Tuesday, April 02, 2019


Don't even ask whether this will happen. It'll happen.
A series of budget deadlines converge in the coming months that could leave Washington on the precipice of another shutdown, $100 billion in automatic spending cuts and a full-scale credit crisis. And lawmakers are openly worried about stumbling over the edge....

Some top Democrats have begun quietly pushing for a grand bargain to simultaneously raise the debt ceiling and Congress’ stiff budget caps — avoiding market turmoil and staving off harsh cuts to domestic and defense programs, according to multiple lawmakers and aides.

But the White House, focused on Trump’s reelection bid, is resisting talk of another massive deal that could cost as much as $350 billion over two years. Administration officials, led by Treasury Secretary Steven Mnuchin, are instead pushing for a “clean” debt ceiling hike that extends the federal borrowing limit without making any other policy changes.

The fiscal fights will reach a boiling point this fall — around the same time that Congress must pass its annual funding bills, which is guaranteed to dredge up the same border wall fight between Trump and Democrats that sent the government sputtering into a five-week shutdown.

By September, lawmakers could be faced with a fiscal cliff rivaling that of 2011, when another divided government nearly defaulted on its debt.
Even though this story, from Politico, says that "Senate Majority Leader Mitch McConnell and Speaker Nancy Pelosi are confident they can avert a doomsday scenario in which the U.S. government fails to pay its bills for the first time in history, according to lawmakers and aides," Trump loves to fight, and his new Prince of Darkness has a pro-chaos bias as well:
As Trump embraces the 2020 campaign in earnest, he could easily decide to demand border funding as part of the broader deal — effectively daring Democrats to risk international financial turmoil if they refuse to grant money for wall construction.

The risk is heightened, some lawmakers say, by Trump’s circle of advisers, including acting chief of staff Mick Mulvaney, who as a congressman threatened to refuse to raise the debt limit in 2011 until then-President Barack Obama agreed to deep spending cuts.
But won't this hurt Trump in 2020? Not necessarily.

It will happen more than a year before the election. Memories are short. And the right-wing media will blame Democrats exclusively, while the mainstream press will blame both parties.

And that helps...

... Howard Schultz, unless by then he's decided not to run for president. This will all happen in the fall; the timetable Schultz gave us in February was that he'd make his decision in "three to four months," meaning May or June.

If there's debt ceiling brinkmanship in the fall, accompanied by talk of spending increases, it'll be ideal for Schultz. He'll be ubiquitous on television. His message will echo the pox-on-both-your-houses talk from mainstream pundits. He'll climb in the general election polls, maybe even to numbers that suggest he could actually win. It will be the high-water mark of his campaign -- he'll recede as soon as the crisis is over -- but it'll lock in the perception that he should be taken seriously.

If early polling of a possible three-way race is any indication, that's excellent news for Donald Trump. That polling showed that Schultz would split the anti-Trump vote, thus making it much easier for Trump to beat the Democrat.

On the other hand, it's possible that a debt-ceiling crisis would make Schultz seem appealing to blow-it-all-up voters waho chose Trump in 2016 less out of GOP loyalty than out of disgust with the entire system.

But I think it's more likely to split the anti-status quo vote. And that helps Trump.

On the Democratic side, with primaries imminent, all this will probably help any candidate who's less identified with the D.C. establishment. It'll be good for Pete Buttigieg, who has nothing to do with Washington. It might also be good for Bernie Sanders and Beto O'Rourke, who are (Bernie) or were (Beto) members of Congress but whose standard argument is anti-business as usual. (It might also help Elizabeth Warren, although sexism makes it harder for a woman to be perceived as a badass rebel in that way.)

I don't know whether the effects will be lasting, but this will color the race for quite a while. I just hope Schultz and Trump aren't the biggest beneficiaries.

No comments: