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Don’t expect standoff over debt limit to end anytime soon

2011 timeline echoes through discussions between Biden and GOP

Speaker John Boehner shakes hands with President Barack Obama before Obama addressed a joint session of Congress on Sept. 8, 2011.
Speaker John Boehner shakes hands with President Barack Obama before Obama addressed a joint session of Congress on Sept. 8, 2011. (Kevin Lamarque/Reuters pool file photo)

Since the country is now focusing on former president Donald J. Trump’s indictment — and the possibility of more indictments to come — partisan finger-pointing about raising the debt ceiling has been put on the back burner.

But you can bet that the issue will once again draw headlines in the months ahead, even if it will have to compete with the question of what books first graders should be able to read.

While the indictment of a former president certainly is a big deal, the full faith and credit of the United States is an equally big deal — maybe even a bigger one.

The White House knows that Congress must raise the debt limit soon, but Republicans want to extract concessions from the Democrats before voting to do so.

According to a report written by the Swiss-based UBS’s Office of Public Policy, Treasury Secretary Janet Yellen will announce sometime after Tax Day (April 18) a new “X-date.”

“The X-date,” wrote UBS, “is the effective date when the government will run out of room to maneuver with extraordinary measures and can no longer meet all its obligations. The X-date will provide an operative deadline for negotiations, and no progress will be made other than further posturing until it is announced.”

Each side has already blamed the other for allegedly not negotiating in good faith. 

Republicans say it’s President Joe Biden’s intransigence that creates the risk of a financial meltdown. Democrats counter that it is the Republicans who are refusing to meet obligations already incurred when they oppose a “clean” debt ceiling increase.

How long will this fight go on, and when will the two parties get serious about negotiating with each other? Nobody knows for sure, but don’t count on a quick deal.

A CNN timeline of the 2011 debt ceiling crisis noted that President Barack Obama’s Treasury Secretary, Timothy Geithner, urged lawmakers in January “to act soon to increase the debt ceiling, warning that failure to do so would be disastrous for the economy.”

Geithner sent a second letter to Congress in early April, warning that Congress needed to raise the debt ceiling by May 16. If it didn’t, the Treasury would have to take “extraordinary” steps to avoid a default.

Congress didn’t, so in late June, the International Monetary Fund said the United States debt ceiling needed to be raised. Not surprisingly, nothing happened.

Then, in mid-July, two large rating agencies, Moody’s and Standard and Poor’s, raised questions about the United States’ bond rating. Their warnings finally caused a stir.

From January 2011 until the end of the first week of July, negotiations came and went, but the Republican-controlled House, the Democratic-controlled Senate and the Obama White House never got on the same page.

It wasn’t until July 31 that Obama was able to announce a deal. He signed the legislation on Aug. 2.

The reason for the deadlock in 2023 will be the same reason for the deadlock in 2011. As I’ve often observed, each party needs to demonstrate to its base that it is tougher, more principled, and more committed to its position than the opposition. A quick, early negotiated agreement to raise the debt ceiling would send a very different message.

Republicans, many of whom will not vote to raise the debt limit no matter what, will inevitably start whining about fiscal responsibility and balanced budgets when the subjects of deficits, debt, and spending roll around.

Of course, they seem uninterested with debt when they propose tax cuts for the affluent.   

As Washington Post columnist Allan Sloan and ProPublica reporter Cezary Podkul wrote in a January 2021 Washington Post piece, the national debt rose by almost $7.8 trillion during Trump’s time in office.

“The growth in the annual deficit under Trump,” they continue, “ranks as the third-biggest increase, relative to the size of the economy, of any U.S. presidential administration, according to a calculation by Eugene Steuerle, co-founder of the Urban-Brookings Tax Policy Center. And unlike George W. Bush and Abraham Lincoln, who oversaw the larger relative increases in deficits, Trump did not launch two foreign conflicts or have to pay for a civil war.”

For now, spend your time on Trump, Florida Gov. Ron DeSantis, drag shows, Marjorie Taylor Greene, Rudy Giuliani, immigrants coming from Canada, inflation, the war in Ukraine and anything else that gets your attention. Just remember that sooner or later, the debt ceiling is likely to be all that we are talking about.

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