It’s Time To “Allocate” Mr. President-Elect

For crying out loud, Mr. President-Elect. During your first time at the plate you didn’t accomplish the worthy purpose of producing the most conservative Supreme Court of modern times solely so that it could write Dobbs and thereby return the regulation of abortion (or not) to the states where it properly belongs. You actually have a court that will surely allow you to exercise the rational and urgent action of requiring the Federal government to live within its means.

We are referring, of course, to the presidential authority to allocate Federal revenues on a priority basis if the latter falls short of scheduled expenditures and there is no available headroom under the public debt ceiling for the US Treasury to borrow in order to cover the shortfall. And with the impending expiration of the current debt ceiling suspension on January 1st that’s exactly what you will need to do from the very first hour you return to the Oval Office.

So, please, do not under any circumstances capitulate to the Swamp Creatures and embrace a debt ceiling increase, thereby requiring your GOP congressional rank-and-file to walk the plank to vote for more open-ended borrowing on top of the $36.5 trillion public debt that will be in place by year end. The GOP has done the Swamp’s dirty work too long, and, besides, you were elected to drain it, not nourish it with more IOUs.

Needless to say, the minute you move to allocate the incoming revenues to debt service payments and say social security benefits, Veterans support and critical national security operations while cutting back or deferring everything else, you will get the Swamp’s attention with respect to the urgent matter of entitlement reform, spending cuts and fraud, waste and inefficiency removal like no president has every done in our lifetime.

Of course, the Swamp Creatures will first scream default, default, default! But that’s complete baloney and by taking decisive action to rationally allocate revenues in the absence of a debt ceiling increase you can make it abundantly clear that Washington has no choice except to finally bite the bullet on the nation’s runaway public debt.

For one thing, the current cash balance in the Treasury’s TGA account at the Fed is $800 billion, which would be enough to cover interest payments averaging $100 billion per month well past mid-year. So adroit use of the allocation power should eliminate any possibility of a short-term upset in the bond markets.

As a practical matter, the current $800 billion cash balance should be held in reserve and metered into current funding applications on a cautious basis in order to buy plenty of time for negotiations with Congress over the sweeping entitlement reforms and defense and nondefense appropriations cuts which are urgently needed. Thus, perhaps $100 billion per month could be released from the TGA account for current payments.