With Manchin in the Lead on the Debt Ceiling, What Could Possibly Go Wrong?
by Neil H. Buchanan
Now that the first wave of uninformed press coverage about the debt ceiling has run its course, superseded by things like the Turkey/Syria earthquake and Republicans heckling the State of the Union speech, the real work will begin. That is, even though we reached the nominal debt limit a few weeks ago, we have some unknown number of months (most likely until June or July) before the drop-dead date on which Republicans might shoot the hostage and push the US into a constitutional crisis. Four or five months is not a long time, and it will involve ebbs and flows of news as real discussions take place that will determine our collective fate.
Professor Dorf pointed out a few days ago that the Biden Administration seems to be trying to "win the politics" of the debt ceiling by priming the public to blame Republicans if everything goes to hell. I completely agree with his forceful retort:
If Biden thinks that he has painted McCarthy into a corner where McCarthy will have to concede lest the unpopularity of the GOP position be exposed, he hasn't been paying attention.
For God's sake, AFTER A MOB INSPIRED BY A DEFEATED REPUBLICAN PRESIDENT TRIED TO VIOLENTLY OVERTHROW THE U.S. GOVERNMENT, A MAJORITY OF HOUSE REPUBLICANS VOTED TO END DEMOCRACY IN AMERICA. What price did they pay? They won back the House by a smaller margin than expected, but meanwhile, the few patriotic House Republicans willing to stand up to the madness lost their seats. And Joe Biden thinks Republicans will be embarrassed by the fact that they haven't specified what budget items they want to cut? Or that they won't simply lie about it?
As Professor Dorf went on to point out, Biden might be trying to negotiate with hostage-takers while denying that he is doing so. In any case, it is surprisingly not Biden's inherently cautious centrism that underpins his thinking on this. As I noted here recently, even the genuine left-liberal thinker Bob Kuttner has enthusiastically embraced the idea that Biden should affirmatively harm vulnerable people (like Social Security recipients), because that would allow Biden to point the finger at Republicans.
That means that even some of the people who should be aggressively telling Biden that he needs to pay all the government's bills when the time comes, even if that means issuing debt that Congress has not authorized, are instead mired in wishful thinking about harnessing harm to real people to their side's political advantage.
But an even larger part of the problem is that Biden's supposedly cautious strategy (which is in fact quite risky) requires following the conventional rules of politics. If he is going to win the politics, he is going to have to play politics. And who else is on this playing field? None other than the barely-Democratic senator from West Virginia, Joe Manchin. When I first saw reports indicating that he will play a major role in negotiations (although, again, Biden claims that he is not willing to negotiate), my heart sank. On the other hand, Manchin would have been a stumbling block no matter what, so I guess it does not matter that he is in the mix now.
Or does it? Two days ago, The Washington Post ran an op-ed under Manchin's byline. The piece was not so much terrible as comically confused, showing a lack of understanding that will make his presence in these we-swear-they're-not-negotiations talks especially problematic. Although he stumbled his way toward something that almost sounded like a reasonable position for a fiscal hawk (and while I am definitely not a fan of budgetary orthodoxy, at this point any argument from conservatives that is not utterly daft is a welcome change of pace), his presence will almost certainly make matters worse.
We can start with the headline: "Joe Manchin: Stop the political blame game and start cutting the debt." Taken literally, those words would mean that Manchin wants to start running annual surpluses, which is the only way to reduce debt. Is that what he meant? Headlines are generally not written by columnists, so maybe that is not in fact what he meant. Let us withhold judgment.
Things get off to a bad start, however, when Manchin asserts in his second sentence that "one would presume that leaders of both parties would
seek out compromise to avert an unnecessary, entirely avoidable
financial crisis and act soon to raise the debt ceiling." So, we are going to compromise between one side (the White House and the rest of the Democratic Party) saying that we should pay the nation's obligations in full and on time, while the other side says that we can stiff some people while giving higher priority to others? Compromise!
As is true of far too many politicians and pundits, Manchin simply cannot stick with one topic, conflating complaints about the debt ceiling with discussion of the debt, which (for the zillionth time) is not at all the same thing. Manchin:
Instead, we are again witnessing a dangerous game of unnecessary brinkmanship that puts our global credit rating at risk and could cost American families and businesses much more if our leaders fail.
So this is about the debt ceiling? Unfortunately, no. Manchin:
How serious a crisis could we face if we continue to ignore our nation’s debt? Consider the words of the then-chairman of the Joint Chiefs of Staff, Adm. Mike Mullen, who was asked in February 2011 about the greatest threat facing our nation when he appeared before the Senate Armed Services Committee. Without skipping a beat, Mullen said it was our national debt. Those words are truer now than they were then.
So this is about total levels of debt? Apparently yes. Manchin:
Here are the facts: Our national debt was $14.1 trillion in February 2011. In the decade since, we have added nearly another $20 trillion to that total with bipartisan enthusiasm. That’s over $94,000 for every American.
Never in the history of our nation have we so quickly amassed so much debt. Several presidents and both parties played a role in getting us here. While I am proud that the Inflation Reduction Act last year directed $300 billion to deficit reduction — the largest down payment in decades — we must do more.
All right, so here is Manchin, as usual, using all of the context-free numbers that debt scolds love to use. His totals are for gross debt, not net debt. He does not talk about how the US compares to other rich countries. He suggests that somehow "every American" is individually responsible for $94,000 in debt. Most importantly, he ignores why the debt went up in the last three years -- an unprecedented crisis known as the Covid-19 pandemic, which required extreme measures to keep the country going until it could recover as much as it has today.
Just when it seems clear where Manchin is going, however, he goes back to conflating the debt ceiling and the debt. Manchin:
Democrats and Republicans seem to want to blame each other rather than come to grips with the reality that we must raise the debt limit and rein in the out-of-control spending that threatens Social Security, Medicare and our national defense.
Although this is confused, at least it is not drivel. Indeed, it requires only a mildly charitable reading of Manchin's words to think that he might be saying two separate things: (1) the debt ceiling must be increased to prevent a disaster; and (2) anti-government hawks like Manchin should propose ways to make it unnecessary for the debt ceiling to be increased in the future, by cutting future spending. The problem is that he connects (1) and (2), when they have absolutely nothing to do with each other.
The best reading of the op-ed is that it mentions the debt ceiling merely as a pretext for Manchin and his fellow fiscal slash-and-burn types to stop the government from doing things that they hate (but the public likes). He seems to say that it is bad that this other spending "threatens" Social Security, Medicare, and the Pentagon, although he does not in fact say that he is against cutting the first two of those three items. (As a card-carrying fiscal conservative hypocrite from a red state, he of course would never touch the military.)
I am against cutting Social Security or Medicare, but did Manchin say the same? Or did he merely say that other spending is out of control and then head-feint toward the idea that those popular programs ought to be protected, leaving open the possibility that they might have to be cut unless he gets his way on everything else?
Upon issuing a predictable call for "a bipartisan budget agreement that puts our country on a better path," Manchin does make one undeniably accurate point, which is that it is simply wasteful to fail to pass annual budgets on time, as Congress has been doing in recent years. He writes that "by passing the annual appropriations bills on time, we would save billions we currently waste year after year by relying on continuing resolutions to fund government operations." He offers not even a guess, however, as to how many billions are wasted in this way. Is this another "waste, fraud, and abuse" dodge, arguing that we could reach fiscal nirvana by knocking fractions of a percent off of a few items? At the very least, I can report that I have seen no estimates (even from the usual suspects) saying that this particular form of waste adds up to anything meaningful.
Where would the real cuts come from -- the ones that would stop the supposed madness? Manchin:
Capping the annual growth of discretionary spending at 1 percent for the next 10 years would save more than $1 trillion. We can do this without threatening essential programs such as Medicare and Social Security or cutting defense spending at a time when we are grappling with the largest-scale land war in Europe since World War II and an emboldened China that blatantly violates our airspace and dominates global supply chains.
This at least sees Manchin a bit more firmly seeming to oppose cuts in Medicare or Social Security. It is not rock-solid (because, for example, many fiscal conservatives do not admit that increasing the retirement age would be a cut in benefits), but it is a move in the right direction.
More to the point, however, this is his big plan to control out-of-control government spending? Official forecasts for the next ten years (from last May) show that the US economy will generate approximately $312 trillion of GDP in that time while adding $15.7 trillion to the national debt, increasing it to a total of $47.1 trillion (the current $31.4 trillion plus the next decade's new net borrowing). Manchin's forecast, even if it plays out as he suggests, would reduce gross debt (one more time: gross debt is not meaningful!) in 2032 from $47.1 trillion to $46.1 trillion -- or less than one-third of one percent of the GDP for that ten-year period and 2.5 percent of 2032's GDP alone.
Also, he tells us absolutely nothing about who will lose the benefit of the one trillion dollars that he proposes to leave out of discretionary spending. Medical research? Early childhood nutrition? Funding for low-income housing, to prevent homelessness and crime? No, it is just an arbitrary cap, without any consideration of the consequences.
If this seems like small-ball, it is, and Manchin seems to know it. Manchin:
These are just a few ideas, and no doubt there are others that might prove more viable — if we choose to simply pause and listen to each other.
Fortunately, history shows that progress is possible and that divided government can produce results. Between 1985 and 1997, Congress enacted multiple, mostly bipartisan, reforms that led to a balanced budget in 1998 for the first time in decades.
It will not be easy, but now is the time for President Biden and our congressional leaders to come together and have an honest, open and public discussion about what we can and must do in the best interest of our nation. Failure is not an option.
The late-1990's balanced budgets were almost entirely caused by the dot-com bubble, but who notices such things? Manchin seems to be saying that, although he cannot come up with anything that is more than rounding error, "history shows" that people who "pause and listen to each other" can get it done. Color me underwhelmed.
Because I have quoted almost the entirety of the piece, I cannot deprive readers of his last two, eye-roll-inducing paragraphs. Manchin:
Regardless of our party affiliation, we all have a responsibility to rise above the politics of the moment — especially during times like these. And when it comes to an issue as serious as the national debt, I am guided by the words of my grandfather, who liked to say, “Unmanaged debt will lead you to make cowardly decisions.”
Those words stuck with me as I grew older, got married, started a family, built my own small business and went into public service. As governor of West Virginia, I held weekly budget meetings to ensure our government was living within its means, just like every family around every kitchen table across America. With our debt now standing at $31.4 trillion, we as elected leaders must have the courage to work together and act. Because, make no mistake, the American people will bear the ultimate consequences of our inaction if we allow politics to rule the day.
Ah yes, the family-around-every-kitchen-table trope, hot on the heels of the state-governments-must-balance-their-budgets dodge. The federal government is different from a family, full stop. And governors (or former governors) who brag about balancing budgets ignore that states borrow for capital spending even when they "balance" the rest of their budgets.
In the end, where does this leave us? Manchin's understanding of federal budgeting is as superficial as ever. He talks the hawkish talk about ending fiscal madness but has no idea how to do it, and he (wisely) does not want to attack Social Security and Medicare … I hope. But, he says, we must "rise above the politics of the moment." Good idea.
This is one of the people who is telling us that Biden must compromise with Republicans on the debt ceiling because he thinks the debt is too high. It is to his credit that he explicitly says that the debt ceiling must be increased, but he can barely keep his mind on that subject for a few seconds at a time before going back to conflating the debt ceiling and the debt.
And again, this is the guy who will be central to talks about how to avoid a crisis. Are you scared yet?