The Bulwark Podcast - Catherine Rampell: Psychotic Feral Cats with Machetes

Episode Date: January 20, 2023

Republicans are back to extortion and holding the debt ceiling hostage after adding $4.7 trillion to the deficit during the Trump years — and that was before the pandemic. Why risk financial market chaos? Catherine Rampell joins Charlie Sykes for the weekend pod. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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This message comes from BetterHelp. Can you think of a time when you didn't feel like you could be yourself? Like you were hiding behind a mask? At work, in social settings, around your family? BetterHelp Online Therapy is convenient, flexible, and can help you learn to be your authentic self, so you can stop hiding. Because masks should be for Halloween fun, not for your emotions. Take off the mask with BetterHelp. Visit Better Charlie Sykes. It is January 20th, 2023, which means that we are two years to the day from that moment when Donald Trump walked out of the White House and got into the helicopter and said, hey, have a nice life. Two years into the Biden presidency, two years to the day from the

next presidential inauguration. Okay, so we may get to that. Also, I have to say that at the end of the week, I am feeling a little bit grateful. Normally, at the end of the week, we're feeling exhausted and burned out. But I have to say that the news gods have been very, very good to us this week. I mean, at the beginning of the week, if you would have said, okay, well, what if we have a story that. But here we are. Obviously, we're also at the precipice of a debt ceiling fiasco catastrophe, but I'm our guests that the microphone is in fact on in case there was any doubt about this. So Adam Kinzinger was on the podcast a week ago and he was on Stephen Colbert last night. And Stephen played a cut from what he described as a podcast. It is the Bulwark podcast, but this is how it went. And so watching him have to, have to, you know, struggle a little bit. Yeah. I'd say there was a little part of me that kind of enjoyed that. Yeah. And, and you have never been that soft spoken. You speak your mind. You're pretty frank,

but you recently, I think this was just last week. Um, you said this on a podcast. Um, you had some choice words about, words about the new speaker, Jim. Kevin's a piece of s***, and let's just be honest about this, because he will say whatever he needs to say to stay in power. I'm not even saying that gratuitously to be mean to him. It's just a fact. I didn't know the mic was on. Just to be clear, you said that after you left office, right? I did. Okay. So I have to say, we usually don't get that kind of applause when we actually do the podcast.

So a fair warning to today's guest, Catherine Rampell. Thank you for coming back on the podcast. My pleasure. Thanks for having me. Catherine is a syndicated opinion columnist at The Washington Post. She is also an economic and political commentator for CNN, a special correspondent for PBS's NewsHour. All right, so we got to talk about the reality check that's looming out there. Biden administration has already begun extraordinary measures to prevent the federal government from

breaching the debt limit and hurtling toward default. Treasury Secretary Janet Yellen is saying that officials are going to change certain federal investments to preserve the nation's credit until summer. Catherine, I enjoyed your column earlier this week. Can I just read a little bit of it? Go for it. Okay. Breaking scientific news. Researchers have identified a previously unknown Go for it. Okay. Breaking scientific news. Researchers have identified

a previously unknown species in D.C. Like cicadas, this species stays underground for years at a time, typically in four or eight year intervals. Its members hide until there is an auspicious change in the ecosystem. Then they bust out and wreak havoc. This species, Republicans who care about deficits. It's the truth. Catherine, it is amazing watching all of these born-again deficit hawks. So can we just give a little bit of reality check about all the Republicans who are saying we have to take dramatic efforts because we care so deeply about the debt. Yes, the actual fiscal track record of Republicans seems to have been somewhat memory holed by much of the media at this point. So just to recap, under former President Donald Trump in his first basically three years, he signed into law new debt totaling $4.7 trillion. By new debt,

I mean debt above and beyond what the government was already kind of on track to borrow. And those listening might assume that that was all tax cuts, because obviously, despite the claims that tax cuts pay for themselves, the Trump tax cuts, the Tax Cuts and Jobs Act from 2017 did not pay for itself. But in fact, only about half of that new debt signings the law in his first three years was from tax cuts. The other half was from additional spending. And the reason why I'm saying three years rather than four is that none of this takes into account COVID-related spending. If you add in the additional emergency measures, fiscal relief, fiscal stimulus passed after COVID hit, it's several trillion dollars higher. But, you know, I put that in a different category because there was this global emergency. The other stuff we're talking about, despite alleged concern for fiscal responsibility, was, you know, as the economy was good. And for some reason, very few Republicans decided to raise their voices and complain about the fiscal profligacy of Congress when Republicans

were in charge. And particularly when Donald Trump, who himself, those listening may recall, said something like, I love debt. Well, he was the king of debt, right? Didn't he describe himself? Yeah, I am the king of debt. Yes. So in a way, like, we should not have forgotten this, and yet somehow we have. And I just find it very frustrating that Republicans are kind of taken at their word when they go on these cable news shows and complain about their very serious concerns over federal debt, federal deficits. And that's why we need to hold the debt ceiling hostage. We can get into like whether holding the debt ceiling hostage would actually remedy any of these things. I think, in fact, it would make it much worse. But, you know, if you want to ask about their motivation, I mean, I think it is incredibly questionable. And yet they get

very little pushback about it, which I find very frustrating. And as you pointed out, the debt limit was raised several times with very little fuss and none of these, you know, make or break conditions, right? I mean, they voted to go along with all of this. It was not an issue before the election. Correct. It was not an issue while Trump was president, and it should not have been. It should not have been then. It should not have been now. The problem is that it's a really confusing concept, the debt limit, because it sounds like you're talking about taking actions to create new debt, you know, like to authorize new spending or new tax cuts. That's not what it's about. It's a backward looking thing. It's basically the debt limit is about paying off bills that Congress has passed, have already authorized through their past spending

and tax decisions, which is not an intuitive thing. Like, why does this happen? Why do they need to go through this extra step of raising the debt limit when they've already made choices that will increase the debt? It's not intuitive. It's very opaque. And that's part of the reason why demagogues are able to take advantage of it when it suits them. When it's helpful to complain about the debt, they can be like, oh, we got to do this thing. But really, it's completely separate. It's like taking an unrelated hostage. You know, I wrote something recently saying, if Republicans threatened to blow up the Washington Monument unless social security cuts went through, like everybody would be like, well, obviously you don't negotiate on those terms.

Like, you know, reasonable for Biden to say, we're not going to negotiate with terrorists. That's basically what's happening here. But it sounds like, oh, well, it's not the Washington Monument. It's the debt ceiling. That seems like it's related. It's not. It's not. It's really not. And remind it again what terrible public policy it is that we actually have to vote to raise

the debt ceiling. It is completely artificial. It is a self-inflicted, you know, act of hostage taking. Your thoughts on this? I mean, we've been doing this, what, since 1917, that we have to have these votes normally in normal times. It's just sort of ritualistic and they just go ahead with it. But the fact that you spend the money, you borrow the money, but then you have this thing, this law that requires you to have a vote that empowers the most reckless members of Congress

to hold the entire economy hostage. I mean, the whole exercise seems pointless to me. What do you think? Yeah, it is pointless. Whatever purpose it once served, which as I understand it, and maybe historians out there can correct me, but my understanding is that the debt limit was initially created to make it easier, in fact, for government to borrow. Because I think, you know, while we were engaged in war, it was kind of annoying that Congress had to pass a law like authorizing specific denominations of debt. You know, like you can sell this many treasury bills and this many bonds or whatever. And I said, whatever, we're just going to like let the executive branch decide how it wants to raise this debt and they can do it. And it was at the time, the intention was to have fewer frictions, I guess, to make it

easier for, again, Uncle Sam to pay off on debts already legally owed by borrowing. And now it's this vestigial thing that serves no purpose except to occasionally be held hostage. And this is why most other countries do not have an additional vote that needs to go through to confirm the borrowing decisions that have already been made. Again, it makes no sense. It only exists so that there can be these periodic brinksmanship crises and extortion, essentially. And I've been advocating, among others, for years that we should just get rid of it. Unfortunately, nobody listens to me. So there you go. Okay, we're also now hearing from folks who are saying, look, don't sweat this. It's not as bad as it sounds. I was actually on a show

yesterday right after, you know, former Senator Pat Toomey, who's one of the quote unquote grownups in the Republican Party, he says, no, no, no. If we, you know, don't, you know, extend the debt ceiling, it's not going to lead to default. It's, you know, everybody needs to calm down about this. His argument was that the Treasury Department can continue to pay the interest on the debts by just moving money around. It would be a conscious decision to default on the debt. And there's more than enough tax revenue flowing in to pay the interest payment. So I want to get your take on this. How alarmed should we be by this? Because we're going to get a lot of spin, particularly from Republicans in the House, that we are not terrorists. We're not actually blowing up the economy, this is manageable. So where should our freak out meter be? No, I think this is very Pollyannish, the idea that it'll be super easy for Treasury to prioritize payments. And, you know, Treasury can

just decide, okay, we're going to pay off the bondholders, but we're not going to pay off the food stamp recipients or whatever. I mean, first of all, that's not how it should work. Like if Congress has made a promise to pay military members salaries or hospitals that treat Medicare and Medicaid patients or whatever, like they should make good on those debts. But in practice, I'm not even sure that they could decide. Certainly when the Obama administration looked into this, because again, we've been through similar crises before, they determined that it was not feasible. But even if it were, I still think it can lead to mass financial market chaos because we still look like a basket case. You know, we look like a country that can't keep its fiscal house in order, that cannot make good on its IOUs. Maybe we make good on the IOUs to the bondholders, if you think it's practical to prioritize the bondholders. But, you know, we still don't look super reliable. And you may not have as much of a blow up as you would if we defaulted on everyone simultaneously rather than only some people.

But it's still not good. Part of the reason why the dollar is the global reserve currency and why the U.S. has historically been able to borrow so cheaply is that we are seen as a reliable borrower, that we make good on our payments, we are a functional democracy, we know that when we promise to pay somebody back, we do it. Not all countries are good for, you know, their word is not as trustworthy as ours is. And at the point where you call all of that into question, it's hard to predict how much damage you might cause both in the near term and in the long term about how easy it will be for the United States to borrow going forward. Will creditors demand higher interest rates because we are no longer seen as the safest of safe places to store your money because maybe we'll pay you back and maybe we won't. Maybe, you know, we'll be like the United States and maybe we'll be like Greece.

Like, who knows? Maybe we'll have to write down our debt. For those who are professing concern for the country's fiscal health, this, you know, cuts in exactly the wrong direction. Because over the long run, if you degrade our credibility when it comes to our ability to pay debt, that makes it more expensive for us to borrow, which adds to our debt, right? It's like the same thing, like if you get a mortgage on a house and you have to pay a higher interest rate because you're seen as a riskier borrower, you know, that's more expensive. So it's bad news for the United States and potentially for the global financial system. Because like I said, we are considered the safest of safe places to put your money. And then every other asset on earth essentially is benchmarked against us, like how much riskier are they than us. And if now suddenly we change the benchmark and everything

starts looking more risky, like you can imagine that there'll be sort of these knock on effects throughout other kinds of financial markets as computer systems are reevaluating the levels of risk. And we just don't know the extent of it. But you know, it'd be bad for us to be bad for the global financial system. I'm worried about a recession. I'm worried about the potential for a financial crisis. I don't know that they're inevitable. But why are we even toying with the possibility needlessly? So the conventional wisdom, I think, and you correct me if you have a different view of this, is that, okay, there's going to be this back and forth, this posturing, this performative politics of fiscal conservatism, but in the end, there's no way that the United States would actually default on the debt. Or to go back to your analogy, they've taken hostages, but nobody

thinks they'll actually kill the hostages. Nobody thinks they would really blow up the Washington monument. Because in the past, as heated as the rhetoric has been, calmer heads prevail. But what if it's different this time? That's what I'm worried about. It's true. We have had this brinksmanship before, and it has been resolved at the last minute. And I think that's why you see financial markets today not freaking out yet. That there is this assumption that, ah, you know, there's a bunch of Washington blowhards, and we've been through this song and dance before, they'll work it out. Right.

I am less convinced that that is a safe assumption this time around, because the Republican Party has just gotten a lot crazier, you know, since the last time we went through this. And before, you know, there were like a couple of thorns in the side of the so-called grownups in the party who were demanding various kinds of ransoms in the side of the so-called grownups in the party who were demanding various kinds of ransoms in exchange for their vote. Now there are a lot more of those people. And beyond that, I mean, we've already seen that McCarthy struggles to lead his caucus. In fact,

you know, went through however many, 15 votes or whatever it was to become the leader. He's better at following the caucus than leading it, right? Right. And this is a really difficult exercise of like having to herd all of the cats. And some of these cats are like psychotic cats, you know, they're feral cats, whatever, whatever analogy you want to use. He's going to have to herd all of these cats to get them to like not accidentally blow up the global financial system. And I am less convinced that that's a sure bet this time around than it was in the past. I hope, you know, several months from now, if somebody comes back and listens to this podcast, they'll be like, oh, she was too alarmist,

like nothing to worry about. That would be great. I would love to be, in retrospect, seen as too pessimistic about this, but I'm really worried that without financial markets freaking out, in a sense, like, lawmakers are not getting the signal that they need in order to get this done. And, you know, there's this alternate legislative route called the discharge petition that is supposed to be like, oh, this is the plan B, you know, in case we, in case things go to, yeah, go to hell. That's the other way we can raise the debt limit. I won't get into all of the rigmarole of that, but it is a really time consuming process if that is their backup plan and they would kind of need to start on it now. So again,

without these signals from the market, without, you know, more widespread sounding of the alarm that this stuff needs to get done, I'm not sure they'll have time to get it done. And we don't want to be in this situation. I mean, this is the problem with Kevin McCarthy. I mean, Kevin McCarthy is, you know, to go back to your analogy, he is surrounded by psychotic feral cats. And so far it's been, you know, nice kitty, nice kitty, you know, can I give you some more milk? The moment that he sits in a room with Joe Biden and with Mitch McConnell and Chuck Schumer and comes up with a compromise, those psychotic feral cats are going to eat his face. Yeah. This metaphor is getting even more graphic. I love it.

Well, it is. I mean, think about it. I mean, this is the problem. He's created this scenario where the psychotic feral cats know they're in charge. They know they own Kevin McCarthy. They are not going to go along with any sort of a compromise, and they will be all over him the moment he compromises. So this is why this might not be the same as in the past. And the markets at some point are going to go, okay, wait, let me open up the newspaper and look at who the faces of this Republican Party are right now and whether I really want to trust my livelihood and the future of the economy on the good judgment of Marjorie Taylor Greene, Matt Gaetz, and George Santos. Yeah, I don't know. I mean, look, the market knows more than I do. Maybe they understand better that this will get resolved.

But I worry that there's a little bit too much complacency because it's been resolved in the past. And the past is really not a great predictor of the ongoing negotiations because the composition of the party is different. The circumstances are different. My other frustration with the way a lot of this stuff has been covered in the media, like I understand, like I said, the debt ceiling is not intuitive. It doesn't make a lot of sense. Like I get why the general public is confused about what it does and doesn't do. I feel like there should be a different standard for those of us in the media, whose job it is to understand this, you know, archaic stuff. But, you know, one frustration that I've also had

is that I feel like Republicans have been kind of laying the groundwork to blame Democrats if we default on our debt, because there's this narrative like, oh, well, Democrats just need to negotiate. Why won't they come to the table and negotiate? Biden is being unreasonable by not negotiating. And it's like, no, this is where I wanted to go on this, because the big question now is, should the Biden White House and the Democrats sit down and negotiate on some of these spending programs, including the entitlement programs? I mean, there's a lot of people. Well, wait, it's a divided government. You know, shouldn't you show good faith by negotiating? Well, I think they should negotiate over the budget. That's what always happens, right? That Congress controls power of the purse, and then the president has to sign or not sign the budget. And yes, they should be obligated to do that. And look, don't get me wrong. I actually do think that the United States has major long-term fiscal challenges, including related to entitlements, the structure of the entitlement system and the aging of the population, there will be a point

when those trust funds run out of money and we need to figure out some sort of changes. You know, you could do it on the tax side, you could do it on the benefit side. There are many iterations of fixes that you could come up with, most of which are not popular, which is why they haven't been attempted. But that does need to happen. My beef with all of this is that you can have those grown-up negotiations without simultaneously holding a gun to the head of the global financial system. I would love to see lawmakers and the president talking seriously about some more sustainable path for certain government programs. That would include, of course, changing the tax code probably in ways that Republicans are not happy about and

changing some spending in ways that Democrats are not happy about. I would love to see that. The problem is it shouldn't be done in the context of, well, if we don't come up with a solution in the next two months or whatever, we're going to have a global financial crisis. These are independent things. Every year, Congress is supposed to pass a budget. Every year, they have the opportunity to make changes to both discretionary spending, those are like the annual appropriations, as well as mandatory spending, these longer term programs that are set by formula, like Medicare or food stamps or whatever. So they have the opportunity to do this. Again, they chose not to do it when Republicans had unified control of government, surprisingly enough, rather than, you know, figure out how to make the Medicare

system whole for perpetuity or whatever, they decided to pass a bunch of tax cuts. And that was their prerogative. Fine. I didn't agree with it at the time. But how do you then turn around and say, well, okay, we didn't want to do all these unpopular things when we had the power to do them. But now that the other guy's in office and will take the blame for doing these unpopular things, we're going to do them. And if it doesn't happen in the next few months, then we're going to have a global financial crisis. Part of the reason why all of this is like gets so muddied is that like there are valid concerns about debts and deficits. But I see no evidence that those are being addressed in good faith. Well, and that's the question, whether these discussions would be good faith.

You actually speculated maybe, just maybe, they are not genuinely fiscally conservative at all and are just looking for excuses to damage short-term economic conditions. Are we actually dealing with people who would actually like burning it down? I think some of them would. I mean, I don't think all of them. Not everybody's trying to sabotage the economy, but I think there are some who would be happy enough to see the economy tank for whatever reason ahead of an election where Biden may be running

for a second term, or says he is, as of now. You know, we saw this when Obama was president, too. Again, that was the last time there were supposed concerns from the right about deficits and debt was when Obama was president, which then suddenly, you know, those concerns went underground like cicadas when Trump was in office. But there were a lot of people who thought part of the reason why Republicans were so fixated on austerity measures in 2011 or thereabouts was that they would benefit from having a slower economic recovery coming out of the Great Recession. It's a very cynical way to look at it. I mean, to be clear, there were Democrats, rather, who in 2019, early 2020, were rooting for a recession for the same reason. They wanted Trump to get pushed out of office. Obviously, we had a much

bigger once-in-a-century crisis that led to both a recession and global pandemic, which probably hurt Trump. I mean, I remember arguing with people on the left at the time, like you should not be rooting for a recession, you know, just because the Republicans are cynical enough to have wanted a poor economy to damage Obama doesn't mean that you should want a poor economy to damage Trump because Trump will not be the primary victim. You know, there'll be a lot of other people who get hurt, much more vulnerable people, low-income people are usually hurt the most in recessions. So this is not like a uniquely right-wing cynical thing, but I think it is more often exercised on the right, this sort of like sabotaging of the economy or willingness to sabotage the economy to hurt the other political party.

Well, you've also made the point that Democrats could have dealt with this whole debt ceiling fiasco while they had control of both houses, right? I mean, they could have neutralized this bomb, right, before the Republican Congress took office. Why didn't they? You know, I think it was so short-sighted of them not to have dealt with this last year. Partly what went on is that because there's so much confusion about what the debt limit is and what it does or doesn't do, I think they were really worried, needlessly so in my view, about misleading headlines. Democrats and Democrats alone raise the debt. Really, it's they raise

the debt limit, but it's like they raise the debt. They were worried that if they voted on it with only Democratic votes, usually it is a bipartisan exercise, although less so recently. Usually it's a bipartisan exercise. They were worried that there would be a bunch of opposition ads saying Democrats voted to raise the debt limit to whatever, you know, $40 trillion or something, and that that would be used against them. And, you know, maybe there would have been one news cycle where people were confused enough where that would be damaging, but it would have paid major dividends to like not have the prospect of this like ticking time bomb basically going off after that. So I think it was partly that. And then they could have done it in theory in the lame duck, but if they were going

to do it with democratic only votes, they would have to use this special process called reconciliation, which is really time consuming. And they had a lot of other stuff that they had left to get done during the lame duck. So they kind of would have had to have chose, this is what I was told, that they would have had to have chosen between doing the one thing, dealing with the debt limit, or all the other stuff they had to do. And now they could have done it earlier in the year, but whatever. But I mean, couldn't they have rolled it into the omnibus bill? I mean, one of the reasons why they passed that omnibus bill with Mitch McConnell's agreement was because they knew that if they didn't get a lot of things done, like for example, the funding of Ukraine, that it might hit this Kevin McCarthy roadblock. So they did anticipate

that there was going to be a certain amount of fiscal chaos and gridlock when it came to spending. Yeah. I mean, look, look, I think it was very short-sighted of them. And at the time, I remember thinking it felt like one of those horror movie tropes, you know, where you like, see the victim going into the spooky basement. And you're like, shouting, don't go down there, the guy has like a machete, and he's gonna kill you. And you're like, you idiot, why are you walking into this trap? And, you know, on the one hand, it's like very disappointing and in my view, short sighted and dumb that Democrats didn't deal with this. On the other hand, it's like, well, who is more to blame? Is it like the victim going into the basement or the guy holding the machete?

And and I would say like the maniac holding the machete is more to blame. But, you know, I don't want to victim blame too much. But, yes, Democrats definitely had the opportunity to neutralize this and did not. Let's just remember who's holding the machete. Yes. Or the time bomb, whatever, whatever weapon, you know, the feral cat. I'm getting all sorts of psychotic feral cats with machetes. Yes, exactly. I want to stick with that. Okay. So you had a piece, the GOP accidentally admits tax cuts don't pay for themselves. This is an important issue because as recently as yesterday, I heard Pat Toomey on this show that I was referencing before, when he was asked about, well, you didn't care about deficits when you passed this massive tax

cut. And of course, he gave the usual talking point that no, that didn't contribute to the deficit because those tax cuts pay for themselves because they generate so much economic growth. So how did the GOP accidentally admit that this wasn't so? Well, in their rules package, you know, talk about like arcane stuff in the legislature that most people will not pay attention to, but journalists should. In the rules package that just passed in the House, did a bunch of things that did get some attention, including like making it easier to boot Kevin McCarthy and kind of gutting the House Ethics Office and stuff like that. Did this other less advertised thing where they basically changed how they treat tax cuts versus spending. They said that if there is additional mandatory spending, it has to be paid for by cuts to other spending, cannot be paid for by raising revenue through taxes to spend an extra dollar here, you need to either raise an extra dollar to offset that or cut a dollar somewhere else so that you're not growing the debt anymore than it already is. So the new rules package said, no, you can't offset new costs with higher revenue. Beyond that, if you raise deficits by cutting taxes, that doesn't need to be paid for either

at all. So spending increases have to be paid for. Tax cuts don't have to be paid for. And the reason why this is like a tacit admission of something interesting is that why would you need to say tax cuts don't have to be paid for if you believe they always pay for themselves? There should be no circumstance in which this is relevant if it is in fact the case that tax cuts pay for themselves

through additional economic growth. In fact, they're saying that they don't. Well, this is wonky, but it's really significant because, okay, so they've changed the rules so the tax cuts do not need to be offset with any sort of savings or spending cuts in the budget. So as you wrote, they can add trillions to the debt, no problem through tax cuts. I mean, they can add trillions to the debt, no problem through tax

cuts. I mean, they just have laid this out. This is a very different approach to fiscal conservatism. It used to be, you know, pay as you go or make sure that everything is offset. Now they're essentially saying, screw it. They're not even pretending. They're not even pretending that these things pay for themselves because they're saying we don't care whether they pay for themselves or not. And they did some other under the radar stuff too, like in order to raise tax rates, they have to have, I forget what it was, a three-fifths majority vote or something like that rather than a simple majority. So basically they've made it easier to cut taxes. They've made it harder to raise taxes and they've made it a lot harder to increase

spending, which, look, if you're a fiscal conservative, I guess I understand why you may want to have some obstacles to raising spending. I don't know why that wouldn't apply for tax cuts. But if we have a recession this year, which is possible, you know, there's a relatively high likelihood of it. I don't think it's inevitable, but I think it is quite possible, even if we don't have a debt ceiling blow up. You know, there might be circumstances in which it would be very helpful for Congress to step in and provide some sort of stimulus or relief as they historically have done when there is a recession. You know, usually there's some temporary additional spending to, you know, make unemployment

benefits more generous or whatever. And now by putting these rules into place, they have made it harder to respond to poor macroeconomic conditions. They can waive the rules if they really want to. I mean, that's how you end up getting deficits higher every year because they do something to get around their own rules, even when they have PAYGO in place, as they historically have. But it's an extra obstacle. And I think that this shows what their priorities are. Their priorities are making it easier to cut taxes, particularly for their wealthier donors and corporations, and making it harder to provide support for lower income, middle income people, even when there's an emergency. Let's talk about how difficult it is to predict the future, though. And I know this is something

that you talk about a lot. And I was reflecting on the fact that this is the two year anniversary of the end of the Trump presidency and the inauguration of Joe Biden. I think we can all remember that day, January 20th, 2021. So play with me on this one, that on that day, if we were asked to predict the next two years, we would have gotten a lot wrong, wouldn't we? I mean, I'm trying to think about what I expected back then versus what actually happened. And I think my biggest surprise would be the continued political durability of Donald Trump, that Donald Trump would still be a major factor, even after every, you know, his defeat, his disgrace, the impeachment, the second impeachment, January 6th. So that would have been a surprise.

I think I also would have been somewhat surprised by the legislative successes of Joe Biden, but I wouldn't have anticipated, you know, the way the pandemic would have played out and certainly would have not have anticipated some of the things that happened with the economy. So what do you think? I mean, let's put you back, you know, two years ago to today.

If you were looking ahead, what do you think you saw coming and what surprised you? Yeah, I mean, there were a lot of things that turned out very differently than I think I would have expected. You mentioned Trump's enduring influence over his party. It did seem like there was yet another chance for the fever to break, and it didn't. You know, after January 6th, there were a number of Republicans who came out against him and then quickly got cold feet, I guess.

That has been disappointing. Biden came into office with these grand plans for expanding the safety net. I actually thought more of that was going to get through. There's a lot of stuff that's on the Democratic wish list that actually is pretty popular, things like paid leave or expanding child care, for example. And it's been disappointing that that didn't get through. But there have been a lot of bipartisan wins that I also did not anticipate, you know, on infrastructure, on semiconductors, among other things. So, you know, there were legislative successes, not necessarily in the areas that I expected. On the economy, you know, I think very

few people, myself included, anticipated, well, first of all, the persistence of the pandemic, that we would get these additional variants and that the pandemic would continue, you know, even after we, because remember early in 2021, if my timeline is right, that's when like people were getting vaccines for the first time. I think the first, first vaccinations happened at the end of 2020 while Trump was still in office. And so it looked like the light was at the end of the tunnel and we were going to have this glorious reopening. Hot Joe summer of 2021. And the economy was hot for a number of reasons, but we still had these ongoing drags from the pandemic, and that plus fiscal and monetary policy obviously contributed to inflationary pressures, which I did not see coming early 2021. And I think probably

most people who follow the economy were not anticipating either. So that has been obviously a much bigger challenge to deal with. And again, some of that is beyond the control of policymakers. Some of it, I think, was mistakes made by policymakers. But that has obviously weighed on the American psyche for the last couple of years. And maybe inflation, it does look like inflation has peaked, I hope. It's still too high. It still, I think, is weighing on consumer sentiment and things like that. But that was something that I did not anticipate. And that has shaped much of what the administration has been able to do in the last couple of years. So as of now, do you anticipate that we'll have a recession this year or next?

You know, I have found making definitive predictions is a very dangerous game. I think the chances of recession are much higher this year than they are usually. If you look at surveys of economists, I think the recent Wall Street Journal survey, more than half of economists were expecting some sort of mild recession this year. Maybe it was 60%, might have been less. I think there's a high risk of it. I don't think it's inevitable. I think the inflation numbers have come in much better than expected in the last couple of months. And that gives me hope that maybe we can avoid a recession because if the inflation numbers had been really bad and the Fed would

have to tighten even more, and that's what ultimately would probably push us into a downturn. Maybe we're in a state where the Fed can keep raising rates, but not quite as aggressively. And we get that coveted, what they call the soft landing. It's like you get rid of the inflation without putting a lot of people out of work. That would be ideal. I don't know that we're going to get there. And But I think that policymakers should be preparing for the worst just in case. And so that means things like not tying your hands so that you can't pass stimulus if you need to pass stimulus, like we were just talking about. That means things like if you are a state policymaker, probably not giving away your big budget surplus that you currently have in the form of tax cuts

right now, because you might need that for a rainy day if the rainy day is around the corner. Almost every state in the country has cut taxes in the past couple of years because they had these big temporary one-time budget surpluses related to fiscal aid and related to the reopening of the economy, a lot of pent-up demand to spend and things like that. We should not assume that that will continue. And in fact, consumer spending is already slowing. If there is a recession, tax revenues from sales taxes, from income taxes, from personal and corporate income taxes will go down, probably. And meanwhile, demand for safety net programs like Medicaid or food and housing assistance, et cetera, will go up.

Both of those things, tax revenues going down, spending going up, will be difficult for states to deal with. They should be squirreling away money for a rainy day, and instead, they're spending it because they're assuming everything will work out fine, I think. So there are a number of ways in which I think we should be preparing. We should be demanding policymakers prepare, and instead they've chosen not to. And I think we're going to see that kind of choice for some time now. Catherine Rempel is a syndicated opinion columnist of The Washington Post, also an economic and political commentator for CNN, and a special correspondent for the PBS NewsHour. Catherine, thank you so much for coming back on the podcast.

Appreciate it very much. Thanks for having me. And thank you all for listening to this weekend's Bulwark Podcast. I'm Charlie Sykes. We will be back on Monday. We'll do this all over again. The Bulwark Podcast is produced by Katie Cooper and engineered and edited by Jason Brown.