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As Republicans demand major cuts that would cause incalculable damage to the lives of working Americans, Senate Democrats are urging President Biden to prepare to invoke the 14th Amendment to avoid a catastrophic debt default.
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A Minus And Plus For The Debt Ceiling Crisis
The debt ceiling discussions in Washington may well be help President Biden's secret domestic agenda but it is hampering on of his foreign policy aims.
The New York Times economy columnist Paul Krugman is aghast that the Biden administration had not prepared for the obvious showdown with the Republicans:
As soon as Republicans took control of the House last November, it was obvious that they would try to take the economy hostage by refusing to raise the federal debt limit. After all, that’s what they did in 2011 — and hard as it may be to believe, the Tea Party Republicans were sober and sane compared to the MAGA crew. So it was also obvious that the Biden administration needed a strategy to head off the looming crisis. More and more, however, it looks as if there never was a strategy beyond wishful thinking.
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[R]ight now I have a sick feeling about all of this. What were they thinking? How can they have been caught so off-guard by something that everyone who’s paying attention saw coming?
I am amused over this. Krugman seems to have believed Biden's election campaign talk about being 'progressive' or on the 'left'. Joe Biden was and is far from that. I for one would characterize him as a centrist with strong leanings towards the right.
The fight over the debt ceiling is arbitrary but a chance for Republicans to threaten some damage. The fear is then used to push for domestic policy concessions:
For those somehow new to this, the United States has a weird and dysfunctional system in which Congress enacts legislation that determines federal spending and revenue, but then, if this legislation leads to a budget deficit, must vote a second time to authorize borrowing to cover the deficit. If even one house of Congress refuses to raise the debt limit, the U.S. government will go into default, with possibly catastrophic financial and economic effects.
This weird aspect of budgeting allows a party that is sufficiently ruthless, sufficiently indifferent to the havoc it might wreak, to attempt to impose through extortion policies it would never be able to enact through the normal legislative process.
I do not for one moment believe that Biden is unhappy about that.
In the 1990s and early 2000s Biden supported bankruptcy reform that made it more difficult, especially for the poor, to get rid of debt:
[Biden] had pushed for two earlier bankruptcy reform bills in 2000 and 2001, both of which failed. But in 2005, BAPCPA made it through, successfully erecting all kinds of roadblocks for Americans struggling with debt, and doing so just before the financial crisis of 2008. Since BAPCPA passed, Chapter 13 filings went from representing just 24 percent of all bankruptcy filings per year to 39 percent in 2017.
Before that Biden had called for cuts to Social Security:
In 1984 he proposed freezing Social Security benefits — that is, ending cost-of-living adjustments that boost benefits to keep up with inflation. In January 1995 he gave a speech endorsing a balanced budget amendment (an utterly lunatic policy) and boasted about his previous record of proposing "that we freeze every single solitary program in the government, anything the government had to do with, every single solitary one, that we not spend a penny more, not even accounting for inflation, than we spent the year before." In November 1995 he did so again, boasting that "I tried with Senator Grassley back in the '80s to freeze all government spending, including Social Security, including everything."
There are other non-progressive laws and several wars that had Biden's support. In the current fight over the debt ceiling the Republicans demand cuts to several welfare bills. It is certainly not obvious that Biden is against those. He may well be using the debt ceiling fight to push for politics he favors but which a majority of Democrats would otherwise oppose.
Talks have been held in the White House with Senate and House majority and minority leaders. There were no serious results because the Democratic Senate majority leader Chuck Schumer held Biden back from making concessions to the Republican House speaker Kevin McCarthy:
The California Republican had vented to his colleagues just hours before the meeting that the current format of negotiations — with all four party leaders in a room with the president — wasn’t fruitful. Speaking to his conference on Tuesday morning, McCarthy said the five of them had achieved little in their first sitdown last week, arguing that Schumer had prevented Biden from fully engaging with the speaker and McConnell, according to two people familiar with his remarks. Whenever Biden did seem to agree with Republicans, McCarthy said Schumer would try to cut him off.
The talks will now continue without the Senate leadership:
Leaders agreed to narrow a bicameral negotiation down to Speaker Kevin McCarthy and Biden, hoping fewer players might be more productive in reaching a bipartisan deal to raise the debt ceiling. Even then, it looks like a longshot to some Senate Democrats.
That setting will give Biden the opportunity to make 'concessions' that are favored by his rich donors but opposed by a majority of people who voted for him. He will then sell those by presenting them as the only possible step to take. Maggie Thatcher's "There is no alternative!" will again succeed.
The current due date for a debt ceiling deal is Friday:
Reflecting the growing sense of urgency, the White House announced Tuesday that the president will cut short his trip to Asia and now plans return to Washington on Sunday in order to resume negotiations with Republicans as soon as possible.Biden will depart Wednesday for a trip to Japan but will no longer make stops in Papua New Guinea and Australia before returning stateside.
There is a G-7 meeting in Japan during which Biden will press for some anti-China wording but probably without much results. The canceled Quad meeting in Australia was also to support his anti-China agenda as was the planned stop in Papua New Guinea where the U.S. navy wants extensive port rights.
For Biden's foreign policy agenda the canceling of those dates is bad. It makes the leadership of the PNG look stupid:
PNG News & Info @PngPles - 2:08 UTC · May 17, 2023PNG declares Monday as Public Holiday in Port Moresby as US President Joe Biden makes historical visit
Link
The canceling of the visit may well be the end of the planned port agreement as the opposition in PNG will now have chance to look into the dubious and secretive deal:
The Opposition Leader, however, said the cancellation of the trip would give the opportunity for the Prime Minister to tell this country what this Defense Cooperation Treaty is all about.Mr. Lelang said information on the contents of the Defense Cooperation Treaty with the United States was sketchy, therefore, created a lot of confusion and uneasiness around the country as to what this means for us. The Opposition is calling on the Prime Minister to come out and tell the nation the details of the Defense Cooperation Treaty.
The Opposition Leader reminded the Government that we have a foreign policy of "Friends to All and Enemies to None” and PNG need to stand firm on this foreign policy position.
Mr. Lelang said we should not be blinded by the dollar sign or be coerced into signing deals that may be detrimental to us in the long run.
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Meanwhile, Former Prime Minister and Ialibu Pangia MP Peter O’Neil also expressed concern that the only people who seems to know about this security pact is the former Minister for Foreign Affairs, the PM and Minister for Defense.
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I am told there will be Security Agreement to be signed between US and PNG, however, that particular agreement was never made public, never debated on the floor of Parliament, never been approved by Parliament so we are all going blind and some of the reports we are getting are concerning”
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>From the information we gathered, the Agreement is that the pact was largely drafted by the US Government. Only a few of our own PNG Government officials and the then Minister for Foreign Affairs have seen this document and as a result has been put forward to the Prime Minister and officials to sign the agreement on the day of the visit of the US President," Mr O'Neil said.
This reminds one of the AUKUS deal which will see Australia pay huge amounts of money for nuclear submarines it does not need. That deal was also negotiated secretly and agreed upon without any public discussion.
If the Defense Cooperation Treaty with the PNG fails the chance for a conflict with China will lessen and the world will be better off. If some people in the U.S. will lose some government support due to a debt ceiling agreement it will be bad for them.
But in total that would still be a win.
Posted by b on May 17, 2023 at 16:12 UTC | Permalink
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