Senate Passes $2.5 Trillion Debt Limit Increase

Senate Passes $2.5 Trillion Debt Limit Increase

By Yuval Rosenberg and Michael Rainey
Tuesday, December 14, 2021
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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