Dem
51
GOP
49
Yesterday, Joe Biden told reporters that he believes he has the authority to use the Fourteenth Amendment to ignore the debt ceiling if it comes to that. However, he also acknowledged that there could be court challenges to it. Actually, it is 100% certain that there would be court challenges, although a key issue in any challenge is the issue of standing to sue. To get over the first hurdle, whoever filed the suit would have to convince a judge (or maybe the Supreme Court) that he, she, or it (if we're talking the House of Representatives, a corporation, or other non-human-and-yet-somehow-still-human entity), was harmed by Biden's use of the Fourteenth Amendment. Depending where the case is filed, there could also be issues of which court has the authority to even hear the case. A filing in D.C. probably wouldn't be challenged on jurisdictional grounds, but one filed in North Texas might be.
Yesterday's remarks were the strongest yet by Biden on the debt ceiling. So far, little progress has been made on raising it because Speaker Kevin McCarthy (R-CA) wants to use the negotiations over it to ram through massive changes to the federal budget and Biden is not willing to even consider them because the debt ceiling is about paying for things Congress has already approved, not for future spending. The two are unrelated.
The ongoing talks have broken down as the deadline looms ever closer. The problem is so acute that Biden has decided to cut short his foreign trip and not visit Australia as planned in order to come back to continue discussions with McCarthy in person, rather than leaving that to OMB Director Shalanda Young and top aide Steve Ricchetti.
Despite arguing that setting next year's budget has nothing to do with paying last year's bills, Biden is offering to talk about the budget. However, there are many points where the two sides are far apart. For example, Biden wants to keep military spending flat. McCarthy wants to raise it and apply draconian cuts to other spending. Each side has labeled the other's position as "unacceptable." Another hot issue is the Democrats' desire to undo some of the $3.5 trillion in tax cuts for the wealthy that the Republicans passed in 2017. The Republicans have ruled this out completely.
Yesterday, McCarthy went on Fox News and said: "The difficulty is nothing's agreed to at all." In other words, "the other side hasn't offered to pay up so we may have to kill the hostage after all." Meanwhile, Treasury Secretary Janet Yellen went on NBC's Meet the Press to explain that if the debt ceiling isn't raised, the U.S. could run out of money by June 1 and wouldn't be able to pay all its bills. She said hard choices would be needed but didn't make any threats. If she had said: "We're considering stopping Social Security payments in states that voted for Trump in 2020 because Republicans don't think Social Security is a good idea," she probably would have gotten McCarthy's undivided attention, but she didn't.
Rep. Jodey Arrington (R-TX), chairman of the House Budget Committee, went on ABC's This Week to flatly rule out any tax increases as part of a deal. The Republicans' position is "My way or the highway." On the same program, Sen. Chris Van Hollen (D-MD) said that the way out is to advance a discharge petition to force a vote on the House floor on a clean bill to raise the debt ceiling and nothing else. This would require five Republicans to defect from the party line and support it in order to get to 218 votes.
In short, there is a lot of posturing and not much movement. One especially contentious area is the $80 billion that IRS got in the infrastructure bill last year. Republicans want to slash it, even though doing so would reduce tax revenues in the future by making it easier for millionaires and billionaires to get away with cheating on their taxes. This issue is top priority with their donors. Democrats don't have the slightest interest in doing this. Will the hostage get shot? Nobody actually knows and there isn't much time left.
As we have noted before, one way out that is absolutely legal is for the Treasury to mint one or more trillion-dollar platinum coins and deposit them in the Fed's bank account. Yellen hasn't even brought up the subject, which strikes us as poor negotiating. By merely bringing up the topic, she would be warning McCarthy that if there is no deal, she could do this and all his leverage will instantly vanish. Then he might be willing to accept half or a third of what he wants instead of nothing. If she were really smart, she could say that she was considering putting Donald Trump on the front the coins, thus getting him to chime in saying that minting the coins would be a fantastic solution. That would be checkmate for McCarthy. (V)