Kind of wild that the ratings agencies are projecting calm citing the likelihood that Dems will avail themselves of reconciliation while Dems beg off reconciliation by citing the risk of a potential downgrade.
If anything the market is under-reacting because they think it'll get figured out, this is just posturing, etc. Meanwhile both sides think the other will blink if/when they do sell off. And/but every trader is watching for that dip to buy because it will be raised eventually.
There is absolutely nothing at stake here for Dems except "giving in" to Mitch McConnell and I can't even believe this is a debate.
On the one hand there's a meteor headed for the US economy; on the other hand this process we've used twice already this year is hard, risky, untested, and also Mitch is acting in bad faith.
There's not even a moral hazard issue here, where using reconciliation would lead to problems down the road. At worst, the next party in full control of Washington would have to use reconciliation to raise the debt limit. Ok. Filibuster probably gone anyway by that point.
Punchbowl sheds light on the path to raising the debt limit via reconciliation. There was never genuine confusion on this, but good to have this coming from the parl now that it's crunch time. email.punchbowl.news/t/ViewEmail/t/…
Also time to put away vote-a-rama as the excuse du jour. The whole array of counterarguments is just really unconvincing. There is plenty of time to do it unless you run out the clock saying there's no time to do it.
Still pretty wild no enterprising hill journo has done a whip count for a reconciliation debt lift given everything other bill we harass them about, real or theoretical.
Twitter is not a medium for nuance, but the Sinema discourse is particularly reductive. She's either a lightweight who has no idea what she's doing and gets rolled and/or bounced in 2024, or this calculated maverick bit is a boon for her brand back home. Neither are what matters.
The synthesis (and the point, if you're a counter-party--say, the WH) is that she has a very specific theory of the case as it relates to her brand/path/political future, one than leans into her contrarian streak and revels in these clashes. One that is unfalsifiable for 3 years.
It doesn't matter if you think she's a genius, a fool, or the joker incarnate--all that matters is that your agenda is toast without her, and betting it all on her responding in conventional ways to conventional pressure is a profoundly risky proposition.
Provided this doesn't all blow up, this ends with mods net positive (BIF-BTU), Pelosi more or less breaking even by keeping all the balls in the air, and progs escaping with what's left of their dignity in the form of a $3.5T marker.
She's been cryptic enough (and generally enigmatic enough) that I get the freakout, but not sure why we take second hand, buried-lede assertions of Sinema's opposition to any tax hikes seriously while understand basically everything else at this stage is just posturing.
That's not to say they're assured to get much here, or that what they do get will be easy, but Sinema was always the toughest nut to crack. The credulous idea that she's impossible to move on a lesser corp rate hike but that this all gets held together by a carbon tax (eg) is 🤔.
Recurring theme of doomerism mixed with deus ex machina delusion despite the fact that almost nothing has changed in 3-4 mos.
Here's where the timeline gets interesting--Josh G suggests it comes up on Monday but no vote until later. So nominally keeping promise but buying more time to round up the votes and pin down the second track.
Easiest/most obvious thing would be to have clear, public affirmation of this plan/sequence from Biden himself. Biggest point of contention to date has been who is truly advancing the interests of the Biden agenda and who is standing in the way.
Looked at the possibility of this maneuver in this week's note. Pelosi basically has to will her way past the various contradictory promises she made on all sides. And/but if she's made up her mind, and has WH sanction, hard to see progs blowing it all up. lpdonovan.substack.com/p/constant-bea…
We knew as far back as August that final passage was not possible in September. The only way you could squint and make it work was figure progs would accept House passage. That made sense until Pelosi promised to spare Mods on anything w/o Senate approval. This amounts to a swap.
Mods got two things out if Pelosi in the last showdown: passage on 9/27, and "one vote" on a consensus package. With no consensus package coming any time soon, they essentially get to pick one or the other. (All of this assumes Progs fall in line.)
The original reason was because both sides were convinced the other was going to knife them the minute they got what they wanted. Pure MAD/leverage. At this point it's mostly an ego-driven impediment to resolving this, except as a futile tool to force Sinemanchin to bargain.
If you are mad that Dems are put in the position of having to do this extremely inconvenient thing--and that's entirely fair--the silver lining is that it's an opening to kick this thing so far out into the innumerate ether that you don't have to worry about it again.
The debt limit is a nuclear political hot potato at this point and we'd all be better off without its semi-regular dramatic arc in our politics, so why not seize the opportunity.
Once the bill passes, it's going Biden's desk, period. It's just a matter of time. There's no actual mechanism for extorting the mods. All it would do is allow progs to lay down their weapons for nominal commitment from mods to support reconciliation, which they already have.
Inconvenient/indisputable reality. Dems are understandably frustrated to be put in this position, but even they don't dispute that they have the ability. Might be reckless, definitely unprecedented, but not wrong, and not at all clear why Rs would back down.
Once you account for the fact that Ds can do this (whether or not they'd prefer to,) R incentives are pretty straightforward. Bringing a ton of attention to the scale of current & future debt, even as a procedural matter, helps their argument/complicates Dems' internal sales job.
Layer on the fact that for the vast majority of these guys you'd get more heat for supporting the increase/facilitating a multi-trillion dollar Dem effort than you would from opposing and it's not all that complicated. kentucky.com/news/politics-…
None of this is surprising of course, but really underscores why leadership was so pissed at mods. Whether they were going to quietly sneak this through or not, forcing their hand led progs to dig in to a position they may not be able to back out of. politico.com/news/magazine/…
Wildly counter-intuitive, but given the fundamental trust problem at play, the best thing you could do here is find a fig leaf, declare victory, and release the hostage. Chaos & infighting inherently accrue to GOP's benefit (which explains everything about their current posture.)
Indicative of Dems' approach at every waypoint so far. Delaying tough decisions and tradeoffs can help move you forward procedurally but at the end of the day you're still sitting on a huge pile of unresolved issues. In the meantime the goal is for the 3.5 to survive and advance.
Also relates to why Dems are so insistent on sticking to these arbitrary/implausible deadlines. If you take your foot off the gas or otherwise get stuck on one of these issues at the committee stage, who knows where things go, especially as this is overtaken by Sept cliff action.
The debt limit mechanism has long since lost any utility, but until it's gone I think it's worth taking McConnell at his word (and that of the 46 Rs who signed a letter to the same effect.) Appeals to consistency/decency/precedent are useless so long as Ds can do it themselves.
Part of the challenge of parsing this standoff is the various rhetorical and procedural layers. MM is right that Ds can raise the debt limit unilaterally, but they don't want to raise it, they want to suspend it. And Dem bet/hope is that R pledge not to vote for it=/= filibuster.
One thing we can absolutely rule out I think is Rs allowing a suspension to proceed. Even if they were to allow Dems to raise on their own, they'd have to put a number on it that accounts for all their spending (and spending ambitions.) And/but if they do that they don't need Rs!
Ways and Means had been calling this $2.9T that added up to $3.5T with dynamic scoring "estimate." JCT says it's $2.07T. (Most of this is no revenue effect for drug pricing, which W&M counts for $700B.) jct.gov/CMSPages/GetFi…
Tax committees' nominal charge was to come up with $1B in net deficit reduction, so finding more than $2T in offsets and proposing well short of that in goodies checks the box. Essentially raising more and spending less than they technically had to/could have.
When we think about how this might be triaged, beyond phase outs and timing gimmicks, both the tax side and the spending side are informing the topline, but spending is far less fungible. Basically 13 silos, one of which accounts for half of the gross and all of the offsets.
What's interesting about the slow motion reveal of these various committee products and titles is that, like the budget resolution, it seems primarily designed to keep the $3.5T dream alive and delay any tough choices. Some logic to that, but all the more reason to settle in.
Markup process can't tell you much if they're just marking to the instructions, which thus far seems to be the case. And unless Ways and Means gives up the game this week with a skinny offset menu, all we're doing is getting closer to these self-imposed deadlines.
(And I do not expect a skinny offset package--I expect the kitchen sink.)