After the Georgia runoff elections many had high hopes for fiscal policy. But instead, we have hit very rough terrain. President Biden’s whittled down infrastructure spending plans are in critical danger ( weary readers may recall these plans started life as a much more expansive approach to “building back better” and what “infrastructure” meant). As time has draged on, the fights over the Biden administration’s spending agenda have crashed head first into our recurring cycle of debt ceiling crises. To recap, for obscure reasons in fiscal history, congress has decided to pass appropriations bills which authorized and required spending, while imposing arbitrary limitations on how much debt the treasury can incur in meeting the obligations which congress has imposed on the Treasury. Congress then raises this debt ceiling periodically (or suspends it altogether…). But this is not permitted before making raising it a place for partisan political grandstanding. This spectacle has gotten more serious as partisanship sharpened, and the Republican party became more single-minded in its policy-invariant opposition to Democratic presidents in the 1990s.
This is the most serious debt ceiling crisis yet — today there is not even a pretense of negotiations between the parties. Worse, the Democratic party controls the senate by the thinnest of margins, giving right wing Democrats enormous leverage. Many in Washington see what’s at stake as nothing less than the ability of those in the majority to govern and pass the agenda they were elected to pass — a reasonable perspective, to my mind.