Debt Ceiling, Meet Domestic Forever Wars

Joe Biden proclaimed to the nation that “I was not going to extend this forever war,” referring to the tw0-decade campaign in Afghanistan. To some, the episode brought less apparent benefit to the nation as opposed to the defense, consulting and speaking-circuit class. The opposing army is now implausibly regarded as partners in the evacuation of Americans. Yet even now it may not be prudent to believe the overseas adventures have actually ended given sticky presidential authorizations to use force.

But futile trillion-dollar military and nation-building campaigns, and even the old-school “Wars” on Drugs and Crime, just scratch the surface. The real “Forever War” story is the bouquet of domestic ones that Biden and congressional allies are waging in 2021 that will mean unprecedented spending on and regulation of American’s daily lives, in perpetuity.

Biden’s American Rescue Plan already passed in March. If fulfilled during September’s hectic legislative calendar, a trillion-dollar bipartisan infrastructure package, plus some iteration of Biden’s American Jobs Plan, American Families Plan and “build back better” $3.5 trillion amalgamation will represent the fulfillment of a grand domestic “Forever War” declaration, an achievement that its proponents chillingly call a “generational transformation.” This fusion of long-sought progressive pet programs will sideline the remnants of limited government and engage autopilot on spending and regulation in pursuit of big infrastructure, big mass transit, big climate, big renewable energy, big “homeland security,” big cybersecurity, big health care, and most prominently, big-time healthy-adult dependency on government not just during crisis but boom times.

Domestic Forever Wars can perhaps best be defined as spending and creation of federal power centers where there's no intention to actually solve a crisis or a problem, but to enrich the bureaucratic and contractor class and create vast amounts of make-work. Victory will never be declared. The most prominent motivator today is the establishment of able-bodied adult dependency on government and all the spending, social regulation and surveillance that the endless pursuit of an unattainable "equity" this and related pursuits will entail.

Indeed the Biden legislative “triad” and sloganeering seem to epitomize the pursuit of a custodial administrative state and social regulatory interventions. These are reinforced in executive orders such as those on minimum wage increases for contractors; nondiscrimination on the basis of gender identity or sexual orientation (including the creation of a White House Gender Policy Council); racial equity and support for underserved communities; diversity, equity, inclusion, and accessibility in the federal workforce; and refugee resettlement and "Planning for the Impact of Climate Change on Migration."

Virtually every part of the federal bureaucracy now has an iron in the “build back better” fire. The Environmental Protection Agency just this month issued an astonishing, paternalistic press release on the “disproportionate impacts of climate change” and how "the most severe harms” “fall disproportionately upon underserved communities." This is hard to take for somebody whose Dad grew up in a house with no toilet, tub, shower or running water apart from a single sink in what could loosely be called a kitchen. Yet the EPA proclamation happened within a week of over 200 medical journals calling climate change the “greatest threat to global public health,” a claim dutifully and uncritically reported by the likes of the New York Times and NPR.

So the political class can count on media support of domestic Forever Wars, whether in never-ending pursuit of lowering the temperature or keeping us all equal. Emblematic of the times is that all this this new “spendulus” is demanded even in the face of the rumblings of inflation, and even as recovery — economically and health-wise — is arguably already well underway if government can keep its hands to itself.

Naturally, intra- and inter-party squabbles are underway over the way to fuse the bipartisan infrastructure package and Biden’s $3.5 trillion amalgam given a looming government funding deadline and need to raise the overall debt ceiling, a default on which will cause big problems in October. Senate finance committee chair Ron Wyden (D-Oregon) called what is seen as Biden’s signature package a “heavier lift” than the earlier American Rescue Plan. Sen. Joe Manchin (D-West Virginia) is allegedly insisting upon holding the price tag of Biden’s agenda down to as little as $1 trillion, but this is theater as far as big-picture progressivism is concerned. Even if Manchin taps the brakes, the foundations of these new domestic Forever Wars will be solidly anchored if Republicans fail to derail the whole works. While Manchin will be a media distraction and Beltway sensation as such things go, it makes no substantive difference if progressives only get half the dollars in 2021 but 100% of Biden’s "human infrastructure" concrete is metaphorically and philosophically poured.

This is the environment within which Republicans contemplate compromise with Democrats on so-called infrastructure, in a nation already $28 trillion in the hole. They’d best beware; Democrats’ imperative now is to get Republican fingerprints on the debt limit increase, despite McConnell's pledge letter with 45 other Republicans warning they wouldn’t play ball and help with the increase where Democrats insist upon their spending agenda. A showdown is being engineered, but Democrats can combine their $3.5 trillion package with the debt ceiling increase without a single Republican vote in September 2021 using the same reconciliation processe mechanics to avoid a supermajority requirement that they used to pass the American Rescue Plan back in March. They can do it alone, but the Treasury Secretary’s is likely to have their back on blaming Republicans anyway.

Whatever happens during the showdown, Democrats likely suspect that, just as the old promises to repeal Obamacare won’t actually happen, they'll be able to count on Republican support of the newfangled and open-ended spending plans after a couple election cycles. It’s already largely forgotten that the gargantuan Biden spending proposal appears in the wake of House and Senate debates over a misguided bipartisan “Endless Frontier Act” on alleged science and tech investment that will amount to endless regulation instead. While there was some solid philosophical pushback on the Biden budget resolution package this summer from Sen. Mike Lee, Sen. Rick Scott and Sen. Ron Johnson — calling it the “mother of all inflation bombs” — more typical of the caucus is Sen. Minority Leader Mitch McConnell’s fretting that Biden’s taxing and spending would “shortchange” the woke military that McConnell himself should be shortchanging.

The torrent of legislation in 2020 and 2021 represents the kind of interventions dubbed “super-statutes,” whose scale results in societal and cultural changes. While regulatory in the extreme, much of the Covid- and Biden-era intervention and distortions on top of the spending and wealth transfers, will escape the cost-benefit analysis ostensibly applied to the regulatory state. The regulatory costs of blurring government and business roles in society are incalculable. 

Indeed there’s plenty debate over trickle-down economics, but not enough over downpour spending and regulation. In this year marking the 20th anniversary of the 9/11 tragedy and the launch of the forever war just terminated, it’s also been 20 years since the federal books were balanced. There’s no hint of that happening again anytime soon, nor is there even interest apparent in taking obvious steps like “withdrawing troops,” so to speak, from the domestic grant programs now topping $700 billion annually and leaving the dollars in the states, and shrinking the federal enterprise that way. Be that as it may, the economic recovery imperative that makes even the likes of Manchin nervous imply that now is an appropriate time to reckon with Washington’s regulatory tentacles with a growth by deregulation alternative to domestic Forever War spending.

It’s a tall order, but, on the other hand, regulation is the “other national debt” and addressing it can contribute to easing today’s fiscal problems as well as, to borrow a phrase, build back better without the destruction inflicted by futile domestic social regulatory war footings. A major recent implementation of that notion, now obliterated, was former president Donald Trump’s efforts to roll back regulation to ease pandemic coping and recovery.

It’s still not too late for Republicans to scrap the bipartisan infrastructure error that remains a pillar of the misguided September spending agenda and replace it with deregulation such as breaking down of the regulatory silos between infrastructure sectors artificially sustained by bureaucratic agencies, privatization of government programs, abolition of antitrust, and other liberalization to maximize the private sector’s freedom to build new infrastructure wealth and jobs. Everything happening in 2021 creates new strings and regulations instead.

Capping federal spending is important, but so too is capping private regulatory compliance spending. Granted, cutting rather than growing regulation is just as much a non-starter as spending restraint under Biden. Nonetheless somewhere there needs to emerge stirrings of a movement, not for domestic Forever Wars benefiting the Washington “generals,” but one that enables Americans to help themselves and their families to flourish independently of Washington in daily livees, and to provide for their own secure retirements and health care and to pass down intergenerational wealth instead of intergenerational federal debt. Among those still carrying the torch is the aforementioned Sen. Rick Scott (R-Florida) with his "Unnecessary Agency Regulations Reduction Act to “reduce burdensome government regulations and more efficiently dispose of outdated, duplicative or unnecessary agency regulations.” This bill would have OMB compile an inventory of major regulations planned, take into account the Government Accountability Office’s (GAO) assessment of unnecessary duplication, and engage Congress in the task eliminating multiple executive branch regulations simultaneously via joint resolution.   

While insistence on a balanced budget in exchange for debt limit concessions is also a dead letter, steps in that direction need to be part of the discourse. In the current debate, it is worth recalling an idea proposed by Sen. Mike Lee (R-Utah) and then-Sen. Cory Gardner (R-Colorado) back in 2017 dubbed the Reducing Excessive Government Act (or REG Act). A regulatory bill that uniquely addressed debt limit increase concerns, the proposal would have made debt ceiling increases contingent upon proportional cuts in regulatory costs. The REG Act stipulated that for any debt limit increase or suspension, the "direct cost of Federal regulation" must be cut by at least 15 percent over the subsequent ten year period. According to a one-pager at the time, for example, if "Congress raises the debt limit by $1 trillion, the REG Act would require a reduction in regulatory costs of $150 billion."

The REG Act would have instructed the aforementioned GAO to report on which rules cost the economy over $100 million annually. Congress would take that information into account in consideration of a package of cuts that would be privileged and voted on via an expedited process. Importantly, if the rule cuts don't pass, a "snapback" would tamp down the debt limit increase, freezing things, thereby forcing the issue of regulatory cuts.

Moves like the REG Act are vital, but only for when and if a return to normalcy occurs. Doing it now, not that it matters since the bill never passed, would be out of the question since it would enable rather than halt the grand domestic forever war schemes underway, putting greasy Republican fingerprints all over an unprecedented underlying escalation of government’s scope. Separately, Sen. Lee already had for years sponsored the most prominent "regulatory budgeting" proposal to limit agency compliance costs affecting the private sector. So the makings for sanity are out there when their time comes.

I noted how Biden's legislative triad, the infrastructure package, and build back better are all blurring together. The same may occur with the overseas and domestic planks of Forever Wars. When all is said and done, the Pentagon hasn't lost anything leaving Afghanistan because it agrees with the rest of the progressive cohort that climate action is of paramount importance and has declared climate change a national security priority.

If the progressives won’t stop not wasting crises, as the cliche demands, they need to be forced to. It took decades to pull out of an overseas Forever War. This year will show whether we can avoid declaring destructive new domestic ones. Spending hundreds of billions now on infrastructure and new domestic campaigns heedless of the consequences of creating a vast custodial administrative state will impoverish our descendants, robbing them of wealth and resilience, and make them far worse off when the next crisis or economic shock hits. That’s bad for America and Americans, but good for the domestic Forever War agenda.