The only way to save Biden's policy agenda — and the global economy

Barring some unforeseen catastrophe, the perceived success of the Biden administration's first term will likely depend on two things: if Democrats can pass the reconciliation bill before the Senate, which contains basically all of President Biden's policy agenda, and whether they can raise the debt ceiling to stave off global economic collapse.

Members of Biden's own party are getting in his way. A gang of moderate Democrats are threatening to destroy the reconciliation bill, while their reluctance to amend the Senate rulebook precludes the simplest path to removing the debt ceiling threat. A successful Biden term will require bringing them to heel.

Counterintuitively, the looming debt ceiling is the more immediate problem. The ceiling has nothing to do with taxing or spending per se — it's a legal anachronism dating from the first World War which artificially restricts government borrowing. No other country in the world has one (except Denmark, which raised its ceiling so high it won't be reached for decades). That's because it makes no sense to require the legislature to vote twice to authorize the same debt-financed spending: one vote to spend the money, and one vote to move the ceiling so it can be spent.

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If the Oct. 1 deadline is passed and the debt ceiling breached, the Treasury Department would probably miss an interest payment — that is, it would default on the national debt. And since U.S. debt is the bedrock asset of the global economy, default would cause unimaginable financial chaos, possibly worse than what happened in 2008.

Democrats refused to include a debt ceiling increase in their reconciliation bill, apparently hoping that they could bully Republicans into voting for it. This is likely because moderates fear being tarred as tax-and-spend liberals, and want to get Republican cover. But as anyone possessing object permanence could have predicted, the GOP is doing no such thing. "Republicans have argued that Democrats have the votes to increase the debt limit on their own and should do so given that Democrats are pushing trillions of dollars in new spending priorities," reports Jeff Stein at The Washington Post.

It's irresponsible for Republicans, who contributed to the national debt, to vote against raising the ceiling. But the Republican point that Democrats could do this on their own is correct.

Biden could just declare the ceiling unconstitutional because of the Fourteenth Amendment, which states: "The validity of the public debt of the United States ... shall not be questioned." Or he could "mint the coin," exploiting an obscure legal loophole that allows the Treasury to create platinum coins of any denomination, expanding the government's borrowing capacity through printed money (essentially a legal accounting hack to get around a silly law).

Or they could do things the old-fashioned way by voting. Democrats have the votes in Congress to raise the ceiling — or better yet, abolish it altogether. But either outcome would require overcoming united Republican opposition by getting rid of the Senate filibuster, which moderates refuse to do, in another act of self-sabotage.

This should be a political no-brainer. The debt ceiling is such an arcane procedure that most voters have no idea how it actually works, and there's little evidence politicians suffer politically when they vote to increase it. The unemployment rate and state of the pandemic will be orders of magnitude more important than some bizarre procedural vote when it comes time for an election in 2022. Democrats should do what's necessary to increase the debt ceiling and then move on. Instead they're being stymied by the moderates.

Which brings us back to the reconciliation mess.

Democrats pursued a reconciliation bill in the first place because it allows a bypass of the filibuster so budget legislation can pass with just 51 votes. But even that simpler process is imperiled by the moderate cabal's drastic procedural maneuvering.

First, moderates demanded that their pet items be carved out of the Democrats' reconciliation bill and placed in the bipartisan infrastructure deal. But now that moderates have isolated what they want most in a separate package, they're trying to force a vote on reconciliation so they can torpedo it. Sen. Kyrsten Sinema (D-Ariz.) has reportedly delivered an ultimatum to Biden that if the House delays its scheduled Sept. 27 vote on the infrastructure deal, she won't vote for reconciliation.

The tell for what is really going on here is the actual policy in the reconciliation bill that moderates are complaining about. Sinema recently came out against drug price reforms that would allow Medicare to negotiate prices with pharmaceutical companies, as did Reps. Kurt Schrader (D-Ore.), Scott Peters (D-Calif.) and Kathleen Rice (D-N.Y.). The reforms are everything moderates profess to want. They're the most popular item in the reconciliation bill at an astounding 88 percent support, would cut government spending through lower drug prices, and have been the centerpiece of Democratic campaigns for the last two elections, including those of all four of these lawmakers. (The House members also voted for it when it wasn't going to pass.)

Now, when it counts, all four are siding with Pharma, which doesn't want this policy because it would mean fewer profits from soaking the government with ludicrously inflated prices. Why? It might have something to do with — what else — money. "Sinema ranks as one of Congress' leading recipients of pharmaceutical industry donations, according to an analysis by Kaiser Health News," notes Politico.

The whole affair is just wild. In sum, a handful of Pharma shills are using extreme hardball tactics to blow up their own president's policy package, then pretending that nothing can be done about ridiculous Senate rules that were never supposed to be a tool of constant minority obstruction.

I see just one realistic path forward. The infrastructure bill, while it has some worthwhile elements, is small potatoes and won't have much effect for several years. The only way to see if Democratic moderates are bluffing with their ultimatums is to be genuinely prepared to kill the infrastructure bill.

Biden and the progressive House caucus should fight fire with fire: Demand an end to the filibuster, an end to the debt ceiling threat to the global economy, and a significant reconciliation bill included alongside infrastructure. Moderates can fall in line — or get nothing.