Deal or no deal?

May 19, 2023

[Due to travel, no audio for this edition of the newsletter.]

          As the weekend approaches, negotiators for the House and the administration are edging close to a deal—or not. It all depends on who you believe at what time of day. On Thursday, Speaker Kevin McCarthy suggested a deal could be reached this weekend. An hour later, a sizable chunk of McCarthy’s caucus told him to stop negotiating until the Senate passed the joke of a bill that the Freedom Caucus forced McCarthy to ram through the House. GOP Senator Josh Hawley said that if he were president, he would invoke the 14^th Amendment to pay obligations incurred by Congress, even if that meant ignoring the debt ceiling.

          In other words, anything can still happen—from a negotiated deal to unilateral action by Biden to a vote to remove Kevin McCarthy as Speaker.

        As negotiations drag on, it is becoming ever clearer that the ceiling is a vestigial appendage that no longer functions as part of the US budgeting and spending processes. In the prior newsletters this week, I recommended an article by Robert Hockett in Forbes, Six Legal Reasons the Federal Budget Is Its Own ‘Debt Ceiling’ - and ‘Floor’.  The force of his arguments has convinced readers who have reviewed Hockett’s article.

          On Thursday, Robert Hockett joined Professor Laurence Tribe to author an even more powerful and devastating take-down of the debt ceiling. See The Hill, Biden can, and should, ignore the GOP’s debt suicide attempt. In short, it is beyond doubt that Congress has superseded the limitations of The Liberty Bond Act of 1917 by enacting subsequent legislation mandating that the President pay all obligations created in the budget process.

          A key concept in the Hockett/Tribe article is that the current crisis does not pit Congress against the President. Instead, the crisis pits Congress against itself—because it has lawfully created obligations through the budgeting process that it cannot subsequently refuse to honor by failing to raise the debt ceiling.

          Hockett and Tribe write:

Again, the debt that our country owes has already been legislated by Congress. The moment it budgets for federal expenditures and federal taxes, Congress also budgets for U.S. Treasury issuance to cover any gaps between the two. And this includes Treasury issuances to cover past-debt redemptions as they come due — debt repayment and servicing themselves being budget line items. 

          If you liked Hockett’s article, you will love the Hockett/Tribe article. It is time to rid ourselves of this meddlesome relic of the past that died a natural death decades ago when Congress passed the Budget and Impoundment Control Act of 1974. If Biden cannot reach an acceptable deal, he should challenge the debt ceiling directly by declaring that it has been superseded by subsequent legislation, is unconstitutional in the present circumstances, and is a financial time bomb that has no role in the world’s largest economy.

          Some commentators are resurrecting the falsehood that the current mess is the fault of Democrats because they failed to eliminate the debt ceiling between the November 2022 election and the start of the 118^th Congress in January 2023—an interregnum during which Democrats controlled both chambers of Congress. There are two reasons Democrats did not eliminate the debt ceiling during that interim period: Joe Manchin and Kyrsten Sinema, both of whom view financial terrorism as a laudable “bi-partisan process.” See Talking Points Memo, No Revisionist History on a Lame Duck Debt Ceiling Vote.  

          It may be that the stronger the arguments become for ending the debt ceiling, the more realistic McCarthy will become in dealing with Biden. The real problem for McCarthy may be dealing with the Freedom Caucus of his own party, who will ask for a vote of no confidence on McCarthy if he makes a deal that varies from the bill Republicans passed earlier this month. In that case, Democrats may have to vote to keep McCarthy in his job so he can help pass compromise legislation—something that a group of forty Democrats has reportedly offered to do. See Politico, Centrist Dems are plotting a save-McCarthy strategy for the debt fight.

          So, buckle your seat belts and keep your hand and arms inside the moving vehicle! It could be a wild ride over the weekend, but there appear to be multiple pathways to success (including the discharge petition making its way through the House). That is progress from our situation a week ago.

Disney is playing hardball with DeSantis.

          Florida Governor Ron DeSantis will announce his presidential bid next week. In honor of DeSantis’s announcement, Disney Corporation sent DeSantis an announcement of its own—that it was canceling plans for a $1 billion “office campus” in Florida. Disney had asked 2,000 employees to relocate from California to the new campus in Florida, a request that Disney has now canceled.

          DeSantis released a statement designed to exacerbate the dispute with Disney. DeSantis said,

Given the company's financial straits, falling market cap and declining stock price, it is unsurprising that they would restructure their business operations and cancel unsuccessful ventures.

          Gosh! If DeSantis keeps up that kind of talk, perhaps Disney should consider canceling the “unsuccessful venture” of Disney World in Orlando.

Welcoming Richard North Patterson to Substack!

          Longtime reader of this newsletter, best-selling author, and my friend Richard North Patterson has joined Substack at “Richard’s Substack” (link provided below). Ric is a lawyer, an advocate for democracy, and an insightful political commentator. Among many other leadership roles, Ric served as Chair of Common Cause. In his spare time, he has written dozens of best-selling novels. Of late, Ric has been part of the crew at The Bulwark, which has a stable of talented writers who do not suffer fools gladly (Looking at you, Trump!).

          Ric’s launch on Substack is a bit different than most. He is using Substack to do a serialized release of his upcoming novel, “Trial.” You can read the first two dozen chapters of the novel on Ric’s Substack page—for free! I hope Ric will expand his presence on Substack to include regular political commentary. We need more voices like Ric’s on this platform—a voice that is both formidable and respected.

          The following two paragraphs are an unpaid and unsolicited review of Ric’s novel, Trial. He sent me an advanced copy, saying he thought I was “experientially and philosophically” in his core audience for the novel. He was right. Trial revolves around the murder trial of a Black 18-year-old voting rights worker accused of the fatal shooting of a white sheriff's deputy during a late-night traffic stop in rural Georgia. That trial inevitably confronts some of our most pressing racial problems—including white nationalism and racially-targeted voter suppression.

          In truth, I generally avoid novels, movies, and television shows about lawyers and the law because the authors rarely get the “law” part right. But Ric is a lawyer and gets everything right while telling a compelling, engaging, and emotional tale that is highly relevant to this moment in our nation’s history. You don’t have to be a lawyer to enjoy the novel because it weaves multiple narratives about family, love (lost and found), and the human condition—in all its goodness and ugliness. I really enjoyed the novel. But don’t take my word for it; check out Richard North Patterson Substack and see for yourself. “Trial” will be released on June 13^th by Post Hill Press.

          Welcome to Substack, Ric!

Join an event with Jamie Raskin and Jessica Craven to  “Put North Carolina First!”

          The GOP-controlled legislature in North Carolina just overrode Governor Roy Cooper’s veto of a ten-week abortion ban. That override was possible only because North Carolina has implemented outrageous partisan and racial gerrymandering that has given the GOP a super-majority in the NC legislature. “Put NC First,” a donor coalition, plans to challenge the GOP’s lock on the state legislature by knocking on three million doors for 2024 - triple the 2020 level (when Warnock and Ossoff won their upset victories).

       Two of your favorite people, Rep. Jamie Raskin and Jessica Craven (of Chop Wood Carry Water) are helping Put NC First to raise funds to achieve their goal. Rep. Raskin is the Democratic Congressional Campaign Committee's Vice-Chair for Organizing, and Jessica Craven is a force of nature! Join Rep. Raskin and Jessica on May 23, 7:30 PM to 8:30 PM Eastern, to hear how your donations be used to build power across North Carolina heading into 2024. Register here: HERE.

Concluding Thoughts.

          Tonight’s newsletter is shorter than usual because my wife and I traveled to DC today to help celebrate our youngest daughter’s birthday. Between the travel and the celebrating, I was pressed for time to publish a newsletter this evening.

          I started this newsletter in early 2017 to help sustain and lift up my family after Trump's unexpected victory in 2016. I could not have imagined that seven years later, that need would be ongoing, more urgent, and broader in scope. And yet, here we are. The trip to DC reminded me how far we have come since the initial dark days of 2017 when Republicans controlled the Oval Office and both chambers of Congress.

          But success is not measured by control of Congress alone. Democrats have made significant strides at the state legislative and executive office levels. Those successes have been countered by virulent and extreme measures by Republican legislatures to divide Americans—an endeavor in which the reactionary majority in the Supreme Court has been the GOP’s eager partner.

          We should take confidence from our victories and renewed determination from our losses. Any objective observer would much rather be a Democrat than a Republican at this point on the curve of American history. We have gone through a rough patch and may experience more losses. But, on average, we are winning because our vision for the future is based on justice, equality, liberty, and tolerance. Theirs is based on grievance and fear. Over time, the positive vision will prevail. Let’s stay the course!

          I will send a short newsletter tomorrow to open the Comments section.

          Talk to you tomorrow!