Dem 51
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GOP 49
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The Game of Debt-Ceiling Chess Is in Full Swing

On one hand, the U.S. has already reached its debt ceiling, and so the time to talk about it is now. On the other hand, the Treasury Department won't actually be in a position of having to make tough decisions until June, so it's possible to postpone substantive action for weeks and months, if necessary. Add it up, and it's no surprise that we're getting lots and lots of posturing, but nothing that brings the country so much as a micrometer towards a resolution.

To start with, Speaker Kevin McCarthy (R-CA), apparently trying to get out ahead of potential attacks on his conference, has been telling anyone who will listen that his real goal with all of this maneuvering is to cut government spending so that Medicare and Social Security can be saved without having to reduce benefits. He's either stupid or lying, and the smart money is on lying. House Republicans are already on record as saying they won't support tax increases and they won't support cuts to defense spending. That means that McCarthy cannot plausibly accomplish what he claims he's trying to accomplish. There just isn't enough non-defense spending to cut.

Meanwhile, Republicans in both chambers have joined with their (one-time?) allies on Wall Street to insist that the U.S. will not default on its debt, because there will always be enough money coming in to pay off bondholders. That is a dubious proposition on a number of levels. First, paying bondholders and stiffing other people might please Wall Street, but it would be pretty sleazy when it comes to, say, people who are depending on their federal paycheck. Or their food stamps. Or their healthcare. Further, it's not clear that the economic sector would regard "Hey! We're still paying our bonds off!" as "not a default." Finally, nobody is certain that the government has the legal authority, or the technical tools, to prioritize one obligation over another. In any case, the White House says the whole proposal is "intellectually bankrupt" and is a nonstarter.

And finally, in a reminder that the House does not have a monopoly on fire-breathing Republicans, 24 Senators announced yesterday that they will not support a debt ceiling increase without cuts in spending. This was done in the form of an "open letter" to the White House, and the signatories included all the usual suspects—you know, your Rand Pauls and your Ted Cruzes and your Mike Lees. However, it's really just an empty gesture. Undoubtedly, every Republican senator was given an opportunity to sign, and nearly two dozen of them—including Senate Minority Leader Mitch McConnell (R-KY)—said "No, thanks!" So, there are clearly more than 10 Republicans available to break a filibuster, if the circumstances call for it.

The bottom line, from our vantage point, is that Congressional Republicans—well, the MAGA types—are digging in for an ugly fight. However, they know full well they are at risk of getting flambéed by voters, so they are trying their very best to get their messaging out there early and often. We shall see how well that works. Perhaps the Democrats should start using the slogan MAGDA: Make a Great Depression Again. (Z)

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