{"id":46904,"date":"2023-01-26T09:42:43","date_gmt":"2023-01-26T09:42:43","guid":{"rendered":"http:\/\/www.brandon.ddtest.info\/multisite-test\/veterans-of-the-obama-era-debt-ceiling-standoff-on-the-current-one-we-may-be-doomed\/"},"modified":"2023-01-26T09:42:43","modified_gmt":"2023-01-26T09:42:43","slug":"veterans-of-the-obama-era-debt-ceiling-standoff-on-the-current-one-we-may-be-doomed","status":"publish","type":"post","link":"http:\/\/www.brandon.ddtest.info\/multisite-test\/veterans-of-the-obama-era-debt-ceiling-standoff-on-the-current-one-we-may-be-doomed\/","title":{"rendered":"Veterans of the Obama-era debt ceiling standoff on the current one: We may be doomed"},"content":{"rendered":"<p> \n<\/p>\n<div>\n<p class=\"story-text__paragraph  \">\u201cThere\u2019s the potential for it to be very bad,\u201d said Kamin, who did a stint as a top Biden economic staffer before returning to academia last year. \u201cWe\u2019re back here, and there\u2019s a real risk to the economy on the line.\u201d<\/p>\n<p class=\"story-text__paragraph  \">Kamin isn\u2019t the only one struck by a foreboding sense of d\u00e9j\u00e0 vu. From the White House to Wall Street, a growing number of veterans of the 2011 debt ceiling crisis are again watching a story of bluster and brinkmanship play out \u2014 and are terrified this will be the time it ends with the country in financial ruin.<\/p>\n<aside class=\"story-enhancement  standard\">\n<\/aside>\n<p class=\"story-text__paragraph  \">\u201cIt feels like there\u2019s a desire to get closer and closer to the brink,\u201d said David Vandivier, who was a senior Treasury official during the 2011 negotiations. \u201cAt a certain point, you don\u2019t know where the line is.\u201d<\/p>\n<p class=\"story-text__paragraph  \">The parallels to the Obama-era stalemate are clear, as House Republican leaders vow to place restraints on a Democratic administration, while also trying to manage their troublesome conservative wing.<\/p>\n<p class=\"story-text__paragraph  \">But unlike in 2011, Republicans are preparing to stare down the White House with no clear consensus on what they want in exchange for keeping the U.S. financial system afloat. The prevailing principle, instead, appears to be extracting a degree of political pain for President Joe Biden. And perhaps most worryingly \u2014 Democrats, economists and even some Republicans say \u2014 there\u2019s little confidence that House Speaker <span>Kevin McCarthy<\/span> has the influence to successfully steer his conference away from the brink.<\/p>\n<p class=\"story-text__paragraph  \">\u201cI wish I could look at this, having been through a bunch of these, and say there\u2019s going to be a bunch of drama but this is how it gets resolved,\u201d said Brendan Buck, an aide to then-GOP House Speaker John Boehner during the 2011 debt negotiations. \u201cBut I don\u2019t know how this gets resolved. There are just huge obstacles here [that] I don\u2019t think were quite as problematic in 2011.\u201d<\/p>\n<p class=\"story-text__paragraph  \">Or as Sen. <span>Brian Schatz<\/span> (D-Hawaii) put it: \u201cI think these people are nuts, and they\u2019re serious.\u201d<\/p>\n<aside class=\"story-enhancement  standard\">\n<\/aside>\n<p class=\"story-text__paragraph  \">Dan Pfeiffer, a senior Obama aide during the 2011 showdown, said that of his entire time in the administration, he was never more scared than in the final days of that debt ceiling fight, \u201cbecause it was very possible we were going over the cliff.\u201d<\/p>\n<p class=\"story-text__paragraph  \">For him, the similarities to now are obvious: a Democratic president unsure if the leader of the opposing party has the \u201cclout\u201d to get his conference on the same page. But the White House, at the time, felt Boehner understood and took seriously the dangers of default.<\/p>\n<p class=\"story-text__paragraph  \">\u201cBoehner may have been willing to put more of his ass on the line. He did intellectually and substantively understand why default was terrible,\u201d Pfeiffer said. \u201cI\u2019m not sure that McCarthy understands that, that McCarthy cares, that McCarthy would value the full faith and credit of the United States over his own job.\u201d<\/p>\n<p class=\"story-text__paragraph  \">The U.S. has never intentionally defaulted on its debt, a track record that has made its Treasury securities a safe haven for investors globally and allowed the government to borrow money at low interest rates.<\/p>\n<p class=\"story-text__paragraph  \">There is universal consensus that a debt ceiling breach would be a historic catastrophe. Interest rates would skyrocket and the stock market would tank. The economy would spiral into a recession, shaking consumer confidence and decimating the nation\u2019s financial credibility on the world stage. The impact could ripple across the globe, prompting debt crunches in lower-income countries with foreign currency reserves held in a suddenly weaker U.S. dollar.<\/p>\n<aside class=\"story-enhancement  standard\">\n<\/aside>\n<p class=\"story-text__paragraph  \">At the Treasury Department, officials would be forced to prioritize what payments it could make to bondholders \u2014 a logistical challenge the government has never attempted before, and one sure to invite blowback for funneling money to foreign investors while Social Security and other benefits go unfunded. <\/p>\n<p class=\"story-text__paragraph  \">\u201cYou\u2019re shaking the bedrock of the global financial system to the core,\u201d said Mark Zandi, the longtime chief economist at Moody\u2019s Analytics, <a href=\"https:\/\/www.moodysanalytics.com\/-\/media\/article\/2023\/debt-limit-brinkmanship.pdf\" class=\" js-tealium-tracking \" target=\"_blank\" data-tracking=\"mpos=&amp;mid=&amp;lindex=&amp;lcol=\" rel=\"noopener\">who projects that<\/a> just a few weeks of default would double the unemployment rate and wipe out $12 trillion in household wealth.<\/p>\n<p class=\"story-text__paragraph  \">The severity of those consequences has so far offered some comfort on Capitol Hill and in company boardrooms, where the belief is that the cost of failure is so high that the parties can\u2019t afford not to reach a deal. Since the 2011 standoff, Congress has raised or suspended the debt ceiling nine times, three of which came under former President Donald Trump.<\/p>\n<p class=\"story-text__paragraph  \">\u201cAmerica\u2019s not going to default on its debt. There are going to be a lot of stories and gnawing and gnashing of teeth in the media about what\u2019s going to happen,\u201d said McCarthy ally and former Rep. Rodney Davis (R-Ill).<\/p>\n<p class=\"story-text__paragraph  \">Though the possibility of default is still several months away, Biden has signaled plans to meet with McCarthy on the issue, though the White House has said he will merely reiterate his current position that the debt ceiling is not subject to negotiation. In both the administration and Republican leadership, officials have begun privately gaming out endgame scenarios.<\/p>\n<aside class=\"story-enhancement  standard\">\n<\/aside>\n<p class=\"story-text__paragraph  \">Democrats believe that cutting discretionary spending will prove deeply unpopular with the public once Republicans pinpoint the programs they\u2019d slash. That, in turn, will force Republicans to moderate their demands. Within the GOP, there\u2019s widespread belief the White House will eventually drop its \u201cno negotiation\u201d stance and seek a bipartisan resolution.<\/p>\n<p class=\"story-text__paragraph  \">\u201cThe administration and the Senate needs to realize Kevin\u2019s serious,\u201d Davis said. \u201cHe\u2019s serious about having this discussion [about spending cuts].\u201d<\/p>\n<p class=\"story-text__paragraph  \">The White House declined to comment for this article, though officials have previously said that while Biden won\u2019t negotiate over the debt ceiling, he\u2019s open to discussing broader fiscal policies.<\/p>\n<p class=\"story-text__paragraph  \">McCarthy spokesperson Chad Gilman said the speaker looked forward to discussing a \u201cresponsible debt ceiling increase\u201d with Biden, and added the White House should be open to negotiating \u201chow we can put America on a sounder fiscal path by finally addressing irresponsible government spending.\u201d<\/p>\n<p class=\"story-text__paragraph  \">But whenever that meeting does happen, few expect Biden and McCarthy to find any common ground. The White House has shrugged off concerns about its spending, buoyed by what it sees as the successful role its trillion-dollar relief Covid-relief plan played in accelerating the economic recovery.<\/p>\n<p class=\"story-text__paragraph  \">McCarthy, meanwhile, may struggle to find a set of spending cuts that can satisfy his own conference, much less win support across the aisle. Some Republicans have floated a range of proposals targeting programs like Medicare and Social Security, even as McCarthy and Trump have publicly dismissed the idea of touching entitlements.<\/p>\n<aside class=\"story-enhancement  standard\">\n<\/aside>\n<p class=\"story-text__paragraph  \">Though the Republican party is focused on securing sharp funding reductions across government, there\u2019s no agreement so far on how much or where exactly they should come from. Some, like Rep. <span>Andy Biggs<\/span> (R-Ariz.), have questioned the need to raise the debt ceiling at all.<\/p>\n<p class=\"story-text__paragraph  \">\u201cIt\u2019s scary because with everything that McCarthy has given away to his right wing, he may have restricted his range of motion in ways that are going to be very dangerous,\u201d said Sen. <span>Michael Bennet<\/span> (D-Colo.).<\/p>\n<p class=\"story-text__paragraph  \">In the interim, many of the 2011 veterans have spent recent weeks emphasizing the gravity of the situation to anyone who will listen, fearful that every week that goes by without progress ups the odds of a disastrous outcome.<\/p>\n<p class=\"story-text__paragraph  \">\u201cThis time,\u201d said Zandi, \u201cit feels different to me. It feels much more dysfunctional.\u201d<\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/news.google.com\/__i\/rss\/rd\/articles\/CBMiUWh0dHBzOi8vd3d3LnBvbGl0aWNvLmNvbS9uZXdzLzIwMjMvMDEvMjYvb2JhbWEtZXJhLWRlYnQtY2VpbGluZy1zdGFuZG9mZi0wMDA3OTU3NNIBAA?oc=5\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u201cThere\u2019s the potential for it to be very bad,\u201d said Kamin, who did a stint as a top Biden economic staffer before returning to academia last year. \u201cWe\u2019re back here, and there\u2019s a real risk to the economy on the line.\u201d Kamin isn\u2019t the only one struck by a foreboding sense of d\u00e9j\u00e0 vu. From &hellip;<\/p>\n","protected":false},"author":1,"featured_media":46905,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[161],"tags":[],"_links":{"self":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/46904"}],"collection":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/comments?post=46904"}],"version-history":[{"count":0,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/46904\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media\/46905"}],"wp:attachment":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media?parent=46904"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/categories?post=46904"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/tags?post=46904"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}