‘Fearmongering’ and ‘Cowardice’ on the Debt Limit

U.S. House Speaker Nancy Pelosi (D-CA) holds her weekly news conference at the U.S. Capitol in Washington
JAMES LAWLER DUGGAN
By Yuval Rosenberg

House Passes Short-Term Debt Ceiling Increase, Postponing
Potential Crisis to December

Any minute now, the House is set to approve a bill that
temporarily raises the debt ceiling, enabling the U.S. Treasury to
keep meeting U.S. obligations until at least early December.

The bill raises the debt ceiling by $480 billion. While some
analysts say the increase will extend the Treasury’s potential
default date to December 3, others think the fiscal cushion could
last longer. The research firm Wrightson ICAP on Tuesday estimated
that the increase will be enough to provide the Treasury with
sufficient resources “until some point between mid-December and
early January,” suggesting that Congress will have about two months
to defuse the next debt ceiling crisis, on either a short- or
long-term basis.

Lawmakers did not vote directly on the debt ceiling bill, which
the Senate passed last week. Instead, the House will “deem” the
bill to have passed as part of the debate over a package of
legislation that includes the PUMP for Nursing Mothers Act, the
Protect Older Job Applicants Act and the Family Violence Prevention
and Services Improvement Act.

Critics charged that Democrats did not vote directly on the bill
in order to avoid taking public responsibility for the increase.
Rep. Tom Cole (R-OK) said Democrats were playing “a game of smoke
and mirrors so they don’t have to be on the record about
substantive items.”

Time for new rules? House Budget Committee Chairman John
Yarmuth (D-KY) and Rep. Brendan Boyle (D-PA) introduced a bill two
weeks ago that would give the Treasury Secretary the authority to
raise the debt ceiling, and at a press conference Tuesday, House
Speaker Nancy Pelosi (D-CA) spoke approvingly of the proposal.

“That seems to have some appeal on both sides of the aisle,
because of the consequences to people of not lifting it,” Pelosi
said. “I think it has merit.”

In a press release when the proposal was released, Boyle said
the debt ceiling is no longer necessary or productive. “It’s quite
clear that this measure, which was first introduced in 1917, has
outlived its effectiveness,” he said. “Simply put, the debt ceiling
is incapable of accomplishing what it sets out to do—to control how
much the government borrows—as the bills Congress passes are
legally binding and cannot be inhibited by such a limit.”

The bill would require 60 votes in the Senate, however, and has
little chance of becoming law in the current Congress.

Editorial of the Day: ‘Fearmongering’ and ‘Cowardice’ on the
Debt Limit

The New York Times Editorial Board on Saturday excoriated both
Republicans and Democrats for playing with fire by repeatedly
engaging in debt ceiling brinkmanship — and for reaching a deal
last week that may only set up another round of risky political
maneuvering. Tuesday’s House vote may mean the issue is off the
front burner for now, but the Times — like many others — argues
forcefully that the debt ceiling serves no useful purpose:

“In 2019, the last time Congress played with fire before
finally raising the ceiling, this board
wrote that ‘anything short of eliminating the ceiling is
legislative malpractice at public expense.’ These past few weeks of
completely unnecessary brinkmanship have only served to strengthen
that judgment.
“Policymaking in the United States has been reduced to
grappling with whatever crisis looms largest. On questions of
public spending, as in other areas, like public health, the
nation’s leaders seem to have lost the ability to make the kinds of
decisions necessary to avert future crises. The deal reached this
week doesn’t resolve anything.”

On the GOP side:

“Senate Republicans are quite simply engaged in economic
sabotage. Under Democratic presidents, they routinely obstruct the
process of raising the debt ceiling for no apparent purpose other
than fearmongering.
“They also misrepresent the nature of the ceiling,
perhaps because it would otherwise be untenable to defend their
behavior.”

And the Democrats:

“Democrats, by contrast, are guilty of cowardice. They are
ready to raise the ceiling, but most are not willing to get rid of
it. … A few Senate Democrats have taken public stands, but not
enough to avoid a repeat of this sad circus when the United States
approaches the new debt ceiling in the coming months.
“One justification quietly expressed by Democrats is the
fear that if they voted to eliminate the debt ceiling, Republicans
would portray them as fiscally irresponsible. Yet to avoid that
risk, they are being fiscally irresponsible.”


Read the full editorial at The New York Times.

Record Revenues for Federal Government in 2021

As we told you last week, the Congressional Budget Office on
Friday estimated that the deficit for the 2021 fiscal year will
come to $2.8 trillion, the second largest annual deficit in
history. At the same time, federal revenues saw an 18% increase
from the year before, rising to $627 billion, for a total of more
than $4 trillion. According to
Politico’s Brian Faler, that increase is the
largest one-year jump going back 44 years, to 1977. And it’s the
first time revenues have topped $4 trillion.

Revenues “are just booming,” Mark Booth, a former CBO official,
told Politico. “It is very unusual.”

All types of taxes recorded increased receipts, with corporate
taxes seeing the biggest jump, 75%. Corporate taxes totaled an
estimated $370 billion — higher than where they stood before the
Republican tax cuts took effect in 2018 and the highest in nominal
terms since 2007, Faler notes.

Poll of the Day: Big Support for Drug Price Negotiation
Power

Most Americans say they want the government to have the power to
negotiate drug prices, according to a
new poll from the Kaiser Family Foundation. The
survey found that 83% of respondents favor “allowing the federal
government to negotiate with drug companies to get a lower price on
prescription drugs for people with Medicare and private insurance.”
The total includes 95% of Democrats, 82% of independents and 71% of
Republicans.

Most respondents were also skeptical about the pharmaceutical
industry’s claim that it needs large profits to fund research for
new drugs. A majority from all parties agreed that “even if U.S.
prices were lower, drug companies would still make enough money to
invest in the research needed to develop new drugs.”

House Budget Chair Yarmuth Says He Won’t Seek Re-Election

Rep. John Yarmuth, the Kentucky Democrat who chairs the House
Budget Committee,
announced Tuesday that he won’t seek re-election next
year.

The 73-year-old Yarmuth was first elected to the House in 2006.
He has played a major role in crafting Democrats’ coronavirus
relief legislation and the larger package of social and climate
programs currently being developed.

“While I have just become a lame duck, I intend to spend the
next 15 months working hard to build on my proudest moment, the
passage of the American Rescue Plan, which I authored and managed
through the Congress,” he
said.

In a statement, Pelosi praised Yarmuth as a “fierce and
extraordinarily effective champion” for Americans’ health and
financial security. “When Chairman Yarmuth retires at the end of
his term, the Congress will lose a greatly respected Member and our
Caucus will lose a friend whose wise counsel, expertise, humor and
warmth is cherished,” she said.

Yarmuth, the only Democrat in Kentucky’s congressional
delegation, represents a safely blue district that Politico

reports is likely to avoid redistricting: “The
retirement is especially notable because state Republicans in
Frankfurt have been open about their plans to keep his Louisville
district largely intact — rather than cracking it up to secure
another GOP district.”

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