Revelation

Jared Bernstein:

While waiting to go on Larry Kudlow’s show tonight I heard Sen Mitch McConnell say something to the effect of “there will never be another clean debt ceiling. From now on, it will be a dollar in spending cuts for every dollar the debt ceiling is raised.” [I’ll link to the clip when CNBC posts it.]

Totally predictable, of course, but think about this for a sec. He’s essentially saying the following:

“We in Congress cannot be counted upon to come up with budgets that pay for the spending we authorize. Therefore, we will have to borrow to make up the difference. But if that borrowing hits the cap, we will not raise the cap to cover the borrowing we signed off on, unless we get the spending cuts we want.”

To understand how nonsensical Sen McConnell’s position is, you have to appreciate that Congress knows when they pass their budget whether it will breach the debt ceiling or not, just like you know when you order your lunch whether you’ll be able to pay for it. He’s saying, I’m going to keep ordering lunches I can’t pay for and when the cashier hands me the check, I’ll hand it right back and tell her it’s her problem.

The budget process is the time to square the ledger. Or not—there will be budgets, especially in recession, that add to the deficit and breach the ceiling. In such cases, Congress must borrow to make up the difference, and sometimes that will mean raising the ceiling.

But Sen McConnell would rather budget by threatening default. I’m certain that is not the way of great nations.

3 thoughts on “Revelation

  1. in a sane world, the new zeitgeist of “deficits are the worst problem facing the country” would doom the chances of the bush tax cuts from ever being extended again.

    alas, once again i am struck by the fact that we do not live in a sane world.

  2. It makes absolute perfect sense from McConnell’s point of view: never any new taxes,and in fact tax cuts. Military spending always at current or increased levels. A hard, never increased debt ceiling to force more and more cuts in domestic spending and eliminating any hope of ever paying back the Social Security Trust Fund. This is how you kill the “welfare state”.

    There is no secret about this. It has been their open and explicit plan since 1980, and they have openly executed it, step by step up often with the connivance of Democrats who bought into the tax cuts. The only piece that they has not been able to get into place was the never increasing debt ceiling, and they finally have that now.

    They win because they have an ideology and a plan, and the discipline to execute it. This is why they beat the pants off the liberals. Of course their motivation is to make more money for themselves and their sponsors which makes it easier for them to stay firm.

    They have made no secret about this, and are proud of it. I have no idea why anyone has been taken by surprise. They are already starting on a second round, agitating for eliminating any possibility of cutting defense spending. They will succeed, and any further cuts made by the Committee of Oligarchs will be entirely be out of domestic spending.

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