Biden’s War on the Debt Limit – How Democratic Leaders Should Think about it? The Case of the Feds and the United States

If Democrats don’t take this obvious step the Biden administration should be prepared to use legal strategies to get around the debt limit. There are a number of ways the administration could exploit loopholes, like producing trillion-dollar platinum coins and issuing bonds with no maturities and no face value.

And that’s a best-case scenario. As I mentioned before, the G.O.P. is more radical than it was a decade ago, and it might be less interested in blowing up the world economy when a Democratic president is in charge.

Why wouldn’t raising the debt limit blow up the economy? U.S. debt is the ultimate safe asset, easy to convert into cash, and there are no good alternatives. If investors lose confidence that the U.S. government will honor its obligations, the resulting financial storm will make the recent chaos in Britain look like a passing shower.

Raising the debt ceiling high enough will allow the federal government to borrow until after the next presidential election. But there is no reason to preserve the debt ceiling as a problem for future Congresses. Democrats can end this dangerous game by passing the legislation to eliminate the debt ceiling that has been introduced by Senator Michael Bennet of Colorado. There is no reason for Congress to approve any more spending that has already been approved.

The Obama administration was unwilling to go any of these routes, largely, I think, because it believed that they would look gimmicky and undignified, and it preferred to seek compromise. But surely Democrats don’t need to worry about dignity when the other party is ruled by Donald Trump. They are facing opponents who are both radical but also anti-democracy; no real compromise is possible.

Sen. Burr: Reforms to the debt limit of the U.S. Congress, and other congressional leaders are concerned about the possibility of restoring the 2020 election

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Election deniers, however, remain a potent force on the right: More than 220 candidates who questioned the 2020 election have won state or federal office, and about 30 of those have said the election was stolen or rigged.

State officials need to know that their votes must follow the laws in place on Election Day, according to the proposed reforms. They may not change the result even though they don’t like it. Critically, the new bills also steer disputes over vote tallies to the courts, where judges — not partisan officials — have the final say.

They should act before the end of this legislative session to ensure that the federal government can borrow the money it needs to meet its obligations over the next two years — including recent and important increases in federal funding for expanding the production of renewable energy; for investing in roads, high-speed internet, unleaded pipes and other infrastructure; and supporting local government, including money for law enforcement. Congress agreed to those measures after months of negotiation and compromise, and Democrats should do everything they can to defend the achievement.

The Treasury Department is projected to hit its borrowing limit next year, though it is unclear exactly when the agency will run out of so-called extraordinary measures to ensure payments continue for a few months.

The economists of Goldman Sachs warned in their analysis this week that raising the debt limit would be difficult and that it would be the closest the United States had come to economic tumult since that standoff. Less than a quarter of Republicans and less than a third of Democrats who will be in the House in 2023 were there in 2011.

“If I were going to continue here, I would hope they would do it now,” said Senator Richard M. Burr of North Carolina, one of several Republicans retiring at the end of the year, in an interview. We all know that the presidential races start on February 1st, so you are already campaigning for that position, and I don’t want either side to use the debt ceiling to make a political point.

Democratic lawmakers considered using the fast-track budget reconciliation process to raise the debt limit, in order to make it more difficult for Republicans to block it. The leaders of the party argue that the vote should be bipartisan.