Just a few weeks into the new Congress, we’ve already entered extraordinary times in the U.S. government — quite literally.
Treasury Secretary Janet L. Yellen said Thursday that we have reached the debt limit previously authorized by Congress, leaving her department to take “extraordinary measures” to avert the government defaulting on its debt. To put that in the simplest terms: Congress now has a few months to raise the debt ceiling before those extraordinary measures are exhausted and we trigger what could be a catastrophic debt default. The deadline is expected to come by early June.
What happens from here is largely uncharted territory. And it will test the resolve of both parties — along with, potentially, the resolve of more moderate Republicans to take a stand against the ascendant hard-right wing of their party.
To be clear, we’ve seen debt ceiling showdowns before, with the biggest ones coming in 2011 and 2013. The setup then was similar to today, with Republicans trying to leverage their majority in Congress to force spending cuts under a Democratic administration. The idea is that, because of the stark costs of failing to reach an agreement, this is a rare and potent opportunity to try shrinking the government.
(Raising the debt ceiling is merely agreeing to pay bills the government has already racked up; it doesn’t actually authorize new spending. Or as GOP Sen. John Neely Kennedy of Louisiana put it this week, “If you’re going to have a party, you have to pay the band.”)
Such ploys have had mixed success.
In 2011, Republicans and the Obama administration ultimately agreed to what was known as the sequester. Effectively, it set up automatic, across-the-board cuts if the two sides were unable to reach a deal on more-targeted cuts in the future. And when the two sides were, perhaps predictably, unable to reach that future deal, the automatic cuts kicked in.
In 2013, the GOP tried again — and lost. That debt ceiling fight overlapped with a government shutdown fight, and party leaders humored the effort for a while before ultimately throwing in the towel. “We fought the good fight,” said then-House Speaker John A. Boehner (R-Ohio). “We just didn’t win.”
All told, Republicans have arguably gotten more out of these standoffs than they did using similar brinkmanship over other government shutdowns. In the latter, any spending cuts were very piecemeal. But in just about every case, the verdict at the end has been clear: Polls found that Americans blamed Republicans more for these crises than they did Democrats.
In recent years, those verdicts have understandably diminished whatever appetite GOP leaders such as Senate Minority Leader Mitch McConnell (R-Ky.) had for going down these roads.
But leadership isn’t really in the driver’s seat — a dynamic that’s arguably even stronger now than in the last decade. Hard-right House Republicans, who have shown little regard for their party’s broader political fortunes, gained key concessions in the name of giving Kevin McCarthy (R-Calif.) enough votes to become speaker.
And high on that list was leverage over the looming debt-ceiling fight. McCarthy agreed to tie any increase to spending cuts, and he also — perhaps crucially — gave the hard right more power to remove him as speaker if he doesn’t toe their line.
The House GOP’s majority is much smaller than it was a decade ago, which would seem to enable a small number of more-moderate Republicans to join with Democrats if the hard right pushes things too far. But McCarthy mostly controls what comes to the floor, and he has effectively agreed that he won’t take part in any attempt to raise the debt ceiling without spending cuts — on potential penalty of losing his job.
(There are some workarounds, including a “discharge petition,” which requires a vote on a bill if a majority of members sign on; even some Republicans are now floating it. But the process is lengthy, seldom-used — and it might be difficult to get even a small number of more-moderate Republicans on board, given how it would undermine McCarthy and risk their political careers.)
What seems evident is that McCarthy and his party are at least going to bring things to the brink, as the House Freedom Caucus demands. And at that point, if Democrats don’t negotiate, Republicans will have to make some very hard decisions about just how far to push. The off-ramp that Boehner took in 2013 — that is, throwing in the towel — is not so readily available these days.
As for Democrats’ posture? The lessons of history loom there too.
Both the White House and top Democrats have said they won’t negotiate over the matter. They are demanding a “clean” debt ceiling increase — that is, one that doesn’t contain anything extraneous.
It makes sense to telegraph that hard line as an opening bid. But they also have motivation to hold it. That’s both because of the political verdicts from past debt ceiling and shutdown fights, and also because they don’t want to allow what resulted from the 2011 standoff to become the norm.
“It set a precedent that was unique in American history, in which one party threatened the global economy and actually got a bunch of political concessions in exchange for their belligerence,” Sen. Brian Schatz (D-Hawaii) told The Washington Post recently, “and at this point, we just have to say we’ve seen this movie before.”
Back then, the Obama administration calculated that the “draconian” cuts that would result from the sequester would bring both sides together to pass something more reasonable. It figured that the large cuts to the defense budget in particular would be unacceptable to the GOP, which was then the more hawkish party. Then Congress proved how truly intransigent it could be, as the so-called “supercommittee” tasked with forging a deal crashed and burned.
There’s perhaps an argument that all of this could result in modest cuts that are more immediate and predictable than the sequester (though we don’t know what McCarthy promised the Freedom Caucus). But because of how this process and the GOP have evolved, those in the driver’s seats have all kinds of motivation to turn this into a game of chicken.