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In today’s edition, Congress looks at a gentler cataclysmic debt default. ͏‌  ͏‌  ͏‌  ͏‌  ͏‌  ͏‌ 
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January 31, 2023


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Steve Clemons
Steve Clemons

Watching police beat the life nearly out of Tyre Nichols, who kept crying for his mom and who died three days later from his injuries, has haunted me these last few days. It’s not just me apparently, Senators seem to have been shaken enough to discuss returning to talks on police reform after an acrimonious end over a year ago. Ideas include federal guidelines and training for police and potentially a way to hold departments liable for failures, but there’s still not much optimism they can overcome the extreme political polarization around crime and police abuse.

On other fronts, the COVID-19 era will enter a new phase in May as the Biden administration plans to end the national health emergency, which could lead to a variety of policy dominoes falling. Washington still faces a looming man-made disaster over the debt ceiling, and Joseph Zeballos-Roig has the latest on Senator Rick Scott’s efforts to pass legislation prioritizing which debts get paid first in a breach. It’s a longtime conservative idea to keep bondholders happy and give everyone else heartburn, but it may not be workable.

PLUS: Morgan Chalfant receives One Good Text from former State Department official Joel Rubin on Secretary of State Antony Blinken’s trip to Israel amidst rising violence and controversy around Benjamin Netanyahu’s new government.

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White House: Biden is spending three days this week promoting the impacts of the bipartisan infrastructure law, including a stop in New York City later today where he’ll announce $292 million in funding to finish the Hudson Tunnel construction project. We don’t have an advance copy of his remarks, but let’s just assume he makes an infrastructure week joke.

Chuck Schumer: The Senate isn’t scheduled to take any votes today, and Schumer will join Biden and other Democrats in New York.

Mitch McConnell: Will 2024 be an improvement in “candidate quality,” as McConnell put it? In West Virginia, Governor Jim Justice says he’s “very, very, very, very” interested in Joe Manchin’s Senate seat.

Kevin McCarthy: Republican leadership is claiming victory after the White House announced a scheduled end to the COVID-19 public health emergency the same week the House planned to vote on the issue. “House Republicans are making it clear that the days of the Biden Administration being able to hide behind COVID to waste billions of taxpayer dollars on their unrelated, radical agenda are over,” Majority Leader Steve Scalise said in a statement.

Hakeem Jeffries: The minority leader tapped former majority leader Steny Hoyer, D-Md. to lead the Regional Leadership Council, a new 13-member group tasked with implementing Democrats’ legislative successes from the past two years, including the infrastructure bill and CHIPS and Science Act.

Need to Know
REUTERS/Dado Ruvic/Illustration/File Photo

The horrifying death of Tyre Nichols in Memphis may be rekindling police reform talks in Congress, which previously broke down in 2021. New Jersey Sen. Cory Booker’s office confirmed Monday that he has been speaking with colleagues about legislation and Senator Lindsey Graham sounds interested. South Carolina Sen. Tim Scott, the lead Republican on the issue, said in a floor speech that he “never left the negotiating table” and blamed Democrats for not accepting his “common-sense” reforms that would provide de-escalation training for officers and more resources to departments so “only the best wear the badge.” House Democrats expect the Senate to draft and pass bipartisan legislation first in order to put pressure on House Republicans who have already signaled opposition. There’s still strong skepticism that a deal emerges given the politics at play, including a potential 2024 presidential run by Scott at a time when crime is a major conservative rallying point.

Manhattan prosecutors have begun presenting evidence to a grand jury about Donald Trump’s alleged role in sending hush money to porn star Stormy Daniels during the 2016 election to cover up their affair, the New York Times reports. Former Trump fixer turned critic Michael Cohen pleaded guilty to campaign finance violations in connection with the payments to Stormy Daniels and implicated Trump when he was president, but charging the ex-president could still be a challenge. “It seems like this might be a difficult legal row to hoe here,” Jack Sharman, a white-collar criminal defense lawyer, told Semafor. “They would need to show that the target — in this case former President Trump — actually participated in or at least knew of the falsification of the records that would have revealed the true nature of the payment.”

TikTok CEO Shou Zi Chew will testify before the House Energy and Commerce Committee in early March, his first congressional appearance as bipartisan scrutiny of the popular social media app builds due to its Chinese parent company. The company has been opening up about reorganization plans meant to increase transparency of its algorithms and allay concerns on Capitol Hill. “We hope that by sharing details of our comprehensive plans with the full Committee, Congress can take a more deliberative approach to the issues at hand,” TikTok spokeswoman Brooke Oberwetter said.

Morgan Chalfant and Kadia Goba

Beltway Newsletters

Punchbowl News: The White House plans to release its budget on March 9. Presidential budgets are basically messaging documents — they project what a president’s priorities are but are rarely passed.

Playbook: Rep. Ilhan Omar, D-Minn., who Republicans are trying to remove from the House Foreign Affairs Committee, is launching a new U.S.-Africa policy working group to focus attention on the continent.

The Early 202: Allies of Hunter Biden are talking about setting up a legal-defense fund to help him pay legal bills associated with a federal tax probe and congressional investigations.

Axios: The Biden administration is once again considering declaring a public health emergency with respect to abortion.

Joseph Zeballos-Roig

Republicans have a plan B if we breach the debt ceiling. It’d still be a disaster.

REURES/Sarah Silbiger


Republicans have been talking up an old idea to prevent a catastrophic default should Washington breach the debt ceiling later this year.

If the government suddenly can’t cover all of its bills, some GOP lawmakers argue it should simply pick and choose who to pay each day, and put bondholders first on the list, followed by other key groups like retirees.

Last week, Florida Sen. Rick Scott released a bill that would require the government to keep making payments on Treasuries, Social Security benefits, military salaries, and veterans benefits in the event of a debt limit breach.  In a statement to Semafor, Scott said the legislation would ensure the U.S. “takes care of its core obligations” while giving lawmakers the “limited time they may need to solve the problems before us.”

Rep. Jodey Arrington, the GOP chair of the House Budget panel, went further, arguing that the US already has a constitutional obligation to pay bondholders first under the 14th amendment, which says the “validity of the public debt … shall not be questioned.”

“We have to pay our creditors,” he told Punchbowl News in an interview published Friday.

Conservatives have pitched “debt prioritization” as a fallback plan during every borrowing limit showdown of the past dozen years, promising to keep bondholders whole in order to assuage fears that their hardball tactics could blow up the entire financial system.

But the idea has been criticized as an impractical and ineffective solution by both Democratic and Republican Treasury secretaries. Some top Republicans in Congress have been wary of the proposal, too.

“After looking at it, we came to the conclusion in the McConnell operation this doesn’t work — and there are essentially some political downsides to it,” Rohit Kumar, who worked as a senior aide to Senate Minority Leader Mitch McConnell during the 2011 and 2013 debt ceiling standoffs, told Semafor.


There’s good reason for skepticism. For starters, even if prioritization is feasible — a big if — it would still entail catastrophic economic damage.

Without the ability to borrow for deficit spending, the government would have to immediately cut 18 to 25 percent of its outlays, according to Marc Goldwein of the Committee for a Responsible Federal Budget. Such drastic reductions would do massive damage to the economy on their own. And even if Social Security were protected, vast swaths of the safety net — Medicaid, food stamps, housing vouchers — wouldn’t function normally.

Choosing among the government’s 80 million daily payments would also pose major logistical challenges.

Dealing with bondholders would be the relatively simple part. The U.S. could continue making principal and interest payments on the national debt through the Federal Reserve Bank of New York — as long as enough cash was on hand. A Fed transcript from 2011 showed that officials there crafted a plan with the Treasury Department to do just that.

Making sure Social Security and veterans benefits keep landing on time could be harder. It’s unclear that the government has the technical capacity to prioritize among its payments for obligations other than debt, which are handled on a separate computer system at Treasury that ordinarily schedules them to go out as orders arrive.

At minimum, it’d involve some heavy manual lifting to reprogram software that was never intended to make only some payments.  “I don’t think it’s easy to do,” said William English, a former top Federal Reserve official and now a finance professor at Yale University. He added that there’d be room for human error.

Brian Riedl, an economist at the Manhattan Institute, studied the issue in-depth as a staffer in former GOP Sen. Rob Portman’s office. He said holding back some payments and greenlighting others would strain Treasury’s computer systems. “They’re just not programmed to do that,” he told Semafor.

A bill like Scott’s is also “politically dangerous,” Riedl said, because Democrats would be able to appeal to beneficiaries of every program that didn’t make the cut in order to build pressure for a deal.

“Chinese bondholders get paid before school lunches. Chinese bondholders get paid before border security,” Riedl said. “The attack ads write themselves.”


GOP Sen. Kevin Cramer of North Dakota is among the 6 Republican co-sponsors of Scott’s bill and strongly supports prioritization. “Why wouldn’t you have a priority list? That’s what everybody that can only spend what they take in everyday does at their homes and in their businesses,” he told Semafor last week.

After Times

The White House is ending the COVID-19 public health emergency

REUTERS/Evelyn Hockstein

The White House said Monday that it is planning to end its emergency declarations tied to the COVID-19 pandemic on May 11, a step towards normalcy that could have major implications for federal policy.

Unwinding the emergency declaration will impact some major government programs established during the pandemic. Chief among them are:

Title 42: The end to the public health emergency would cut off the legal basis for a Trump-era public health order that allowed the administration to quickly expel migrants at the southern border, according to the White House. The Biden administration tried to end Title 42 last year but the Supreme Court kept it in place following a challenge from mostly Republican-led states. The court was expected to hear arguments in February and it’s unclear how the latest announcement will impact the case (it could potentially render it moot). Republicans want to keep Title 42 in place and criticized the administration for saying that an end to the public health emergency would automatically end the border policy.

Medicaid: In March 2020, the federal government stepped in to boost funding for Medicaid, make it easier for people to sign up, and prevent states from removing them until after the pandemic passed. Thanks in part to the policy, the national uninsured rate hit an all-time low. But last year’s bipartisan spending package already began winding down the pandemic-era guidelines and their accompanying funding. The Kaiser Family Foundation projects that anywhere from 5.3 million to 14.2 million people will lose their coverage in the year following the emergency declaration’s end.

Student loan forgiveness: Ending the pandemic-era emergency removes a big plank of the Biden administration’s legal rationale for the student loan repayment pause, nearing its third year. The White House previously said the loan moratorium would end on June 30. Meanwhile, the loan forgiveness program is frozen and its fate rests on a decision from the conservative-leaning Supreme Court. Republicans were planning to vote on their own legislation to end the pandemic emergency this week, in part because they argued it was being unjustly used to promote the White House’s education policy. The Biden administration came out against it on Monday.

Joseph Zeballos-Roig and Morgan Chalfant


One Good Text...with Joel Rubin


Monica Guardiola has been promoted to deputy executive director of the Democratic National Committee and will serve alongside Deputy Executive Director Roger Lau. Guardiola will be the first Latina in the position and has worked for the DNC since 2020. She previously held the title of chief operations officer at the DNC and served as deputy general counsel for Hillary Clinton’s 2016 campaign.

Kadia Goba


Stories that are being largely ignored by either left-leaning or right-leaning outlets, according to data from our partners at Ground News.

WHAT THE LEFT ISN’T READING: Texas Gov. Greg Abbott announced plans to tap a state “border czar” for the first time to help address illegal migration.

WHAT THE RIGHT ISN’T READING: Former New Jersey Gov. Chris Christie said he doesn’t think former President Trump can win a general election.

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— Steve Clemons