{"id":47918,"date":"2023-01-28T13:06:05","date_gmt":"2023-01-28T13:06:05","guid":{"rendered":"http:\/\/www.brandon.ddtest.info\/multisite-test\/the-debt-ceilings-silver-lining\/"},"modified":"2023-01-28T13:06:05","modified_gmt":"2023-01-28T13:06:05","slug":"the-debt-ceilings-silver-lining","status":"publish","type":"post","link":"http:\/\/www.brandon.ddtest.info\/multisite-test\/the-debt-ceilings-silver-lining\/","title":{"rendered":"The debt ceiling\u2019s silver lining"},"content":{"rendered":"<p> \n<\/p>\n<div>\n<p>What\u2019s worse than the\u00a0perennial and often brief Washington\u00a0game of chicken\u00a0over raising the debt ceiling\u00a0with the constant threat of defaults\u00a0compromising\u00a0the\u00a0\u201cfull faith and credit of the United States,\u201d\u00a0economists fretting,\u00a0markets swooning and\u00a0the\u00a0media\u00a0glued to the skirmish? The six-month debt ceiling tussle we are about to endure: The U.S. Treasury recently pushed the button on time-tested \u201cextraordinary measures,\u201d which will ensure that this episode plays out until the summer.\u00a0<\/p>\n<p>But rest\u00a0assured,\u00a0there will be no default, only\u00a0the\u00a0predictable ritual\u00a0dance punctuated by brinkmanship,\u00a0feigned\u00a0righteousness and rank political maneuvering.\u00a0The\u00a0ceiling will\u00a0ultimately\u00a0be raised with little gained by anyone\u00a0\u2014 in\u00a0Shakespeare\u2019s<a href=\"https:\/\/www.sparknotes.com\/shakespeare\/macbeth\/quotes\/page\/5\/#:~:text=Out%2C%20out%2C%20brief%20candle.&amp;text=Told%20by%20an%20idiot%2C%20full,5%2C%20lines%2016%E2%80%9327.\" target=\"_blank\" rel=\"noreferrer noopener\">\u00a0words<\/a>,\u00a0lots of \u201csound and fury signifying nothing.\u201d<\/p>\n<aside class=\"ad-unit ad-unit--mr1_ab\">\n<\/aside>\n<p>So,\u00a0what\u2019s\u00a0the value in a\u00a0process\u00a0that puts the world on edge\u00a0and\u00a0rattles markets\u00a0yet\u00a0typically results in\u00a0both sides overplaying\u00a0their hand\u00a0for\u00a0little\u00a0political gain?<\/p>\n<p>The answer is that\u00a0it\u2019s\u00a0a\u00a0rare\u00a0opportunity\u00a0in our politics for\u00a0the\u00a0few remaining\u00a0champions of fiscal prudence\u00a0in either party\u00a0to make their case in a forum\u00a0that\u00a0galvanizes\u00a0global attention.\u00a0Despite\u00a0the\u00a0dust\u00a0and\u00a0haze\u00a0kicked up,\u00a0we get\u00a0a valuable periodic report card on\u00a0America\u2019s\u00a0fiscal health.<\/p>\n<p>Stipulated,\u00a0there\u00a0is\u00a0much to criticize in the law.\u00a0To start, it\u2019s\u00a0redundant\u00a0to\u00a0the budget\u00a0and\u00a0appropriations process, which virtually always generates\u00a0spending amounts\u00a0that\u00a0exceed\u00a0the previously approved debt ceiling\u00a0and which are\u00a0not technically available until\u00a0the limit\u00a0is\u00a0raised. That\u2019s\u00a0a reality left\u00a0unsaid, for\u00a0example,\u00a0amid\u00a0the\u00a0hullabaloo over\u00a0the\u00a0recent\u00a0$1.7 trillion\u00a0omnibus.<\/p>\n<p>Since\u00a0such\u00a0large appropriations often require a future debt ceiling increase in order to be fully spent,\u00a0the\u00a0law\u00a0also\u00a0imposes a lingering uncertainty over government finances, the bane of business, economists and rating agencies.\u00a0Indeed,\u00a0political\u00a0wrangling over the debt ceiling\u00a0helped drive\u00a0S&amp;P\u2019s\u00a02011\u00a0U.S. sovereign debt\u00a0downgrade.<\/p>\n<p>And sadly, every debt-ceiling debate inevitably\u00a0devolves into the same Kabuki theater of\u00a0hypocrisy and demagoguery, with\u00a0the previous actors simply\u00a0reversing roles.\u00a0Whichever party\u00a0occupies the White House\u00a0wants to raise\u00a0the\u00a0ceiling to avoid economic dislocation on their watch; the\u00a0Capitol Hill\u00a0opposition\u00a0always\u00a0seeks\u00a0to score political points\u00a0around the perils of unconstrained spending or\u00a0another\u00a0topic\u00a0du jour.\u00a0<\/p>\n<p>When I was the\u00a0debt-ceiling\u00a0point person at the\u00a0George W. Bush\u00a0Treasury,\u00a0both\u00a0Sens. Obama (D-Ill.) and Biden\u00a0(D-Del.) were consistent \u201cno\u201d votes, with\u00a0the former righteously\u00a0<a rel=\"noreferrer noopener\" href=\"https:\/\/www.snopes.com\/fact-check\/ceiling-whacks\/\" target=\"_blank\">saying<\/a>, \u201cAmerica has a debt problem and a failure of leadership,\u201d suggesting he was willing to put the country in default. As\u00a0president, Obama\u00a0was\u00a0<a rel=\"noreferrer noopener\" href=\"https:\/\/obamawhitehouse.archives.gov\/blog\/2011\/07\/25\/president-obama-deficit-reduction-requires-tackling-entitlements-and-tax-reform\" target=\"_blank\">more practical<\/a>: \u201cWe have to [pass] it by\u00a0next Tuesday\u00a0or we won\u2019t be able to pay all our bills.\u201d He later\u00a0<a rel=\"noreferrer noopener\" href=\"https:\/\/www.politifact.com\/factchecks\/2011\/jun\/14\/michele-bachmann\/bachmann-said-obama-voted-against-debt-limit-when-\/\" target=\"_blank\">came clean<\/a>, admitting his position was \u201ca political vote.\u201d<\/p>\n<p>Then-Sen.\u00a0Biden\u2019s 2006\u00a0<a rel=\"noreferrer noopener\" href=\"https:\/\/www.congress.gov\/congressional-record\/volume-152\/issue-34\/senate-section\/article\/S2236-1\" target=\"_blank\">position<\/a>\u00a0against raising the ceiling?\u00a0\u201cI refuse to be associated with the policies that brought us to this point.\u201d Today, President Biden appears eager to embrace \u201cthe policies that have brought us to this point\u201d\u00a0with\u00a0$31 trillion\u00a0in\u00a0national red ink, now\u00a0<a rel=\"noreferrer noopener\" href=\"https:\/\/www.whitehouse.gov\/briefing-room\/speeches-remarks\/2022\/10\/21\/remarks-by-president-biden-on-historic-deficit-reduction\/\" target=\"_blank\">lecturing<\/a>\u00a0that it would be \u201cirresponsible\u201d to eliminate the debt ceiling.<\/p>\n<p>I predict that GOP\u2019s\u00a0hypocrisy\u00a0may\u00a0now\u00a0actually\u00a0exceed Democrats\u2019.\u00a0Sen. Ted Cruz (R-Texas)\u00a0<a rel=\"noreferrer noopener\" href=\"https:\/\/www.cnn.com\/2014\/02\/12\/politics\/senate-debt-ceiling\/index.html\" target=\"_blank\">filibustered<\/a>\u00a0a debt-ceiling\u00a0hike\u00a0during the Obama administration, only to become a\u00a0<a rel=\"noreferrer noopener\" href=\"https:\/\/www.texastribune.org\/2021\/10\/08\/ted-cruz-john-cornyn-debt-ceiling\/\" target=\"_blank\">reliable yes vote<\/a>\u00a0for\u00a0President Trump.\u00a0Expect d\u00e9j\u00e0 vu all over again\u00a0as\u00a0Republicans back-flip\u00a0once more, especially\u00a0as\u00a0House Speaker\u00a0Kevin\u00a0McCarthy (R-Calif.) must\u00a0prove his spending chops after\u00a0his 15-ballot selection\u00a0debacle.<\/p>\n<p>One fundamental reality: History suggests the law really has no teeth.\u00a0Since the late 1950s, sitting presidents\u2019 debt-ceiling\u00a0success record is <a href=\"https:\/\/home.treasury.gov\/policy-issues\/financial-markets-financial-institutions-and-fiscal-service\/debt-limit\" target=\"_blank\" rel=\"noreferrer noopener\">100 percen<\/a>t because\u00a0no\u00a0politician\u00a0will\u00a0dare\u00a0take\u00a0the career-ending step of touching the third rail of default. In 2006,\u00a0as\u00a0Senate Leader Harry Reid (D-Nev.) and his fellow Democrats took\u00a0to\u00a0the Senate\u00a0floor keelhauling\u00a0President\u00a0Bush\u00a0over spending, his\u00a0staff\u00a0was frantically\u00a0calling\u00a0my office to ensure we\u00a0weren\u2019t\u00a0out of time to\u00a0lift the ceiling and\u00a0avoid\u00a0default. It\u00a0provided\u00a0us\u00a0a good laugh.\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr2_ab\">\n<\/aside>\n<p>Prepare for similar chuckles from McCarthy and Republicans, who are girding for a fight with spending restraint\u00a0their stated goal. While they can\u2019t say it publicly, they understand well that their leverage with the administration lies not in the\u00a0empty\u00a0threat\u00a0of\u00a0forcing\u00a0default,\u00a0but in\u00a0the opportunity for an open\u00a0and very public\u00a0conversation, where they will highlight Biden\u2019s role in recent record spending.\u00a0Their risk is that they\u00a0push too hard\u00a0and look foolish by\u00a0fomenting\u00a0panic only to beat a hasty retreat.<\/p>\n<aside class=\"thehill-promo-link\">\n\t\t<a href=\"https:\/\/thehill.com\/opinion\/finance\/3832308-the-ftcs-proposed-ban-on-noncompete-agreements-matches-what-voters-want\/\" class=\"thehill-promo-link__link\" target=\"_blank\" rel=\"noopener\"><br \/>\n\t\tThe FTC\u2019s proposed ban on noncompete agreements matches what voters want\t<\/a><br \/>\n\t\t<a href=\"https:\/\/thehill.com\/opinion\/criminal-justice\/3833781-explanations-for-mass-shootings-are-obscured-by-history\/\" class=\"thehill-promo-link__link\" target=\"_blank\" rel=\"noopener\"><br \/>\n\t\tExplanations for mass shootings are obscured by history\t<\/a><br \/>\n\t<\/aside>\n<p>Amid protests of pending\u00a0economic Armageddon,\u00a0the Biden\u00a0team\u2019s real calculus\u00a0in considering concessions to team McCarthy will not be their fear of default but instead how much damage his presidency can withstand from the\u00a0daily reminders over the next six months of\u00a0the spending bonanza of last two years,\u00a0and its resulting historic inflation.\u00a0With\u00a02024\u00a0right around the corner, the stakes are high.\u00a0<\/p>\n<p>For all its flaws\u00a0and despite all the preening and posturing, the\u00a0debt ceiling two-step\u00a0forces\u00a0an all-too-rare\u00a0debate on the\u00a0nation\u2019s balance sheet\u00a0that forces all of\u00a0Washington\u00a0to engage and, importantly,\u00a0the media\u00a0to cover it. Given that no president since Bill\u00a0Clinton\u00a0has avoided deficits resulting in record debt, political posturing and brinksmanship seem an acceptable price to pay for the value of\u00a0occasionally\u00a0reminding\u00a0America\u00a0of the perils of fiscal profligacy.<\/p>\n<aside class=\"ad-unit ad-unit--mr3_ab\">\n<\/aside>\n<p><em>Emil\u00a0Henry, formerly assistant\u00a0secretary of the Treasury, is CEO of private equity firm Tiger Infrastructure Partners.<\/em><\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/news.google.com\/__i\/rss\/rd\/articles\/CBMiTGh0dHBzOi8vdGhlaGlsbC5jb20vb3Bpbmlvbi9maW5hbmNlLzM4MzM4NTUtdGhlLWRlYnQtY2VpbGluZ3Mtc2lsdmVyLWxpbmluZy_SAVBodHRwczovL3RoZWhpbGwuY29tL29waW5pb24vZmluYW5jZS8zODMzODU1LXRoZS1kZWJ0LWNlaWxpbmdzLXNpbHZlci1saW5pbmcvYW1wLw?oc=5\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What\u2019s worse than the\u00a0perennial and often brief Washington\u00a0game of chicken\u00a0over raising the debt ceiling\u00a0with the constant threat of defaults\u00a0compromising\u00a0the\u00a0\u201cfull faith and credit of the United States,\u201d\u00a0economists fretting,\u00a0markets swooning and\u00a0the\u00a0media\u00a0glued to the skirmish? The six-month debt ceiling tussle we are about to endure: The U.S. Treasury recently pushed the button on time-tested \u201cextraordinary measures,\u201d which will &hellip;<\/p>\n","protected":false},"author":1,"featured_media":47919,"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\/47918"}],"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=47918"}],"version-history":[{"count":0,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/47918\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media\/47919"}],"wp:attachment":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media?parent=47918"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/categories?post=47918"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/tags?post=47918"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}