So it’s come to this: another debt ceiling crisis.
This is the fifth standoff I’ve covered as a reporter. There was the big one in 2011, of course, but then the 2013 standoff related to Obamacare, the lower-profile standoff in 2015, and the 2021 fight that required a temporary change to the Senate filibuster. I’m 32 years old. As I tell myself in the mirror every morning, that is not old. And I’m on my fifth debt ceiling crisis. All of this has happened before, and it will all happen again.
The first-best solution to the standoff between President Joe Biden and the new Republican majority in the House would be for the latter to simply relent and pass legislation repealing the debt ceiling, or at least raising it without strings attached. House Speaker Kevin McCarthy is clear he won’t do that; he got his speakership specifically by promising the least responsible members of his caucus that he’d hold the debt ceiling hostage. But past speakers in his position, notably John Boehner in 2013, have blinked and wound up passing a “clean” debt ceiling bill anyway. Hopefully he does the same.
The absolute worst solution to the standoff would be for the federal government to default: to stop paying interest on its loans, or paying for programs from Social Security to the military, sending the economy into recession and the world into a financial crisis.
Somewhere in the middle are the two likeliest outcomes. One is for Biden to, like President Barack Obama in 2011, come to the table and cut a deal with McCarthy for a debt ceiling hike in exchange for spending cuts. This would avoid a recession but likely involve cuts to important programs from education to health research, which could have major negative long-term repercussions.
The final option is for Biden to use executive action to render the debt ceiling moot. There are several ways for him to do this, which I ran through in this piece. The funniest involves minting a platinum coin worth hundreds…
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