A Short History
Once again (see United States debt-ceiling crisis 2011) Republicans are holding the national and global economy hostage in an attempt to claim the mantle of fiscal conservatism. The Republicans pushing this default are extortionists, including McMorris Rodgers. Don’t negotiate with extortionists—or they will be back for more.
The basic issue in the current debt ceiling standoff: Is the United States going to pay the debts it has already incurred or are we going to stiff our creditors and, by so doing, crash our national credit rating and credibility in the global economy?
We should not be here. Not keeping up with payments on the public debt is constitutionally prohibited. Section 4 of the 14th Amendment to the U.S. Constitution (adopted in 1868) states, “The validity of the public debt of the United States, authorized by law…shall not be questioned.”
As the Professor of U.S. History Heather Cox Richardson points out, the history of the adoption of Section 4 of the 14th Amendment suggests it was made to order for our current times. On the origins of Section 4 of the 14th Amendment:
Undermining the value of U.S. bonds [as was being proposed for the Union Civil War debt] was an attack not just on the value of investments, but on the nation itself. When Republican [not the Republican Party of today] lawmakers wrote the Fourteenth Amendment in 1866, they recognized that a refusal to meet the nation’s financial obligations would dismantle the government, and they defended the sanctity of the commitments the government had made. When voters ratified that amendment in 1868, they added to the Constitution, our fundamental law, the principle that the obligations of the country “shall not be questioned.”
Needing to raise the debt ceiling separate from negotiating over and passing a federal budget is usually dated to the Second Liberty Bond Act of 1917, but it’s a bit more complicated than that. Before WWI Congress typically passed specific bond issues to be offered by the U.S. Treasury in order to cover various incurred federal debts, especially war debts. Rather than discuss and vote over each bond issue, with the Second Liberty Bond Act of 1917 Congress set a ceiling for the amount of debt the Treasury could take on by selling bonds and then let the Treasury work out the details.
The debt ceiling votes that started with the Second Liberty Bond Act of 1917 have been used in Congress at various times as a vehicle to highlight and force discussion around the national debt, but using the debt ceiling to threaten catastrophic debt default to extract political concessions is a relatively new. (The one exception was a close call in 1953 during the Eisenhower administration. If you really want to get into those weeds click here.) In 1979 a parliamentary rule proposed by Rep. Dick Gephardt, a Democrat from Missouri (imagine that!), later dubbed the “Gephardt Rule”, was adopted. It deemed the debt ceiling to have been raised when the budget was passed. That worked as intended to avoid playing chicken with a debt default—the concern that Gephardt saw and wished to avoid.
But then, under the House Speakership of Newt Gingrich in 1995 during the Clinton administration, Republican majorities in the House and Senate scrapped the Gephardt Rule. That year Speaker Gingrich threatened to refuse to raise the debt limit and thereby cause a debt crisis. Newt was riding high on his Heritage Foundation-inspired “Contract with America” to reduce the size of government, cut taxes, and engage in tort “reform” and welfare “reform”. The ensuing battle over the budget (not, strictly speaking, the debt limit) resulted in two memorable federal government shutdowns. This hostage-taking of the economy, in the end, damaged Republicans more than Democrats.
The exclusively Republican tactic of holding the national (and international) economy hostage by refusing to raise the debt ceiling next arose in 2011 after the Tea Party takeover of Congress. This Republican-manufactured crisis ultimately avoided default but came so close that it resulted in a downgrade of the U.S. credit rating and an ongoing increase in borrowing costs.
In 2013 Republicans once again held the economy hostage, threatening to send the country into debt default unless their demand to defund the Affordable Care Act was met. Once again Republican approval ratings declined.
Now in May of 2023 Republicans are at it again, but with demands in their House-passed Limit, Save, Grow Act of 2023 (with McMorris Rodgers’ Yea vote) to defund every legislative achievement of the Biden administration and impose spending caps in exchange for a short term extension. Doug Muder captures it perfectly:
The American people don’t really understand where government spending goes, so they support spending cuts in the abstract, while rejecting any specific list of significant cuts.
The two parties maneuver around that phenomenon: Republicans support vague spending “caps” that don’t specifically cut anything in particular, while Democrats try to pin them down. Do they want to cut defense? Veterans benefits? Health care? Education? No, of course not. They just want to cut “spending”.
It is time to put a stop to this irresponsible hostage taking, invoke Section 4 of the 14th Amendment, and pay the country’s bills. As Heather Cox Richardson points out, this round Republican hostage taking over the debt limit is already damaging our national security. The Republican Party is rapidly becoming an irresponsible terrorist organization.
Keep to the high ground,
Jerry
P.S. There is one more thing that often gets left out of the discussion of this Republican-manufactured debt default crisis. Thanks to the trickle-down economics orthodoxy of the Republican Party since the Reagan administration (1980 onward), not only do Republicans refuse to consider raising taxes on the wealthy and on corporations in order to reduce the national debt, but they actively work to further lower those taxes (see Tax Cuts and Jobs Act of 2017) and swell the national debt even more. After most wars this country has fought, taxes were used to help re-balance the budget and reduce the accumulation of debt. But not under Republican orthodoxy after George W. Bush’s second Iraq War. No. Bush went ahead with additional tax cuts pushing up the debt even further.
Along those same lines, does anyone remember W’s exhortation to “go shopping!” rather than calling for sacrifice to support the economy after 9/11 and in the lead-up to the Second Iraq War? Just another manifestation of warped Republican trickle-down advocacy.