Showing posts with label #BidenAdministration. Show all posts
Showing posts with label #BidenAdministration. Show all posts

Tuesday, May 16, 2023

America's Debt Dilemma: Hitting the Ceiling.

"The Republican Elephant."
Thomas Nast, 1874.

The Economist this week writes about America's continued struggle with the debt ceiling. As Congress and the White House continue to negotiate, America is in danger of defaulting on its debt in a few weeks, with neither Republicans nor Democrats willing to compromise. The Treasury could bypass the debt ceiling by minting a colossal commemorative coin and depositing it into the government's account at the Federal Reserve, which would allow for the payment of government expenses without borrowing from public markets. The Biden administration has a few options including invoking the 14th Amendment and issuing high-coupon low face-value bonds, to bypass the debt ceiling and resume borrowing. 

Despite the risk of litigation and the potential for market disruption, the possibility of brutal austerity as a workaround for Treasury debt payments has pushed policymakers to consider unconventional, yet ingenious plans. Treasury officials are uncertain of their ability to implement prioritization of payments and regularly sell bonds in order to pay off their debt, and if dealers decline to participate, the whole plan could be thrown into jeopardy. Faced with the risk of default, prioritizing payments to bondholders may be necessary to get both sides to reach a deal, but could have big costs. However, as almost every observer has noted, the world's biggest economy should not be managed in this manner. 

I've written previously on this, noting that the Biden administration's exploration of using the 14th Amendment to challenge the current federal borrowing limit has prompted heated debate among economic and legal advisors. Meanwhile, Kevin McCarthy is facing his first major test in leading the House of Representatives in Congress' negotiations to lift the debt ceiling, a controversial issue that requires bipartisan compromise while weighing both fiscal responsibility and the need for austerity. The ripple effects of the rise of the far-right within the Republican Party have left lasting damage to both faith in the political system and the party's overall stability. The rising tensions within the Republican Party over the debt ceiling are making it increasingly difficult to present a unified stance. To move ahead successfully, the Republican Party must find ways to address the factors contributing to its internal divisions and disarray.

Saturday, May 6, 2023

Protecting Communities: Addressing Toxic Chemical Releases.

ExxonMobil's Baytown, Texas Refinery.
© 2008 Baytownbert.

In an article by Eric Lipton in today's New York Times, the Biden administration's efforts to curb health threats caused by toxic chemicals from petrochemical plants are discussed. As the debate surrounding these health threats intensifies, families living near petrochemical plants, like the López family in Deer Park, Texas, are directly affected. The Biden administration is aiming to impose restrictions on toxic air releases and ban or restrict some of the most hazardous chemicals. However, companies are pressuring the administration to loosen some of the rules, fearing economic repercussions.

Toxic chemical releases are happening regularly in the Deer Park area, sometimes without notification to residents. The Environmental Protection Agency (EPA) is cracking down on carcinogens released by plants such as the OxyVinyls plastics manufacturing plant across the highway from the López family. Over the past two years, records show the release of numerous toxic chemicals in the area, including some the Biden administration is preparing to impose new restrictions on.

As I reviewed this article, I recalled the German legal principle of "Vorsorgeprinzip," or the precautionary principle, that analytically should play a significant role in addressing the issues surrounding toxic chemical releases. This doctrine emphasizes the importance of taking preventive measures when an action or policy has the potential to cause harm to the public or the environment, even when scientific evidence is incomplete or inconclusive. If the Vorsorgeprinzip were applied to these chemical plants, it would require proactive action to minimize potential health risks and environmental damage.

In light of the precautionary principle, the EPA's proposed policies, that aim to remove a loophole that allows toxic chemical discharges during bad storms, plant malfunctions, or start-ups and shutdowns, are clearly warranted. The EPA also plans to require many chemical plants to monitor air at their fence lines for six key toxics to ensure compliance with the rules. By taking a more preventive approach, these policies aim to protect residents like those in Deer Park from potential harm.

Recent studies have shown that about 100,000 people living within six miles of chemical plants, mostly in Texas and Louisiana, have an elevated risk of cancer. In Houston, a separate study found elevated levels of formaldehyde, which can increase the risk of developing cancer if the levels persist. Another study found a 56% increased risk of acute lymphocytic leukemia among children living within two miles of the Houston Ship Channel compared to those living at least 10 miles away. Under the Vorsorgeprinzip, these findings warrant immediate and decisive action to reduce the risks posed by these plants.

Implementing the precautionary principle in addressing the issues surrounding petrochemical plants would lead to more stringent regulations and proactive measures to protect public health and the environment. While this approach may result in higher costs for the industry, it prioritizes the well-being of communities like the López family and others living near these facilities.