Bloomberg: One Neat Trick to Raise the Debt Limit

I spoke to Bloomberg’s Josh Green about the debt limit fight, public opinion, and the political implications of potential executive action to avoid default.

In Washington, insiders have started taking the idea semi-seriously. “I think it’s not gotten enough attention,” says Liam Donovan, a Republican lobbyist and debt-ceiling expert. “If you look at the White House position, they kind of have to be prepared to act unilaterally or they’re setting themselves up to look pretty foolish. It’s a ‘break glass in case of emergency’ answer.”

Still, there’s an argument that Biden just minting the coin and taking heat for it would be the best outcome for everyone—including Republicans, who can’t even agree on a ransom demand. “If Biden were willing to take the debt limit off their plate and spare them from taking a painful vote (and/or a humiliating L), that’s just as well,” Donovan says. “Unilateral action by the administration also puts them back in their comfort zone, where they can push back on the White House’s fiscal recklessness and constitutional overreach, a small political price for Biden if it ends the charade once and for all.” Criticizing Biden is the Republicans’ safe space. Minting the coin would also let future Republican presidents off the hook since, like the Wicked Witch in The Wizard of Oz, killing off the debt limit would rid the country of its decades-long reign of terror.

Read the full piece here.

As I told Josh and laid out in my debt limit explainer, I don’t believe minting the coin would be the preferred option of the administration, but unilateral action is a key variable that has not received nearly enough attention. Indeed, Biden’s appetite for confrontation with Republicans likely hinges on his willingness to pursue such a go-it-alone strategy, even as a last resort.

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