What does a BIDEN Presidency look like?

Started by Caliga, November 07, 2020, 12:07:22 PM

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Sheilbh

Oh interesting - thanks.

Agree that would make much more sense.
Let's bomb Russia!

Hamilcar

Quote from: OttoVonBismarck on May 25, 2023, 06:27:47 PMNo--they are separate.

Before the modern system, Congress literally had to draft a law creating bond programs of a specified size and etc. They decided this was too cumbersome for modern finance, and passed a law giving the Secretary of the Treasury authority to create and issue bonds.

Not long after that, Congress realized that this in theory could allow the Secretary of the Treasury to take the U.S. into a lot of debt for no reason--while they still controlled appropriations and taxation, under the initial grant the Secretary of the Treasury could theoretically just issue debt for various reasons. The debt ceiling creates a statutory limit after which the SecTreas cannot issue any further debt.

A much more logical bill 100 years ago would have just been to say that SecTreas can issue debt "as needed, but only to pay for spending appropriated by congress."

Did the people who introduced the debt ceiling mechanism see it basically as functional, or did they intend it to be jaded as a political weapon?

OttoVonBismarck

#3872
So I got some of the details wrong from memory.

The 1917 Liberty Bond Act gave the Secretary of the Treasury specific authorization to issue various bonds and Treasury bills at his discretion, which changed the norm of Congress having to pass legislation authorizing specific tranches of bonds.

This act also contained a limit for each type of debt instrument, but not an overall aggregate ceiling.

In 1939 a law was passed creating an aggregate ceiling on all issued debt.

It was intended to be used for political purposes to try and control the budgeting process, so it essentially functioned as it does now.

However, it arguably at least had some plausible justification in 1939. The whole Federal budgeting process used to work way differently, and there were limited parliamentary procedures available to actually "debate the budget" in Congress. The debt ceiling gave factions in the Congress the ability to force public debates about the budget, and arguably exercise more appropriate legislative oversight of budgeting.

At this time, the President actually had some permanent and standing powers to sort of engage in spending and incur debts on his own discretion. Instead of the modern budgeting process, the main way that the Congress had historically exercised "power of the purse" was control over taxation (which controlled the revenue available to the President), and control over debt--which, Constitutionally no one but Congress can issue debt, so while Congress may not have rigorously budgeted / appropriated every line item like they do today, these twin powers meant that the President had limits to his fiscal operations.

(There are many reasons we didn't use to do modern congressional budgeting--not least of which is Congress lacked institutions to do budgets, it had to be ran out of the Secretary of the Treasury's office which had more staffers by many orders of magnitude than did the entire U.S. Congress.)

In this context, since they had delegated their ordinary statutory power of debt issuance to the Treasury, a statutory limit on amounts of debt made sense or they would be basically ceding almost all the power of the purse away from Congress.

In 1974 this all changed significantly with the Congressional Budget Act. This did a few things:

1. Established the Congressional Budget Office, giving Congress the staffing framework needed to engage in real Congressional budgeting.

2. Normalized that now the President would have a specifically appropriated annual budget passed by Congress as a law.

3. To avoid potential end runs around Congressional budgeting authority, they also forbade the historical practice of Presidential impoundment. This practice allowed the President to unilaterally "decide" some things just didn't need paid for, because he didn't want them funded. If they had left this power (which is not a Constitutionally stipulated Presidential power, but just a power he de facto executed by the nature of running the executive branch) unchecked, their attempts to impose Congressional budgeting would have been undermined. So Title X of the Congressional Budget Act is frequently called by itself the "Impoundment Control Act." This Act makes it so the President explicitly does not have discretion in ordinary circumstances, as to what to fund and not fund. He has to pay all things appropriated.

The old debt ceiling law was initially left untouched.

However, in a more reasonable era of politics, Congress quickly recognized that they now had full control of an annual budget, and the political utility of controlling the debt ceiling separately diminished, and was extraneous. They formalized what became known as the "Gephardt Rule", where as a parliamentary rule, going forward each year's budget would not be passed without also raising the debt ceiling the same amount as the budget required (and some extra padding.) This was then the norm between then and 1995, when the rule was overturned by Newt Gingrich specifically to allow his party to try and destroy the United States (this was not the only thing he did to that end.)

It should be noted too, that prior to the 1974 laws on Congressional budgeting and impoundment, the old debt ceiling, while useful to maintain power of the purse was nowhere near as dangerous. Without a restriction on Presidential impoundment, in earlier debt ceiling fights (like one in the mid-1950s) there was no real risk of default. Since the President had legal impoundment authority, his SecTreas had way more flexibility to avoid not paying debts--they could just impound funds for any number of agencies and keep paying debts out of revenue.

Technically under the current law, other than some of the limited financial moves SecTreas Yellen is engaging in, Biden doesn't have that legal flexibility. It has often been suggested that breaching the ceiling is no big deal because Biden can just defund "unimportant" programs and prioritize debt payments--we obviously have more than enough recurring government revenue to make all our debt payments. Problem is, before 1974 the President could do that in a debt ceiling crisis, but they legally cannot do it now. While the President could try, like all current suggestions for bypassing the debt ceiling, it rests on speculative ground and even trying it would result in uncertain legal battles which would in turn cause the very market harming economic effects everyone is afraid of with the debt ceiling in the first place.

grumbler

Quote from: Hamilcar on May 26, 2023, 01:24:03 AMDid the people who introduced the debt ceiling mechanism see it basically as functional, or did they intend it to be jaded as a political weapon?

The debt ceiling was imposed as a means by which Congress could monitor government spending during a war.  It was likely intended to keep the partisan politics out of wartime spending (which couldn't be predicted as well as normal appropriation spending).  Laws already exist that require the Executive to spend all appropriate money for the authorized purposes, so under normal appropriation (i.e. non-wartime) procedures Congress has obliged itself to raise the debt as necessary to accommodate the spending it has appropriated money for.  The debt ceiling law should have been sunsetted after the First World War and further appropriations bill then, as Otto noted, simply contain the proviso that the Executive has the authority to issue bonds as necessary to pay for appropriations.

The debt ceiling was never intended as a sword of Damocles that would allow feckless politicians to threaten to ruin the US credit rating for partisan gain.  I doubt that the 1917 Congress even considered the rise of such politicians to be a possibility.

The future is all around us, waiting, in moments of transition, to be born in moments of revelation. No one knows the shape of that future or where it will take us. We know only that it is always born in pain.   -G'Kar

Bayraktar!

The Minsky Moment

Around 20 years ago the New York state court system put into place an electronic filing system, and over time more categories of cases were designated for electronic filing.  But the old rules for filing papers were not supplanted and the result was a hybrid system where you would file papers electronically, but then also submit hard copy papers with colored jackets to a room where a clerk would verbally call out cases and make markings in them.  A odd combination of 19th century and 21st century technology.  Then COVID came and the oral "calendar calls" were suspended. Some of the paper filing rules are still on the books, but post-COVID many judges now have individual rules making them "paperless parts".

There's lots of stuff like that in the law.  New rules and practices are adopted to address contemporary problems, but the old rules are not always repealed.  The old rules survive in vestigial form, with the rituals being observed despite the fact that the original purposes for which they were intended no longer exist.

In most cases, this sort of thing is mostly harmless, an annoyance perhaps for lawyers and bureaucrats (although at the same time their knowledge of this arcana sets them apart from ordinary common sense citizens who aren't familiar with the legalistic hocus pocus).  In the case of the debt ceiling however. it is not merely a generator of some inconvenient red tape, but is a threat to the entire world financial system. 

In a nation with a reasonable functional government, this problem would be easily resolved by consigning the legal fossil to history.  Alas, reasonably functional is no longer an accurate description of American politics.
The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.
--Joan Robinson

Hamilcar

So who was it that weaponized the debt ceiling? Don't tell me it was Newt Gingrich?

OttoVonBismarck

The debt ceiling has been weaponized throughout the 20th century. For example between late 1953 and mid 1954 the Senate refused to raise it for disputes they had been having with the executive branch over financial issues; but because of the different laws in place at the time the Treasury was able to manipulate funds for that entire duration without it being a problem.

There was, as I mentioned, a period from the late 70s til 95 where the Gephardt Rule was in place--which was just a parliamentary rule in the U.S. House; that tied budgets to debt ceiling raises.

Newt is certainly the one who ended that rule, which allowed for the debt ceiling to be used as a second cudgel in addition to the budget process. However, Newt never really had a debt ceiling crisis proper. He had a few major conflicts with the Clinton Administration--two government shutdowns over refusal to pass a budget, and obviously impeachment.

The debt ceiling being decoupled from the budget in the House's parliamentary rules dates to the budget showdowns Newt had with Clinton. The Republicans started to use the threat to not raise the ceiling as a rhetorical device and passed a rule change to add weight to the threat. But at least at that time, the debt ceiling was not actually close to being breached and the more immediate crisis was the Federal government being shutdown due to not having a budget. That all resolved before the debt ceiling really became an issue, and Newt never actually refused to raise the ceiling in a relatively timely fashion.

The Minsky Moment

The 1953-54 incident was categorically different.  There was never any real risk of default and no threat.  Harry Byrd used his blocking position in the Senate as a mechanism to prompt a discussion in Congress about budget priorities.  But when the need to issue more debt could not be delayed, he quickly agreed to an increase. He had no intention of playing chicken over a default.
The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.
--Joan Robinson

Hamilcar

What I don't understand is how threatening to force the country to default unless you get your way is politically acceptable. Do the people supporting this maneuver think that defaulting is an acceptable tail risk? Or are the oblivious of what the consequences really would be?

HVC

Quote from: Hamilcar on May 29, 2023, 09:29:51 AMWhat I don't understand is how threatening to force the country to default unless you get your way is politically acceptable. Do the people supporting this maneuver think that defaulting is an acceptable tail risk? Or are the oblivious of what the consequences really would be?

All the know is that they're owning the libs.
Being lazy is bad; unless you still get what you want, then it's called "patience".
Hubris must be punished. Severely.

Grey Fox

Quote from: Hamilcar on May 29, 2023, 09:29:51 AMWhat I don't understand is how threatening to force the country to default unless you get your way is politically acceptable. Do the people supporting this maneuver think that defaulting is an acceptable tail risk? Or are the oblivious of what the consequences really would be?

They don't have to care about that, the other side will always fold. Always bluff & always push, the Dems never can do anything but fold.
Colonel Caliga is Awesome.

crazy canuck

Quote from: Barrister on May 23, 2023, 04:55:27 PM
Quote from: The Minsky Moment on May 21, 2023, 09:57:25 AMDefendants can wear whatever they want, but their sartorial choices may impact their fate.

Same goes for civil cases including video depositions. 

BAck when I was just starting out I had misdiarized something, and I had to call my client at the absolute last minute to come to court (it was something civil, but not a full trial).  So my client had to come right from work, in full work clothes, his work boots covered in mud.

My client was pissed - he wanted to be dressed better for the judge.

But let me tell you - I guy who obviously works so hard he had to come right from the work site, his boots covered in mud, could not have played off any better in court if I had tried.  The judge just ate him up.

Now yes - the Alberta Provincial Court - Civil Division in High Level (just a couple hours from the NWT border) is probably not the same as court in Manhattan, but the dress code can indeed be pretty flexible.


Personally when advising witnesses I tell them to dress nicely (I used to say as if going to church but then I realized that didn't mean anything to enough people) but by no means to buy new clothes.  They should still dress authentically as themselves.

Agreed, if judges see someone who is obviously wearing a suit for the first time in their life - they are likely to have an unfavorable impression.  I give the same advice about what to wear to court. 
I want you to panic

https://www.theguardian.com/science/video/2019/jan/25/i-want-you-to-panic-16-year-old-greta-thunberg-issues-climate-warning-at-davos-video

"Woke" is now almost exclusively used by those who seek to deride it, those who chafe at the activism from which it sprang. Opponents to the idea are seeking to render it toxic. They use it to stand in for change itself, for evolution, for an accurate assessment of history and society that makes them uncomfortable and deflates their hagiographic view of American history.

Syt

If we want to prevent catastrophic economic and societal change we will have to radically change our climate system.

Proud owner of 42 Zoupa Points.

Valmy

It is kind of weird how many organizations claiming to be for Liberty and Freedom are actually for restricting both. Or, in this case, be unwavering in their support of arbitrary extra-judicial executions.
Quote"This is a Russian warship. I propose you lay down arms and surrender to avoid bloodshed & unnecessary victims. Otherwise, you'll be bombed."

Zmiinyi defenders: "Russian warship, go fuck yourself."

Savonarola

Quote from: Valmy on May 30, 2023, 01:40:12 PMIt is kind of weird how many organizations claiming to be for Liberty and Freedom are actually for restricting both. Or, in this case, be unwavering in their support of arbitrary extra-judicial executions.

...says the fan of the French Revolution who calls himself "Valmy." :P
In Italy, for thirty years under the Borgias, they had warfare, terror, murder and bloodshed, but they produced Michelangelo, Leonardo da Vinci and the Renaissance. In Switzerland, they had brotherly love, they had five hundred years of democracy and peace—and what did that produce? The cuckoo clock