Thursday, January 19, 2023

It Matters that the Debt Ceiling "Debate" is Being Left to Poseurs

by Neil H. Buchanan

References to "Groundhog Day" cannot possibly do justice to the absurdity of the ever-returning debt ceiling madness, but I have not come up with anything better.  Maybe "the 'Groundhog Day' of 'Groundhog Day'"?  No, probably not.  In any event, having recently recovered from another bout of Covid-19, I have had more than enough of repetitive traumas.  But here we are, beginning yet another iteration of debt ceiling inanity.

There has been a flurry of public discussion about the debt ceiling in the last couple of weeks, for two related reasons.  First, what we can now accurately call the "hostage-takers' caucus" -- also known as virtually the entire Republican Party -- announced loudly and clearly that they are planning to use their new House majority to threaten to force a US government default unless their demands are met.  It does not matter how slim their majority is, or how often pundits and journalists pretend that there are "moderates" among House Republicans, because everyone on the right is all in on this murder-suicide pact.

Second, today is the day that the federal government hits the official debt ceiling.  Or maybe that was yesterday, not that it matters.  This has led to the usual resurgence in media requests for me to go on TV or the radio and explain yet again what all of this means and does not mean.  This week, however, I am having none of it.  Even though this is an insane situation with which I will surely have to engage, what is happening right now is utterly unimportant.  The current chatter means nothing.

We are months away from the drop-dead date on which the Treasury Department will have exhausted its "extraordinary measures," and as always, the availability of those extraordinary measures makes the technicality of reaching the debt ceiling a non-event.  And by the way, those measures are a constant reminder that the entire notion of the debt ceiling is beyond silly.  (Side note: the Dorf on Law column found at the hot link in the previous sentence is from nine years ago.  "Groundhog Day" indeed.)

Clearly, I am in a grumpy mood -- about everything, I suppose, but especially about the debt ceiling.  Stipulating that I will surely re-engage with the actual arguments about the debt ceiling soon enough (far too soon, really), I will go meta in today's column, not debating but instead talking about the debate -- where the word debate most definitely deserves the scare quotes that I used in the title of this column.

My question of the day is this: Given that all political discussions are dominated by poseurs, charlatans, cranks, and even outright idiots, is it worse to have an irrational debate about the debt ceiling than it is to have the usual run of irrational debates about climate, taxes, critical race theory, cancel culture (which never existed and never will), foreign policy, public health, insurrection, or anything else?

As that (very incomplete) list of public policy and political topics amply demonstrates, we have plenty of experience dealing with the consequences of idiots being in charge -- both of the government and at various levels of our media outlets.  Even so, the debt ceiling has always brought out the worst in everyone.  Not only have the Republicans refused to let go of their fatefully horrible decision in 2011 to threaten Armageddon for partisan gain, but almost no one seems to have a grasp of any part of it.  (Contrast this with the relatively impressive recent refusal of a large section of the punditocracy to bothsides the Trump vs. Biden documents cases.)

We can start with a basic problem: an alarming number of people continue to conflate government shutdowns with possible debt defaults.  One of the Republican holdouts during Kevin McCarthy's ritual abasement two weeks ago announced that his fellow Republicans must agree to "shut down the government rather than raise the debt ceiling," saying that "[t]hat’s a non-negotiable item."  This particular Republican, Ralph Norman of South Carolina, clearly has no idea what he is talking about.

Happily, the article from which I drew those quotes includes this: "A reporter asked Norman if he meant default on the debt, as the debt ceiling and a government shutdown are not directly linked."  Somebody understands!  Unhappily, Rep. Norman responded with this: "That’s why you need to be planning now what agencies — what path you’re gonna take now to trim government. Tell the programs you’re going to get to this number."  But that is not even mildly responsive to the question, because he is talking there about neither shutdowns nor the debt ceiling but simply about governing.

That is, if Republicans want "to trim government" when they control the House and its committees, they are fully within their rights to try to pass legislation cutting or eliminating programs "to get to this number."  It is what happens then -- when the Senate and the White House offer different priorities than the House Republican will offer -- that matters.  Norman jumps back and forth between seeming to say three things — "We should try to pass legislation that reflects our priorities (and presumably then drive a hard bargain)," "We'll shut down the government again if we don't get our way," and "We'll kill the global economy by forcing a first-ever default." — and he clearly has no clue that these are not the same.

Indeed, his word salad might also suggest that he has heard someone talking about "prioritization," where Republicans think they can tell the White House whom to stiff when the drop-dead date arrives.  They have even been politically stupid enough to float horribly unpopular ideas -- less than a week ago -- about who should be paid and who should be forced to do without.

As an aside, note also that there is no reason to believe that Norman and his compatriots would ever take yes for an answer.  When he says that Republicans should "[t]ell the programs you’re going to get to this number," he is describing two things that will never happen.  Other than "government spending is bad," what are Republicans in fact saying about the government?  Setting aside the evergreen "waste, fraud, and abuse" and the teensy-weensy line item of "foreign aid," what are Republicans actually willing to cut?  In addition, "this number" has never been articulated, and it never will be.  If President Biden agreed to cut the overall budget by a catastrophic 10 percent across the board, then what?  Republicans would ask for 30 percent.  And then 60.  If Biden agreed to move all of Social Security, Medicare, and Medicaid spending onto the "discretionary" budget, what would Republicans do?  Cut all of it?  They do not even have an opening bid, much less a squeal point.

Again, however, the problem is not only that the Republicans' House leaders are now in the pocket of their craziest members, nor does it matter that when it comes to the debt ceiling, there is a 222-way tie for the title of "craziest member."  The larger problem is that the entire public discussion outside of the Republican Party is being carried out by people who often seem not to have learned anything from the last twelve years of repeated debt ceiling near-misses.  And again, this problem is not limited to Republican politicians.  Reporters are in on it as well.

There are some notable exceptions, of course, such as the reporter who called out Rep. Norman about his conflation of shutdowns and defaults, quoted above.  But there are still many, many supposedly neutral or even openly liberal reporters who make the same mistake that Norman did.  Partly, this is because of the problem that I have discussed on Dorf on Law many times, which is reporters' lack of any particularized knowledge.  Their professional ethic, indeed, seems to revel in the idea that a good reporter can understand anything simply by thinking about it for a day or so, quoting an expert (or ideally two who disagree with each other), and then drawing whatever conclusions they like.

Not all of the errors are catastrophic, but they do expose the fact that too many reporters, editors, and headline writers -- even/especially at top-flight media outlets -- cannot be bothered to think things through with real care.  A New York Times piece from earlier this week, for example, saw two generalist news reporters writing that Treasury "could prioritize payments," an assertion that is prominently amplified in the caption of the photo at the top of the piece: "The Treasury Department could prioritize payments if it cannot afford to pay all its bills."

Yet the reporters themselves immediately follow up their confident claim that prioritization is possible with this: "But prioritization could prove tricky both logistically and politically. The systems used to send out payments are not finely calibrated enough for the government to quickly and surgically adjust who receives checks, [former Treasury Secretary Jack] Lew said."  So prioritization is possible, except that their own expert says that the system is "not finely calibrated enough" to do it.  That is beyond "tricky."  A triple Axel followed by a Salchow is tricky.  Ice dancing upside down on imaginary skates is impossible.

Or consider this oft-favored metaphor: "When Congress came perilously close to barreling through the debt limit in 2013 ... "  That was included in a Washington Post article -- again, not an op-ed -- two weeks ago.  But neither the President nor Congress could "barrel through" the debt ceiling, because the essence of a debt ceiling crisis is that it is a dramatic event that happens for undramatic reasons.  Life is supposed to continue as it normally does.  Treasury has bills to pay every day, and on days when its incoming revenues are insufficient to cover everything, it floats new securities to borrow money.  The problem is not that we suddenly build up a head of steam and burst through an otherwise impenetrable barrier.  It is that we are doing nothing at all like that, but a completely unnecessary statute can cause utterly unremarkable behavior to destroy everything.

Why does that difference matter?  The "barreling through" language feeds into the idea that the problem is that Congress is suddenly doing too much of something -- too much spending, of course.  Supposedly, Congress has us barreling toward disaster because it tried to do to much, when in fact it was simply doing what it is supposed to do: determining what the government will do to help people, funding it through taxes and borrowing as necessary, and then paying people the money that the law guarantees them, in full and on time.

Yet this kind of panicky framing never seems to go out of style.  I recall a radio appearance by Professor Dorf on NPR's Boston station during the first go-round on the debt ceiling, where the (clearly quite liberal) host kept saying: "But surely, Professor Dorf, Obama can't just blow past the debt ceiling."  "Blow past"?  That is emphatically not what would be happening, but it apparently sounds somehow more important than: "Republicans refuse to pay the nation's bills, some of which come due every day."  Better to describe the spending as reckless, I suppose, than to point out Republicans' willingness to concoct a completely avoidable default.

Beyond the errors large and small that show up in news reports, there is also the unending supply of poseurs who think that being an opinionated journalist qualifies them to say anything they want.  I have a love-hate relationship with the left-leaning magazine The New Republic, and one of their major problems is that they rely on people with liberal priors who appear to be trying to be clever all the time.  Sometimes they farm it out, such as this recent piece in which an activist labor lawyer breezily argued that "the Biden administration should be in a friendly federal court seeking a declaratory judgment that the Debt Limit Statute cannot limit the obligation of the United States to continue borrowing to prevent a gratuitous default on its debt."  And that was part of a column that actually got most everything else right about the debt ceiling!

What can one say about TNR then running a piece in which a pundit advocates "minting the trillion-dollar platinum coin" and immediately offers this snark: "I know what a lot of dull-witted pundits are going to say about this proposal: You can’t just mint a magic coin, it’s a total gimmick, this is crazy talk"?  Yes, it is just a bunch of dull-witted punditry to point out that the gimmick is simply not necessary, even on its own terms, if one were to bother to think about how the Treasury and the Federal Reserve would have to interact.

And now TNR has its reporter who specializes in covering environmental issues penning an explainer on the debt ceiling that includes this whopper: "While American debt has ballooned to almost comic levels in recent years, leveraging the debt ceiling in exchange for spending cuts has not historically resulted in fiscal restraint; the last time Congress actually lowered the debt ceiling was in the mid-twentieth century."  This is from a liberal magazine!  Where does this author think the money to pay for environmental remediation will come from?

Debt has not "ballooned to almost comic levels," but when you have someone who has apparently never had to think about why debt is good, you get that kind of silliness.  And that reporter even gets a basic fact wrong: "Unless the limit is lifted through legislative action, the Treasury Department will not be able to borrow any more money to cover spending already approved by Congress."  No, that is not true -- or at least, it is not obviously so -- because the debt ceiling statute would be in conflict with the spending and taxing statutes.  But because it is easier to to say that "this law says you can't do it," we never see even a glimpse of an analysis of what is truly at stake.

And to be clear, writers who repeat that framing are agreeing with Republicans regarding prioritization -- with different priorities, perhaps, but with no disagreement at all about whether the Treasury would be required to refuse to pay some legally required obligations.

As I noted at the beginning of this column, there is no shortage of issues about which politicians and the media know next to nothing but act as if they have it all figured out.  Many of those issues have extremely high stakes.  Yet for the first time, we are likely to hit the drop-dead date on the debt ceiling while non-Republicans stand around in a complete fog about what is happening -- even as they are only too happy to share their ignorance with others.  What happened to the old saying about quietly being thought the fool rather than opening one's mouth and removing all doubt?

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