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Revisiting the debt ceiling off-ramps

Can the Biden administration just ignore the debt ceiling?
Revisiting the debt ceiling off-ramps

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Revisiting the debt ceiling off-ramps

Back in January, when the debt ceiling crisis was just beginning to take shape, I outlined the various off-ramps that had been proposed to avoid a default without Congress actually voting to raise or suspend the debt ceiling.

At the time, I concluded that all of these potential escape routes were unlikely. They remain unlikely — but two of them have returned to the conversation, courtesy of a pair of New York Times articles yesterday. Let’s take a look:

1. Discharge petition

It is almost impossible for a bill — say, a “clean” debt ceiling bill that raises the country’s borrowing limit without any strings attached — to reach the House floor without Speaker Kevin McCarthy’s sign-off.

I say “almost” because of discharge petitions, a little-used tool that can force a House vote on a piece of legislation without the speaker’s approval, as long as 218 members of the chamber (a simple majority) are on board.

The main problem I identified with the discharge petition route back in January was that it takes a lot of time: according to House rules, to be discharged to the floor via petition, a bill must sit in committee for 30 legislative days, then in the Rules Committee for seven legislative days, and then collect all 218 signatures it needs. (Remember: these are legislative days, which only count when Congress is in session, which it rarely is.)

As far as we could tell at the time, Democrats had ruled out this option because of the cumbersome process, which has not been used successfully since 2015. But, the Times’ Carl Hulse reported yesterday, Democrats have actually been secretly preparing to use this option all along.

Under the radar, Rep. Mark DeSaulnier (D-CA) filed the Breaking the Gridlock Act in January, and had it referred to 20 different committees. That means Democrats, without anyone noticing, have already passed the first hurdle for a discharge petition (the 30-day committee waiting period) because this bill has been bottled up in committee since January.

As written, DeSaulnier’s bill does not say anything about the debt ceiling, but the idea is that it could be used as a “shell”: Democrats could get the 218 signatures they need to send it to the floor, then amend it to become a “clean” debt ceiling increase.

This is an interesting piece of procedural trickery: if Republicans had known this was Democrats’ plan for the bill, or even if it had been introduced by a higher-profile member, the GOP might have taken stops to block it from committee consideration. However, even if Democrats managed to get the bill this far, there are still two problems that stand in the way of this off-ramp:

— It still takes a lot of time. Democrats might have shaved off 30 days from the discharge petition process, but — because Congress is only in session so often — it would still likely take until mid-June for DeSaulnier’s bill to reach the floor. According to Treasury Secretary Janet Yellen, the country is headed for default as soon as June 1, so there might not be enough time for this route to save us.

— It doesn’t have 218 backers. The biggest problem, though, is that a discharge petition must be supported by a majority of the House, and Democrats don’t have 218 members on board. They would only need five Republicans to join them in the effort, but none of the GOP lawmakers you might expect to support the move have done so.

McCarthy has done an impressive job keeping his moderates in the fold, while Democrats have only alienated Republican centrists with their refusal to negotiate. “That’s not how it works in a divided government,” Rep. Don Bacon (R-NE) told Axios. “We have to govern, which means we have to find some agreement, which means we must negotiate.”

Bacon, one of 18 Republicans who represents a district won by Biden, is the type of Republican who would need to support a discharge petition for it to go through. The fact that he is opposed tells you everything you need to know about how likely it is that this route will be successful.

2. The 14th Amendment

The other off-ramp Democrats floated in the pages of the New York Times yesterday is another one that I mentioned back in January: simply declaring the debt ceiling unconstitutional via the 14th Amendment, and continuing on issuing debt and performing government services as usual without any congressional action.

Wait, you might be thinking, wasn’t the 14th Amendment about giving citizenship and equal rights to former slaves after the Civil War? Yes, mostly!

But Section 4 of the Amendment actually addresses the national debt:

“Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.”

At the time, this provision was added because of fears that former Confederates would join Congress and a) refuse to pay the Union’s debts from the Civil War and b) try to get the U.S. to pay the Confederacy’s debt intead. Thus, the declarations about the “validity of the public debt of the United States” not being questioned and the prohibition on paying debt “incurred in aid of insurrection or rebellion.”

Section 4 of the 14th Amendment has come up in conversations about the debt ceiling before, with some scholars suggesting that the debt ceiling questions the validity of the public debt and is therefore unconstitutional. But administrations — including Bill Clinton’s, Barack Obama’s, and, in 2021, Joe Biden’s — that have considered the idea in the past have dismissed it.

Still, according to the Times’ Jim Tankersley, the Biden administration is taking a second look at the 14th Amendment option.

“Top economic and legal officials at the White House, the Treasury Department and the Justice Department have made [the 14th Amendment theory] a subject of intense and unresolved debate in recent months,” Tankersley reported.

It is unclear whether President Biden, a proud institutionalist, would support the move, especially considering the mixed opinions from scholars about whether it is legal. As Tankersley noted, it would likely come with economic consequences of its own, spooking markets and investors because government debt would be on shaky legal ground.

Where does that leave us?

“Back where we started,” I wrote in January after asking that same question. And that’s still largely the case.

It is interesting to learn that the White House is reconsidering the 14th Amendment option, but it is still hard to imagine Biden taking the step at this point. If we really do default on the debt and enter into a crisis scenario, perhaps that will change.

For now, though, a negotiated deal remains the likeliest way out of the debt ceiling impasse. More specifically, a short-term debt ceiling increase has begun to gain momentum in Washington. Such a punt would have two main advantages: it would buy lawmakers more time when they sorely need it, and it would allow the debt ceiling and budget processes to synch up.

Democrats have refused to accept spending cuts in exchange for raising the debt ceiling, but, as Josh Barro recently noted, spending cuts will be inevitable eventually, since Republicans control one-half of Congress and both chambers will have to agree on a spending plan to avoid a government shutdown.

If the debt ceiling is raised until October 1, when the current federal budget expires, the two processes can be paired together. Republicans can get their spending cuts as part of the budget negotiations; Democrats can say they didn’t give up anything for the debt ceiling.

It is unclear if House Republicans, many of whom have insisted on concessions now, not during the budget process, will accept this compromise. It is possible some sweeteners would need to be included (perhaps permitting reform) so McCarthy can say the short-term increase isn’t completely a “clean” bill.

But I was interested by the number of Republicans who expressed openness to a short-term increase, including more conservative senators like Rick Scott (R-FL) and Kevin Cramer (R-ND). For now, though, leaders on both sides have rejected the idea, too dug in to their maximalist positions (cutting $3.5 trillion vs. cutting nothing).

It remains to be seen when — or if — these positions might shift and the two parties might start hammering out a compromise. By the time the “Big Four” congressional leaders convene at the White House on May 9, a default could be only three weeks away.

In other news...

AROUND THE WORLD: Russia claims that it downed two Ukrainian drones last night aimed at Vladimir Putin’s residence in the Kremlin. Putin was not in the Kremlin at the time and was unharmed. Ukraine denies any role in the alleged attempted assasination.

AT THE BORDER: The Biden administration plans to send 1,500 active-duty U.S. troops to the southern border in the coming days, Fox News first reported. The troops would serve in an administrative, not law enforcement, capacity to help respond to the surge of migrants that is expected after Title 42 ends on May 11. Some Democratic lawmakers immediately condemned the move, which Sen. Bob Menendez (D-NJ) called “unacceptable.”

DEBATE OVER DEBATES: Former president Donald Trump is likely to skip at least one of the first two 2024 Republican presidential primary debates, according to the New York Times. Per the Washington Post, Trump tried to persuade Republican National Committee chair Ronna McDaniel to cancel the debates entirely, but she refused. The first GOP debate is set to take place in August in Milwaukee. (“It’s too early,” Trump has reportedly groused, the Post reported.)

ON THE TRAIL: Democratic Rep. Collin Allred launched a campaign against Texas Sen. Ted Cruz this morning... Election denier and failed 2022 secretary of state candidate Jim Marchant joined the Nevada Senate race... AOC won’t run against Democratic Sen. Kirsten Gillibrand... But Republican rising star Lee Zeldin might.

IN THE STATES: Oregon’s Democratic secretary of state resigned amid revelations about her lucrative side gig with a cannabis company... Florida Gov. Ron DeSantis signed a bill barring state and local officials from making decisions based on environmental, social or governance (ESG) goals.

Today in government...

White House: President Biden and Vice President Harris will have lunch together. Normally, that would not be notable; presidents and VPs have shared weekly lunches since Carter and Mondale. But, after their first few sessions reportedly lacked intimacy, Biden-Harris lunches have been a relatively rare event, despite his initial promise to hold them weekly.

Are the duo reviving the weekly tradition as they prepare to seek a second term? Biden and Harris are lunching today for the second week in a row, the first time they have done so back-to-back since January. The lunches come as the Biden campaign is reportedly trying to center Harris in the 2024 campaign, attempting to rehab her image as Republican candidates use her as a punching bag.

Also: Biden will host a dinner for top military commanders... Harris will participate in an event marking Asian American, Native Hawaiian, and Pacific Islander Heritage Month... The first lady will visit the Bronx Children’s Museum in New York with Justice Sonia Sotomayor.

Congress: The Senate will vote on confirmation of two district court judges and on passage of two resolutions:

  • A House-passed resolution to reverse the Biden administration’s two-year pause on U.S. tariffs on solar panels imported from Cambodia, Malaysia, Thailand, and Vietnam. (Biden’s Commerce Department has found that China tried to skirt tariffs by moving its solar products through these four countries, but paused tariffs on them anyways in order to encourage U.S. solar energy usage.)
  • A resolution to overturn a Biden administration rule adding Northern lesser prairie-chicken to the list of threatened species and Southern lesser prairie-chicken to the list of endangered species.

The House is on recess.

Federal Reserve: Fed chair Jerome Powell will hold a press conference to announce whether the central bank has decided to raise interest rates for a 10th time since March 2022. The Fed is expected to approve one more quarter-point increase before pausing its campaign to combat inflation by hiking interest rates.

Before I go...

Here’s a story I enjoyed: For decades, “Jeopardy!” superfans have searched for Barbara Lowe, a contestant who appeared on the show in the 1980s but whose episodes mysteriously disappeared.

They’ve never been re-aired; Lowe was not invited back to the show’s “Tournament of Champions” later that year. Rumors spread that she and Alex Trebek had a falling-out.

Until late last year, when a slew of old VHS tapes materialized and solved the mystery — puncturing some of the myths that had grown up around Lowe in the process. I don’t have any particular attachment to “Jeopardy!”, but I found this piece to be a fascinating dive into a specific Internet subculture and a great story about a case that went cold and then got solved. Read here via The Ringer...

The Curious Case of the Lost ‘Jeopardy!’ Episodes and the Mysterious Champion at Their Center
In 1986, Barbara Lowe Vollick won five games of ‘Jeopardy!’ in a row. Her episodes were then taken out of circulation. What followed was a nearly 40-year hunt for the missing tapes—and a quest to find out what really happened.

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