said. “On some level they think Republicans will still support their interests, whether it be tax cuts or deregulation.”
The U.S. came close to defaulting on its debt in 2011, when congressional Republicans refused to raise the debt ceiling unless Democrats agreed to cut spending. The spat prompted one firm to downgrade the nation’s credit rating.
According to a new poll for Politico by Morning Consult, not many Americans are engaged in the fight over the debt ceiling yet. When asked how much have you seen, read or heard about lawmakers facing a Sept. 20 deadline to fund the government in order to avoid a government shutdown, only 11% said "a lot." 28% had heard something about it (less than had heard about Nicki Minaj's anti-vaxxer nonsense), 27% hadn't heard much and 34% had heard nothing at all. Maybe the Democrats need to do a little old fashioned communicating on this before the GOP turns the issue against them?