Mitch McConnell Helps Democrats Avoid a Global Economic Meltdown—And Plans to Use That Against Them
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Senate Majority Leader Mitch McConnell in October made it as clear as he could: he would help his Democratic colleagues keep the government’s credit card out of the shredder for nine more weeks, but come mid-December, they’d have to handle the sequel alone—and own it come next year when voters weigh-in with the midterms.
Well, eight weeks later, McConnell is keeping his word—in a strictly technical manner of speaking. No Republican is expected to vote for an increase to the nation’s borrowing power. ButMcConnell, along with his Democratic colleague Chuck Schumer, devised a clever backdoor for the purchase of another barrel red ink to allow U.S. bookkeepers and keep track of the debt. McConnell will still make Democrats follow what he considers a political plank. But, Republicans will be willing to help and hang the dive board above the S.S. Debt Infference.
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If all of this seems like something only procedural nerds understand, you’re right. For anyone who has an investment account, a retirement plan, or income from the government, such as a pension, paycheck or Social Security, it matters. The national AmEx is expected to hit its critical level on Dec. 15 and the Treasury Department is warning if Congress doesn’t boost its credit limit, there is all but guaranteed to be a massive global economic crisis. A single estimate projects that 6 million American jobs will be gone and that the wealth of $15 trillion will plummet. Wall Street, as well as foreign markets, don’t want the United States to be seen deadbeat borrower. China is the global economic leader.
America has never defaulted on any of its debts. The United States has never defaulted on its debt, even in the most difficult and savagely-political standoffs about the debt ceiling. The total has been raised a total of 78 more times since 1960. Although government shutdowns are costly and unpleasant, the consequences of default can be devastating. McConnell understands that. McConnell also understands politics.
McConnell and Schumer have been in private talks for weeks. Schumer has led negotiations on the debt ceiling. (House Democrats expect to remain united with their eight-vote majority. Speaker Nancy Pelosi was. MoreSchumer will be handling the McConnell talks. The McConnell-Schumer relationship is not meant to be misunderstood as being warm. However, leaders recognized the danger of failure to agree on a deal. McConnell opted to not let his deputy partners get involved in the plan, and instead kept his counsel close by, telling only his top lieutenants about the compromise during a contentious lunch Tuesday.
McConnell was open to his wishes, but also had some demands. One time, negotiators considered tying the debt-limit vote to the must pass defense bill. However, the deadline was too short for this vehicle to be viable. McConnell also would have prefered Democrats use a budget loophole of reconciliation—the trick Democrats are trying to use to pass President Joe Biden’s social spending bill—to pass a stand-alone hike, but that was a non-starter for Democrats who have already used it the extraordinary tool once before this year to pass the Democrats’ first pandemic-relief bill, the American Rescue Plan. McConnell also knew that this trick had only been used four times before in Senate history. The most recent use was in 1997.
Democrats instead suggested a temporary exception that would pass the debt limit with only a majority vote and avoid the 60 votes threshold required to stop a speechifying filibuster. This loophole, which would be closed next month, would prohibit amendments to the debt ceiling. Republicans could allow Democrats to take the political hits and leave it at that.
So here’s what’s actually going to happen, assuming McConnell can rustle up the 10 Republicans to go along with his scheme as expected:
The House approved Tuesday’s standing bill to reverse the Medicare cutbacks that had been scheduled to go into effect Jan. 1. Retired Rep. Adam Kinzinger from Illinois was the only Republican to back it. Absent Congress’ actions, the American Hospital Association warns that looming automatic cuts would mean a $54 billion hole in their budgets right as the pandemic hits another wave. Congress, as it’s done routinely, will merely wipe the scorecard clean when it comes to previous laws meant to reduce spending. It’s a good idea to pay for Medicare as Congress does, but it isn’t something that lawmakers have to actually do.
House members added to this Medicare bill a rule change that allowed a single permission slip for legislators to increase the debt limit with the Senate’s bare majority. It requires Congress to name a specific number—and not a blank check to carry through a specific date—for the new borrowing power. Democrats seek a number that will carry them beyond the midterm election, likely in the $2.5 trillion to $30 Trillion range.
Now, that work is headed to the Senate where the change can be approved by lawmakers. Although Senators may be upset that the House does not have any control over its rules, this was an expected part of the compromise since historically the House is the place where debt ceiling legislation begins. McConnell isn’t one to gamble with a headcount, so the fact he announced the deal presumes he has the votes in the Senate despite the grumbles over an encroaching House.
From there, the Senate will sketch out language that can clear 50 Democrats’ support and the vote of Vice President Kamala Harris to break the tie before sending it back to the House, where it faces a certain approval. The Senate debate will now be limited to 10 minutes, as opposed to the usual open-ended discussion that could result in a filibuster.
Not all Republicans are happy with McConnell’s deal. Some expressed their dissatisfaction at McConnell’s deal during a luncheon. Others were laughing at McConnell’s caving and openly grumbling about the matter to reporters who stood outside. To listen to Fox News the last two days—especially the primetime line-up—you’d have thought McConnell had taken Ronald Reagan’s name off D.C.’s airport and replaced it with Hillary Clinton’s. McConnell’s choice was also challenged by Donald Trump.
McConnell, the longest-serving Republican Leader in history, isn’t one to be flustered by such pushback. For his part, McConnell calmly explains that he’s giving Democrats total ownership over the new borrowing number, a figure he’s expected to use widely as he charts a path back to the majority in a 50-50 Senate. Polling already shows Republicans in a strong position to retake the majority, with echoes of Barack Obama’s first midterms in 2010 and Bill Clinton’s in 1994.
Voters since World War II have been primed to punish the party in control of Washington two years into a new President’s term. Except when outside forces intervene, which is most notablely Sept. 11 2001. However, a global economic crisis could prove to be another possibility. McConnell wants to avoid anything he can to change the trends of history and instead keep the focus on Democrats’ spending.
“The red line is intact,” McConnell told reports on Tuesday at the Capitol, referring to his October demand that only Democratic votes would increase the borrowing limit. “The red line is that you have a simple majority, party-line vote on the debt ceiling. That’s exactly where we will end up.”
McConnell kept his promise to his colleagues, and made it easier for Democrats to walk into his trap of being the party that borrows, even if it’s borrowing to cover spending racked up Republicans’ watch. A $2 trillion-plus jump to the national AmEx is both responsible and potentially politically toxic if Republicans can convince voters that the almost $8 trillion in debt racked up during Trump’s four years didn’t matter.
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