It’s Tuesday, the traditional day for elections and for our pause-and-consider newsletter on politics and policy. 

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LET’S TALK ABOUT THE DEBT CEILING
By Lisa Desjardins, @LisaDNews ([link removed])
Correspondent

The week after Congress averted one crisis ([link removed]) - a possible government shutdown - lawmakers appear on the cusp of navigating past another one. The two Senate leaders, Chuck Schumer, D-N.Y., and Mitch McConnell, R-Ky., have agreed on a deal in which the debt ceiling would be raised next week. And they’re now making sure they have the votes to pass it.

That timing is important.

Treasury Secretary Janet Yellen has warned lawmakers that the current debt limit means after Dec. 15, “there are scenarios in which the Treasury would be left with insufficient remaining resources” to finance government operations.

In other words, we might not be able to pay our bills. That does not sound good.

But how not good? And what exactly would happen? The good news is Senate leaders seem on track toward avoiding a debt crisis. But, never assuming an easy outcome, we thought it a good time for a little Debt Ceiling 101. Get a beverage and snack, and settle in!

What does the debt limit do, specifically? Let’s start there. Because this simple name is misleading. The “debt limit” does not limit the amount of debt the U.S. owes. That would be too easy. Instead it is a cap on how much the government can borrow. Billions in spending -- orders for planes, new hires in government, among other expenses -- still stand and accumulate. But once the limit is reached, the U.S. can no longer borrow more to pay for those bills.

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Where does borrowing fit in with our government? How much borrowing are we doing these days? We can answer with another question: How many zeroes can you get your head around? The U.S. has operated off of red ink for most of the past 100 years. Government spending has increased, both in nominal terms and relative to GDP, under the past three presidents. And then soared in these years of the pandemic. This past fiscal year, we borrowed $2,800,000,000,000 -- that’s $2.8 trillion -- to provide COVID-19 relief and keep the government afloat.

We depend on borrowing, whether there is a pandemic or not. And we’ve done so much of it for so long (while maintaining a stable, robust economy) that the world depends on us to borrow. U.S. Treasurys operate as a key foundation of global financial markets and trade.

Then what would happen if the U.S. hit the debt limit and could not borrow? The most accurate answer is that no one is certain. It has never happened. Starts typing more, is interrupted by another question …

But wait, didn’t we default in the 1970s? So this isn’t really the first time? I see, happily, that we have a few debt nerds reading here. Good question. The short answer is no. We didn’t really default in the 1970s. I’m glad to point people to one of the best-titled reports on the debt that I’ve read, “Clearing the Air on the Debt Limit ([link removed]) ,” by the nonpartisan Congressional Research Service.

The 1970s were their own brand of wild. And that includes the financial management of the country. It was bumpy. But there was no actual default. Here’s how CRS puts it: “In three episodes in the late 1970s, lapses in a temporary debt limit increase left the amount of outstanding federal debt above its limit. Those lapses resulted in no payment delays, and thus were not defaults in the ordinary sense of that term.”

Ok, so this has never happened. What do we think might happen if the U.S. defaults? Yes, let’s get back to that.

First, the macro effects. It would likely be a financial disaster, rippling across global markets. Yellen has warned ([link removed]) a U.S. default would likely trigger a recession in this country. Ratings agencies have made it clear the U.S. would see its bond rating tumble and, with it, interest rates would likely go up. Moody’s Analytics ([link removed]) wrote, “Americans would pay for this default for generations, as global investors would rightly believe that the federal government’s finances have been politicized and that a time may come when they would not be paid what they are owed when owed it.” That means in many parts of American life, including rates for home and car loans, costs would go up. Among the ironies, if interest rates rose, the price of paying for the debt itself would also jump.

With U.S. Treasurys serving as financial cornerstone worldwide, global markets would shake too.

And there are more micro, but serious governmental effects: Default is even more wide-sweeping than a government shutdown. In a default, some government programs which are normally protected from a government shutdown, like Social Security, would be at risk. There is a chance Social Security payments would not go out. As Moody’s wrote, “the economy would be upended, and even if resolved quickly, Americans would pay for this default for generations.”

A “chance” Social Security checks don’t go out? Who decides? The U.S. Treasury would decide. Whatever cash comes into the U.S. government accounts, including taxes, fees and other revenue, would be rationed out. It is not certain what the Treasury would prioritize, in terms of which debts to pay first. Some have theorized ([link removed]) that the Treasury would first pay America’s creditors. But the agency has never declared a set of firm guidelines.

This seems like something worth avoiding. Very much.

Why then is it so hard for Congress to act? On one level, there is real discomfort with the level of U.S. debt. And the debt limit is something that could be used to negotiate some spending limits in the future.

But the larger issue is cultural and tactical. In the era of sharp divides, close margins and big spending, the must-pass debt ceiling has become a major political tool. Because it usually requires a 60-vote margin in the U.S. Senate, it can be political leverage for whichever party is in the minority there.

It has become the ultimate game of chicken. A test of will power, as well as how close to real danger each party can drive public policy.

REMEMBERING BOB DOLE
By Judy Woodruff, @JudyWoodruff ([link removed])
Anchor and Managing Editor

Then-Republican presidential nominee Bob Dole addresses a 1996 rally at the MBS International Airport in Freeland, Michigan. Photo by Rick Wilking/Reuters

Bob Dole was a political reporter’s dream. A war hero who came close to death from injuries in World War II, and the lifelong son of a prairie town, Russell, Kansas. He was a sharp-tongued partisan U.S. Senator and the GOP national party chairman, who later worked with Democrats to fund food stamps and enact voting rights.

Most consequential for me, he was a passionate advocate for the ADA, the 1990 Americans With Disabilities Act, which opened the door - finally - for rights for those with disabilities. And he was a fount of one-liners. I knew when I interviewed him, I was going to come away with not just something useful, but something memorable. In the 1980s, I heard him speak at a formal dinner hosted by the Gridiron Club, a group of journalists in Washington, D.C., at a time when he was well remembered for having defended President Richard Nixon during the Watergate scandal. Dole commented that there’d been a reunion recently in Washington of three former presidents. On Gerald Ford, Jimmy Carter and Richard Nixon, Dole said, “See no evil, hear no evil, and …” (pausing) “evil.”

Pictured in this photo, taken after World War II, is Army 2nd Lt. Daniel Inouye (far left) and Bob Dole (front right) at Percy Jones Army Hospital in Battle Creek, Michigan. Both men were decorated war veterans who would later become future senators. Photo courtesy of Robert Dole Library

I can picture him now in so many conversations, holding a pen in his clenched right hand, because of those war injuries, but always focused and ready to share an insight or short witty observation. Dole told my late NewsHour colleague Jim Lehrer in 1988, when he ran for president the second time, that ambition shouldn’t be everything: “I think you have to have the drive, but you shouldn’t be driven. You shouldn’t be so obsessed with becoming president or anything else, whatever you may do, that you sort of lose your perspective.”

Bob Dole was ambitious, he ran for president a third time in 1996, but after his losses, he wasn’t bitter, he continued to give back to the country he loved. At this moment, there is something both Republicans and Democrats can agree on: Bob Dole was a great American.

THE LATE REP. CUMMINGS, CAPTURED IN PORTRAIT

By Saher Khan, @SaherMKhan ([link removed])
Politics Reporter-Producer
Jerrell Gibbs' “I Only Have A Minute, 60 Seconds In It… Portrait of the Honorable Elijah Cummings” (2021). Image courtesy of Mariane Ibrahim

An official portrait of the late U.S. Rep. Elijah E. Cummings will soon hang at the U.S. Capitol, joining just a handful of portraits ([link removed]) of Black leaders in one of the country's oldest institutions.

Commissioned by Maya Rockeymoore Cummings, the wife of the late congressman, and painted by Jerrell Gibbs ([link removed]) , a Baltimore-based artist, the portrait captures Cummings’ discerning gaze and honors his achievements, including his enduring dedication to social justice and his lifelong commitment to his hometown -- the city of Baltimore. Cummings’ was the chairman of the House Oversight and Reform Committee, and long represented Maryland’s 7th Congressional District, which encompasses a large part of Baltimore. He died in 2019 at age 68, and became the first Black legislator to lie in state in the Capitol.

Gibbs, who was selected from a shortlist of Baltimore artists, is known for his powerful and intimate portraits of Black identity and life. His depiction of Cummings was inspired by a photograph, shot by Justin T. Gellerson, that appears on the cover of Cummings’ posthumous book, “We’re Better than This: My Fight for the Future of Our Democracy.” In a study for the artwork, Gibbs initially painted Cummings flanked by flags. They were removed from the final portrait, so Gibbs could instead focus on Cummings’ “voice, his presence, his disposition, his strength,” he told The New York Times ([link removed]) .

The portrait will first be on view at the Baltimore Museum of Art from Dec. 22 through Jan. 9, before it’s later installed in the Capitol.

#POLITICSTRIVIA
By Tess Conciatori, @tkconch ([link removed])
Politics producer

Much of Bob Dole’s decades-long Senate career was shaped by his service in World War II and the injury he suffered as a result. While in rehabilitation, Dole said he listened to the same song by this classic artist repeatedly to help his morale and aid his recovery.

Our question: Which artist did Dole listen to on repeat?

Send your answers to [email protected] (mailto:[email protected]) or tweet using #PoliticsTrivia. The first correct answers will earn a shout-out next week.

Last week, we asked: Which barrier-breaking politician inspired Kamala Harris’ presidential campaign logo?

The answer: Shirley Chisholm.

Congratulations to our winners: Karin Brown and Allen Meacham!

Thank you all for reading and watching. We’ll drop into your inbox next week.

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