The Fiscal Cliff fight is won. And we won it. Either the Republicans will pass the new Obama Middle Class Tax Cuts before January 1 or after. If they do it before, they will not be politically destroyed. If they do it after, they will be politically destroyed once again, just before the Next Fight begins in earnest.
So what happened yesterday?
Well, the Senate Minority Leader, Mitch McConnell, ended any doubt at all that there will be filibuster reform this January, at the start of the next Congress. What did he do now, you ask? He did something pretty remarkable.
He filibustered himself.
Yes.
He filibustered his own bill.
Here’s the background. As Jason has written about, the next big fight between the Dems and the Rethugs is the coming vote to raise the debt ceiling. Mitch McConnell, back during the Summer 2011 Hostage Taking that was the last vote to raise the debt ceiling, floated an idea to break the impasse where the Congress would no longer have to raise the debt ceiling by a vote. Instead, Congress would change the law to allow Obama to increase the amount of money the government can borrow, while the Congress could vote on a resolution of disapproval, which, could be passed over a presidential veto with two thirds majority in both Houses if the Congress wished to default on the spending it had already passed.
Jason and others wondered before about whether the White House had a confused message between not negotiating on the debt ceiling. Well, here is your answer.
Since this was McConnell’s idea, and since the President had embraced it as a way to end the constant hostage taking and economy destroyed debt ceiling fights, McConnell decided to bring the bill to the floor of the Senate for a vote, assuming for some unknown mysterious reason that the Dems disagree with Obama on this point and would not want to vote for his bill. McConnell’s mission was to get Democrats, or a large chunk of them, and all Republicans to vote against the McConnell Bill (yes, his own fracking bill) so that McConnell can then say that the McConnell Bill (which he is of course now calling the President’s Bill) is so out of mainstream and an offensive power grab that even his own Democratic Party won’t touch it.
Except, McConnell’s little stunt backfired — Senate Majority Leader Harry Reid (D-Nev.) and his caucus immediately endorsed the idea, leaving the Kentucky Republican to have to filibuster his own bill before it could pass. As Sen. Chuck Schumer (D-N.Y.) put it, the gambit was “a little too clever by half.” Sen. Dick Durbin (D-Ill.) suggested there’s no recent precedent for a senator filibustering his or her own proposal.
But, as Steve Benen points out, the whole affair reveals the Democratic position on the Debt Ceiling, and how strong and unified position it is:
[W]e learned something important in the midst of this failed stunt: Democrats are entirely united on debt-ceiling strategy and want this looming threat to the country and its economy taken off the table, permanently.
In other words, what was a long-shot White House idea is, at least for now, the official position of the Democratic Party and a majority of the Senate. It’s the sort of revelation that’s likely to influence the negotiating process as congressional Republicans once again threaten to hurt the nation, on purpose, unless their demands are met.
Now, Jason and others, Puck included, what consideration of the 14th Amendment provisions as a way out of the Debt Ceiling Fight. And they took Jay Carney’s statement in opposition to the Constitutional Option under the 14th Amendment as evidence of White House confusion or Obama caving. I agree with Josh Marshall on this though, in that the Constitutional Option may sound good, but it won’t work.
Many opponents of GOP debt-ceiling hostage taking have been pointing for more than a year to the idea that the 14th Amendment might give the President authority to continue borrowing money even without a debt-ceiling vote. In other words, the entire concept of debt-ceiling votes are themselves unconstitutional because the President has the borrowing authority himself. I actually think there’s something to the argument. But the White House clearly does not. And that’s probably not even the biggest problem.
Assume there’s no constitutional problem to the President just going ahead and ignoring the debt ceiling. There’s also a market component. Simply put, the value of US Treasuries is the ‘full faith and credit of the United States’. World markets believe that promise is the closest thing in finance to certainty. And in moments of extreme uncertainty investors have even been willing to essentially pay the US government to hold on to their money for them.
But there’s never been a case before — except maybe arguably during the Civil War — when the US government has issued bonds that are somehow in intra-governmental dispute. If you’re buying US government debt, what if this particular auction is of Treasuries the sitting Congress says the Treasury Department isn’t authorized to issue? There would be Court challenges filed immediately. Surely, you’d prefer to wait for the ones that everyone agrees are OK. In practice, there’d surely be some inverse premium on these Treasury notes since they wouldn’t quite have the backing fo the full faith and credit of the US.
At a minimum that means the government would blow a lot of money simply because of that added uncertainty. But you’d also now have what amounted to two classes of Treasuries — the good ones and ones with an asterisk next to them. And as soon as you have that, at least some of the fixedness and clarity of what a US Treasury obligation represents would be blurred.
So the next steps in this battle are clear: 1) Filibuster Reform in early January; 2) Passing the McConnell Debt Ceiling Plan; and 3) Showdown with Boehner with no negotiation over the debt ceiling. Either Boehner passes the McConnell Plan or he is responsible for the default.
It is actually brilliant.