The Arrival of 'Normal Politics' for the Debt Ceiling

Plus: A dispute in LA over whether crime matters.

Dear readers,

Hello! In case you have not seen it, Substack Notes has launched, and I encourage you to check it out. I’m currently finding it to be a more interesting and productive forum than Twitter, and it’s where I’ll be intending to focus my short-form posting energies.

Now, let’s talk about the debt ceiling.

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Approaching normal politics

Joe Biden has been clear: If Republicans want a negotiation over government spending, they need to make their own proposal first about what the government should spend. After months of failing to produce a budget — and with it looking like House Republicans are unlikely to produce one anytime soon — Speaker Kevin McCarthy is now trying to put together a bill the House can pass and call its starting point for negotiations over raising the debt limit.

Jake Sherman described the emerging proposal in today’s Punchbowl News AM:

The legislation would lift the debt limit until May 2024. Leadership is considering either a cap on non-defense discretionary spending or a cap on overall discretionary spending after reducing it to FY 2022 levels. One cap being considered is $584 billion for non-defense discretionary spending — excluding Veterans Affairs programs.

They’re aiming to limit budget growth to 1% annually for the next 10 years. The House GOP proposal would rescind unspent Covid money, prohibit student loan forgiveness, repeal some green tax credits, institute work requirements for social programs and implement the House Republican energy plan (H.R. 1) and regulation-cutting REINS Act.

The next federal fiscal year starts on October 1, and $584 billion would constitute a significant reduction in spending that year compared to 2023. It would even be a major reduction compared to 2022, when measured in real terms, because there has been so much inflation over that two-year period. So this proposal is a non-starter for Democrats.

I am also deeply skeptical that Republicans will be able to pass it through the House. It would fall well short of the spending-cut demands that certain right-wing members of the caucus made and were promised in exchange for supporting Kevin McCarthy for speaker. At the same time, it would force moderate Republicans representing competitive districts to take a show vote that Democrats could then beat them over the head with. Spending cuts are more popular in the abstract than when applied to specific programs, and Democrats would impute the effect of the severe overall caps (and of the work requirements) on specific program areas in order to accuse Republicans of seeking to gut popular spending areas from food stamps to education to border security.

But I nonetheless think the proposal is a good sign, because it’s the next step toward a normal political process for haggling over the debt limit and the budget.

As I wrote a few months ago, the debt limit has routinely been used, for decades, as a mechanism for horse-trading about other policy matters. The idea many Democrats have sold to themselves — that negotiating over the debt limit increase was a one-time mistake made in 2011 — is just ahistorical. What was unusual about 2011 was the scope of the negotiation: The fiscal concessions Democrats made to obtain a debt limit increase were very large, and they came to find them very regrettable. But lots of other debt limit deals, before and since, have contained riders and concessions that simply weren’t so big.

If Republicans manage to pass this debt limit proposal, it will be a sign that the party has coalesced around a demand for very large spending cuts (though not as large as some conservatives previously said they would demand). In the more likely event that they fail to pass the proposal, it will be a sign that Republicans aren’t aligned, and that they’ll need to start preparing to pass something of a much more modest scope.

I think the most relevant historical comparison here is the 1995-6 budget standoff, when a succession of looming breaches of the debt limit were initially addressed with a series of very small debt limit increases designed to create more time for arguing. I wrote:

Republicans spent months haggling over spending with President Clinton and periodically shutting down the government; along the way, they passed a number of stopgap bills that modestly increased the government’s ability to borrow, often delaying a default crisis by just weeks at a time. By March 1996, they still did not have a long-term agreement on spending, and as I described above, Republicans agreed to a larger debt limit increase in exchange for concessions only tangentially related to the budget.

Obviously this is not an ideal way to manage the federal budget, but it’s a precedented one, and the specter of really imminent default may (as it has in the past) force hands in Congress that previously looked un-forceable. So an important question about Kevin McCarthy’s position is one that I don’t think has been explored much: Can he retain the speakership while bringing bills to the floor that postpone a debt crisis by a matter of weeks — not a capitulating on the negotiation, but buying time to push it out? It’s something that Newt Gingrich was able to do, repeatedly.

Dall-E image generation for “politics as usual, impressionist painting”

On the longer-run endgame, Jonathan Chait recently wrote optimistically about a trial balloon some Republicans have floated: the idea that a substantial debt limit increase could be tied to a permitting reform package. While there are lots of disagreements over details, permitting reform (intended primarily to encourage the construction of energy infrastructure) is a priority for many lawmakers in both parties, and so tying the two policies together could be a way to reach a deal, avert a debt crisis, and allow both sides to declare victory.

I don’t think we’re close to being there yet. There are a lot of dismissive on-the-record comments from Republican lawmakers about a permitting-for-debt limit trade — see, for example, Rep. Chuck Fleischmann noting to Politico that they could probably get a bipartisan deal on permitting without tying it to the debt limit precisely because it is a priority for many in both parties.

But if we’re going to re-run the 1996 example, permitting reform would make sense as the kind of only-indirectly-budgetary policy you could eventually attached to a debt-limit increase after Congress has spent months exhausting itself with fighting over spending levels. I doubt it could stand alone as the only attachment, but it’s a place to start.

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Controversy in California: Should Crime Be Punished?

LA has a major problem with catalytic converter theft: criminals slicing the devices out of cars, especially hybrid cars, thus rendering them inoperable until an expensive repair can be performed. The thieves don’t even want the converters as car parts; they want the tiny quantities of precious metals the converters contain. What they get in value for fencing a stolen converter is a tiny fraction of what it costs the car owner to get a new converter installed, so the whole thing, in addition to being criminal, is very wasteful.

So earlier this week, the Los Angeles City Council passed an ordinance that makes it a crime to possess a loose catalytic converter, unless you have proof that you actually own that catalytic converter, so people in possession of stolen converters can be arrested and prosecuted without needing to prove what car a given converter was stolen from, or whether that car was in Los Angeles.

The vote on the ordinance was 8-4. And the quotes from some of the city councilmembers who voted against the proposal are wild:

[Councilmember Eunisses] Hernandez said the city’s ordinance, which would treat possession of catalytic converters as a misdemeanor, would disproportionately target Black, Latino, Indigenous and low-income residents.

“A criminal conviction and jail time can damage someone’s life forever, leading to collateral consequences like the inability to obtain jobs, rent apartments and get a loan,” she said. “This puts people in a revolving door of desperation and recidivism.”…

Hernandez and Councilmember Hugo Soto-Martinez said a better strategy would be for the city to help residents attach cages or other anti-theft devices to their cars to protect their catalytic converters. [Councilmember Marqueece] Harris-Dawson said the ordinance would cause more Black and Latino drivers to be pulled over and questioned by officers about what’s inside their cars.

Punishing people for possessing unattached catalytic converters “doesn’t help anybody,” he said.

“When somebody gets something stolen, the city should be doing everything we can to make sure they’re made whole — not to punish another person,” Harris-Dawson added.

I am honestly baffled by this attitude. Some members of the council are more concerned about people who steal catalytic converters — how might being arrested affect their future efforts to rent apartments? — than they are about people whose catalytic converters are stolen — how might losing their catalytic converters affect their ability to get to work and pick up their kids from school? What will repairs cost? What might it make them think about of the effectiveness of city government? The criminals get pity. Law-abiding members of the public get an airy argument that the city (i.e. taxpayers) should help them get made whole, and a suggestion to install anti-theft devices that may not even work.¹

You saw something similar up in San Francisco last month, where John Hamasaki — a former member of the city’s police commission who lost a race for District Attorney last year — mocked another city resident who complained about car break-ins, saying “Is this what the suburbs do to you? Shelter you from basic city life experiences so that when they happen you are broken to the core?”

I would note these viewpoints are apparently minority viewpoints in both San Francisco and Los Angeles — the catalytic converter ordinance passed, and Hamasaki’s campaign for district attorney failed. But they’re not marginal viewpoints: Hamasaki, for example, got 46% of the vote. A lot of people in these cities apparently believe that crime is just a quirky city thing and that it’s unfair to punish people who commit crimes — if you don’t want your stuff to be stolen and if you don’t want to pay a couple hundred bucks for a new rear passenger window, leave the city, because this is what happens here.

You also see some crazy attitudes about disorder — see this other LA Times article, where it’s not just the subjects being ridiculous but also the reporter, who is very concerned that too-loud classical music might drive homeless people out of Westlake-MacArthur Park station, even though that’s the whole reason LA Metro was playing the music to begin with.

The paper literally describes the music as torture:

[E]levated volume, coupled with repetition, is a way that music has been used as torture throughout history, says [musicologist Lily] Hirsch. Constant exposure to loud music can disrupt sleep and thought and eventually make people lose their connection to themselves. In the 30 minutes a reporter spent in the station this week, the same piece of music was on loop — the same music was again playing on Wednesday when a Times photographer visited the station.

I wrote a few weeks ago about the choice LA faces regarding its rail transit system: Make the system clean and orderly and acceptable to commuters, or let it devolve into a horrifying and unsafe drug den (possibly with a repetitive soundtrack). One reason the city has so far chosen the latter option is that a substantial minority of Angelenos seem to think it’s the desirable one.

Very seriously,

Josh

1. “The second time the catalytic converter got stolen from my Prius, they just sawed through the steel plates I installed on the bottom of the car,” LA Times reporter Matt Pearce wrote on Twitter. “Which taught me not to own a Prius anymore.”