Debt Limit: Democrat Manchin Says Thumbs Down
Policy + Politics

Debt Limit: Democrat Manchin Says Thumbs Down

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Freshman Democratic Sen. Joe Manchin of West Virginia, a maverick former governor, is giving members of his own party fits with his vow to vote against lifting the federal debt ceiling later this spring unless Congress does something radical to curb spending.

Manchin isn’t deterred by admonishments from Federal Reserve Chairman Ben Bernanke, who said failing to raise the debt ceiling and the resulting default on U.S. government bonds would be “catastrophic,” or Treasury Secretary Tim Geithner, who said default would result in “a financial crisis potentially more severe than the crisis from which we are only now starting to recover.”

Nor is Manchin swayed by the fact that the party who holds the White House – his party – generally has to persuade its own members to grit their teeth and do the “responsible” thing and raise the limit.

“You think I’m going to change? Let’s just find out,” Manchin told The Fiscal Times before ducking into the Senate chamber.

The answer was vintage Manchin, who when he was governor used the state’s line-item veto to strip funding from many social programs. In 2009, he cut $7 million in discretionary funds from an $11.5 billion budget, including $5 million for a technology program for public schools, which upset school officials and his fellow state Democrats.

Obama was one of 44 Democratic senators who
voted against raising the debt ceiling in 2006.

Now, Manchin is in a position to tip the balance of power in the Senate when it votes on raising the debt ceiling, now $14.29 trillion. With just 51 Democrats (and two independents who usually vote with them) in the Senate, Democrats will need almost all of them to offset the 47 Republicans likely to vote the other way.

Ironically, Obama was one of 44 Democratic senators who voted against raising the debt ceiling in 2006, something he now “regrets,” according to his press secretary, Jay Carney. The limit was raised by a vote of 52-48, and Obama’s spokesmen have said he voted against it because he knew it would pass anyway.

This year, the Treasury Department estimates that the limit on the public debt could be hit as early as May 16 and definitely by July 8, even if they use extraordinary measures to postpone the drop-dead date, such as delaying redemption dates on bonds and delaying reinvestment of government securities. Geithner, in a letter to Congress said a default would lead to “sharply higher interest rates and borrowing costs, declining home values and reduce retirement savings for Americans.”

Manchin, who won the seat of the late Sen. Robert Byrd, D-W.Va., a wily veteran who was known for steering billion in federal money to West Virginia, says he knows West Virginia gets a lot of federal money -- $2.82 for every $1 it pays in federal taxes, according to a 2009 estimate – much of which Byrd was personally responsible for . But he says that doesn’t mean he wants the government to keep on borrowing to fund things for his state or any other.

“West Virginians are responsible people, we’ll make adjustments,” he said. “In West Virginia … we live within our means. We have balanced budget amendments. The people back home, if they have to make adjustments, they make adjustments.

“I’ve never been to a place where they put a budget together based on how much they spend versus how much they have,” Manchin said.

The debt limit increase is not exactly like that, says William Hoagland, who, as a top aide to Senate Republican leaders for years, saw the debt limit raised by both Democrats and Republicans because they really had no other choice.

“Without judging his own personal and intellectual position on this, at the end of the day, the consequences of the federal government defaulting on its debt are monumental,” said Hoagland, now vice president of public policy at CIGNA. “It has never occurred in the history of this country. Yes, it’s a political vote, but the party in control of the Senate or the House at the end of the day has to do it. The horse is already out of the barn and you can’t bring it back in.”

West Virginia, like most states, was happy to accept federal stimulus money from the government two years ago, using it to close some of the gaps in the budget. Manchin did not, however, agree to take more money for an extension of unemployment insurance, because that would have required the state to spend more money to increase benefits.

Asked if he was willing to give up some of West Virginia’s federal money, he deflected that by saying that the federal government should set priorities. “They keep talking about going into default and all these things. $14.29 trillion is a pretty healthy sum, we ought to get our house in order.”

West Virginia University political science professor Neil Berch, characterized Manchin as a “deficit hawk” as governor. But Berch noted that there were few deficits during his tenure as governor because “the economy of the state was pretty good. He improved the fiscal standing of the state, by not spending in times he could have spent more,” putting money away “for a rainy day.”

Manchin was governor when Byrd died on June 28, 2010. He did not appoint himself to the seat, but named 36-year-old Carte Goodwin, his legal advisor, as a place holder until the election. On July 20, 2010, Manchin announced he would run for the Senate seat. He won in November, to fill out the unexpired term, but faces re-election in 2012.

Manchin, 63, attended West Virginia University on a football scholarship, but an injury ended his career. After graduation, he helped run some family businesses.

He served in the House of Delegates, the state Senate and as Secretary of State before winning the governorship, serving from 2005 to 2010. During the Sago Mine disaster in 2006, he evoked controversy when he appeared to say that 12 miners had survived the disaster, when only one actually had. He halted coal production in the state after that explosion and the separate deaths of two other miners.

Manchin also faced controversy after West Virginia University awarded an executive MBA degree to his daughter, Heather Bresch, in 2007, although she was shy of the required credits. The university eventually took back the degree. WVU president Michal Garrison, a Manchin family friend who had previously worked as a consultant for generic-drug manufacturer Mylan, where Bresch is an executive, resigned. Manchin said he had no knowledge of the circumstances.

The debt ceiling isn’t the first time that Manchin has taken positions that make his party uncomfortable. He is a fierce opponent of “cap and trade” legislation, often criticizes the new health care law and has hinted that he might not support President Barack Obama’s reelection bid.

During his close  2010 election race against Republican John Raese, he didn’t commit to endorsing Senate Majority Leader Harry Reid, D-Nevada, for that leadership post. But Manchin did eventually vote for Reid.

Democratic leaders have been reluctant to publicly take Manchin to task over the debt limit, fearing they might need to bargain with him later. But his fellow Democratic Senator from West Virginia, veteran Jay Rockefeller, has said he would vote for the debt ceiling increase “reluctantly.”

Rockefeller said he wouldn’t discuss Manchin’s position. Asked if raising the debt limit was particularly important to West Virginia since the state gets so much money from the federal government, Rockefeller shot back: “It’s particularly important to a country called America, which includes West Virginia.”

Related Links:
‘Gang of Six’ Presses Obama to Take Deficit Action (The Fiscal Times) 
Joe Manchin Debt Ceiling Vote to Buck Democrats, White House (Huffington Post) 
West Virginia Democrat Joe Manchin Goes Rogue (NPR)