The Debt Ceiling and False Equivalence

The hardest political stories for reporters to cover and pundits to analyze can be those that are neither 100 percent stories nor 50 percent stories.

A 100 percent story is one in which reality is clear (even if partisans sometimes deny it): Joe Biden won the 2020 election. The planet is warming. Crime and inflation are higher today than a few years ago.

A 50 percent story is one in which letting both sides have their say is the only fair way to cover it because the issue involves unavoidable trade-offs for society (even if partisans sometimes suggest otherwise). Tax rates, abortion, border security and religion in schools all qualify. These disputes are more about values and priorities than underlying reality.

Some stories, however, don’t fit in either category. These stories tend to involve disputed facts, and each side can point to some evidence for its argument — but not equal amounts of evidence. In this third category, one side makes claims that are much more grounded in truth although neither side has a monopoly on it. I think of these stories as 90 percent stories.

The fight over the debt ceiling is a 90 percent story.

One branch, big demands

Almost no other country in the world has a debt ceiling. Elsewhere, politicians argue over how high taxes and spending should be when passing budget laws. Once those laws have passed, the government doesn’t need any additional authority to borrow money to pay for its programs.

Your household budget works the same way: You don’t first decide whether to buy a car and then separately decide whether you should repay the car loan. The decision is whether to buy the car in the first place. If you do, you repay the loan — or go bankrupt.

The U.S. government instead uses a two-step process. After passing tax and spending policies, Congress must pass another law that authorizes repayment of its obligations. This second law increases the limit on how much the government can borrow, which is known as the debt ceiling. (Here’s an explainer.) Denmark is the only other country with a similar system, and Danish politicians increase their debt ceiling well in advance, typically without rancor.

On Monday, Janet Yellen, the Treasury secretary, announced that the federal government was likely to hit its debt limit in about a month, around June 1. If that happens before Congress raises the ceiling, the federal government could default. Defaulting could spark global financial chaos because investors have traditionally viewed American debt as a safe investment in a risky world.

The debt ceiling is not a 100 percent story because both parties have used its existence as a threat, intended to win policy concessions, when the other party controls the White House. As a senator, Biden voted against increasing the ceiling multiple times, and Senator Barack Obama voted against doing so in 2006.

But the debt ceiling is not a 50 percent story, because the two parties have nonetheless behaved very differently. Democrats have never allowed the ceiling to get close to being breached; when a Republican is president, Democrats have agreed to increase the limit well in advance. That’s what happened without much drama in 2019, when Donald Trump was president and Democrats controlled the House.

“I can’t imagine anybody ever even thinking of using the debt ceiling as a negotiating wedge,” Trump said.

When Obama was president in 2011, by contrast, Republicans came so close to allowing a default that financial markets tightened and the economy and job market suffered. Today, Republicans are calling for sweeping policy changes even though they control only the House, while Democrats control the White House and the Senate. Republicans say they will lift the debt ceiling only if Biden agrees to a large cut in federal spending that would undo some of his climate policies and make it easier for wealthy people to avoid paying taxes.

A dangerous mix

This asymmetry makes the debt ceiling a 90 percent story. And it puts the Biden administration in a difficult position.

The endgame remains genuinely uncertain. A few dozen far-right House Republicans seem willing to allow a default if they don’t get their way. Biden and his aides, for their part, believe that yielding to Republican demands will lead to more turmoil the next time the country reaches its debt limit, perhaps as soon as next year.

Instead, White House aides are debating whether the Constitution gives the president authority to act even if Congress does not, The Times reported yesterday, while House Democrats have developed a long-shot plan to force a vote on a simple debt-limit increase that might win support from Republican moderates.

“The overwhelming sense on Capitol Hill is that these negotiations may be different than past negotiations,” Catie Edmondson, who covers Capitol Hill for The Times, told me yesterday. “Democrats learned from 2011 that these types of deals only encourage Republicans to play games with the debt ceiling, and the current Republican majority is composed of lawmakers far more willing to dig in and fight, regardless of the consequences. That is a dangerous combination.”

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Musical competition

The nominations for the Tony Awards, announced yesterday, turned the spotlight on the potential winners. This year’s competition for best new musical is close, critics say.

“Some Like It Hot,” a Jazz Age show about two witnesses to a mob hit, scored the most nominations with 13. It’ll face competition from “& Juliet,” which combines pop songs with an alternative take on Shakespeare’s star-crossed lovers; “New York, New York,” a dance-driven show with a postwar setting; and “Shucked,” a comedy about a community’s corn crisis. The critical favorite is “Kimberly Akimbo,” about a high-school student with a life-altering genetic condition.

Here are all the nominations.

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