Senate Passes $2.5 Trillion Debt Limit Increase

By Yuval Rosenberg

A good Tuesday evening to you!
Congress keeps crossing items off its year-end to-do list, as
lawmakers are set to both raise the debt ceiling and send a $768
billion defense policy bill
to President Biden’s desk.

Here’s the latest:

Senate Passes $2.5 Trillion Debt Limit Hike, House Set to
Follow

Democrats are set to raise the federal government’s $28.9
trillion debt limit by $2.5 trillion, enough to avoid any further
standoff over the nation’s borrowing cap until after the 2022
midterm elections and into 2023.

The Senate approved the increase Tuesday afternoon in a 50-49
party-line vote, with all Democrats backing the measure and
Republicans opposed. GOP Senator Cynthia Lummis of Wyoming
reportedly is sick and did not vote, eliminating the need for Vice
President Kamala Harris to cast a tiebreaking vote.

The bill now heads to the House of Representatives, where it is
expected to pass in another party-line vote, sending it to
President Biden’s desk.

The $2.5 trillion increase is the largest ever in dollar terms,
according to
Roll Call, but smaller in percentage terms than
increases passed in 2010 and 2011.

The legislation was cleared by the Senate using a one-time,
fast-track process agreed to under a bipartisan deal last week. It
covers debt accumulated by both parties and staves off a potential
default just ahead of the deadline set by Treasury Secretary Janet
Yellen, who had told lawmakers that the government might exhaust
its ability to pay its bills by Wednesday.

"No brinksmanship, no default on the debt, no risk of another
recession: responsible governing has won on this exceedingly
important issue," Senate Majority Leader Chuck Schumer said on the
Senate floor Tuesday morning. "The American people can breathe easy
and rest assured there will not be a default."

Schumer thanked Senate Minority Leader Mitch McConnell (R-KY)
and other Republicans for working with Democrats to address the
issue and allow the one-time change to Senate rules. The bipartisan
agreement to expedite the process followed months of partisan
clashes, as Republicans insisted Democrats would have to raise the
debt limit on their own and pushed for them to do it using the
special budget reconciliation process being used for the Build Back
Better social spending and climate plan.

McConnell, in the end, agreed to a deal that drew some grumbling
from fellow Republicans — and a barrage of attacks from former
President Donald Trump. "He didn't have the guts to play the Debt
Ceiling card, which would have given the Republicans a complete
victory on virtually everything," Trump said in a statement
Sunday.

McConnell, though, insisted that he had achieved his political
aims by making Democrats raise the debt ceiling on their own and
forcing them to raise it by a specific amount rather than suspend
it for a period of time. Republicans had targeted that outcome as
they look to continue hammering Democrats over their spending —
which is precisely what McConnell did Tuesday.

"If they jam through another reckless taxing and spending spree,
this massive debt increase will just be the beginning," he said on
the Senate floor. "More printing and borrowing — to set up more
reckless spending to cause more inflation, to hurt working families
even more."

The bottom line: The months-long drama over raising the
debt limit is finally about to end, though the new debt limit could
create trouble for President Biden — and a major fiscal crisis — in
2023 if Republicans win back control of the House or Senate next
year.

The Washington Post’s Mike DeBonis
reports:

"Conservative lawmakers, anticipating the GOP retaking one or
both congressional majorities in next year’s midterm elections, are
already calling for and strategizing around a fiscal clash in 2023,
insisting on using the threat of federal default to place new curbs
on government spending and reduce the $28 trillion national
debt.
"What they are envisioning is, at a minimum, a return to the
brinkmanship seen the last time a Democratic president confronted a
new Republican majority, in 2011. It already threatens to become
the dominant domestic political clash ahead of the 2024
presidential election."

More Americans Skipping Medical Care Due to Cost: Study

Thirty percent of Americans say they avoided going to the doctor
for a health problem in the previous three months due to worries
about the cost, according to a
new survey from Gallup and West Health.

The study highlights growing worries about the cost and quality
of health care in the U.S. Fifty-two percent of respondents said
their most recent experience in the health care system wasn’t worth
what it cost, and 90% said they pay too much for what the services
they receive.

Worries about high costs are working their way up into
higher-income households, as well. Twenty percent of households
earning more than $120,000 per year reported that they avoided
seeking care due to cost concerns, with that proportion climbing
rapidly during the Covid-19 crisis.

"Regardless of race, gender or income, Americans are more
burdened by and worried about healthcare costs," the report says.
"While these issues are not necessarily new, the degree to which
they have been heightened or exacerbated by COVID-19 has reached an
all-time high since the beginning of the pandemic."

Rand Paul Catches Flak for Hypocrisy on Disaster Aid

Republican Sen. Rand Paul is catching flak for requesting
federal aid for his home state of Kentucky after the severe weather
that flattened towns and killed dozens of people this past weekend.
The combative libertarian has long opposed giving federal aid to
states that experience disasters like those caused by the tornadoes
that ripped through parts of the South and Midwest, arguing that
any funds provided by the government should be offset by cuts
elsewhere in the federal budget.

In 2013, for example, Paul voted against federal aid for states
in the Northeast struck by Hurricane Sandy. "I would have given
them nine billion and I would've taken the nine billion from
somewhere else," Paul said at the time. "I would have taken it from
foreign aid and said you know what, we don't have money for Egypt
or Pakistan this year because we have to help the Northeast."

Now, with his state facing hundreds of millions and perhaps
billions of dollars in damages, Paul has changed his tune, sending
a letter to the White House in support of Democratic Kentucky Gov.
Andy Beshear’s request for federal aid. While Paul asked for
"expeditious approval" of the request, he made no mention of
offsetting the cost through cuts elsewhere in the budget, nor did
he offer a discussion of the perils of using "someone else's money"
to provide aid, as he did when Congress was trying to assist Texas,
Louisiana, Florida and Puerto Rico after hurricanes in 2017.

Critics were quick to highlight Paul’s about-face. "One almost
feels guilty pointing out the hypocrisy of people like Paul,
because it's just so easy,"
says Michael Hiltzik of The Los Angeles Times,
adding that "Republican posturing against disaster aid ‘for thee,
but not for me’ is a hardy perennial on Capitol Hill."

In a
column Tuesday, liberal economist Paul Krugman
argues Paul’s hypocrisy runs deeper than flip-flopping on disaster
aid. Red states are often led by politicians who preach
self-reliance and austerity, but are in fact heavily subsidized by
wealthier states. According to data from the Rockefeller Institute,
Kentucky receives $14,000 per capita more in federal benefits than
it pays in taxes. "To put this in perspective, Kentucky’s 2019 net
inflow of federal funds — $63 billion — was roughly 30 percent of
the state’s G.D.P. that year," Krugman writes.

The problem, though, isn’t that Kentucky runs a deficit with
respect to federal payments. According to Krugman, the problem lies
in the political game some red state politicians play as they seek
to delegitimize government spending while happily accepting the
benefits:

"As a lower-income state, Kentucky receives the full benefit
of federal programs like Medicare, but pays relatively little in
income or payroll taxes, so it gets much more than it pays in. And
that is actually how the social safety net is supposed to work. We
want individuals who for whatever reason are hurting financially to
receive support from the more fortunate, which necessarily implies
large transfers from rich states like New Jersey to lower-income
states like Kentucky.
"What’s not OK is when states that are huge net beneficiaries
of progressive taxation and the social safety net preen and posture
about self-reliance and the evils of big government. It’s even
worse when they assert some kind of moral superiority over the
metropolitan areas that pay their bills."

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