Debt ceiling again...

The risk that America will default on its debts is now higher than ever

By Paul Waldman  

It’s tempting to say that the upcoming need to increase the debt ceiling is another depressing iteration of the governing-by-crisis that we’ve gotten used to over the last five years since Republicans took control of the House. But it isn’t. It’s worse. The chaos that is the Republican caucus in the House of Representatives is about to have some very serious effects on the entire country.

Why is this crisis different from those that came before it? In all of the government shutdown/debt ceiling crises of the last five years, we knew how they would end: eventually, after putting up a show of fighting against that dastardly Obama administration, John Boehner would allow a vote on a bill to either fund the government or raise the debt ceiling, knowing that it would pass only with the votes of Democrats plus a few dozen Republicans sane enough to want to avoid catastrophe. The conservatives would cry “Betrayal!” but the crisis would be over.

But now even that may not be possible. Here’s the latest news from Politico this morning:

House GOP leaders initially planned to vote on a red-meat proposal Friday pitched by the Republican Study Committee to increase the debt ceiling while imposing new limits on executive-branch power. That measure stood no chance of passing the Senate, but would at least show effort.

Yet when House Majority Whip Steve Scalise’s (R-La.) team tested Republican support for the legislation, it fell far short of the needed 218 votes, and Speaker John Boehner (R-Ohio) postponed any floor action.

Now, the U.S. government is 12 days from reaching the debt limit without a clear plan of what to do.

Boehner, McCarthy and other GOP leaders are refusing at this point to move ahead with a “clean” debt ceiling bill insisted on by President Barack Obama. Senior leadership aides said they couldn’t find the 30 Republican votes needed to join with all 188 Democrats to pass that proposal — a bleak indication of the current state of play.

So there aren’t even 30 Republicans in the House willing to keep the United States government from defaulting on its debts. How did we get here?

First, let’s establish some context, since it’s been a while since we had a debt ceiling crisis. For some idiosyncratic historical reasons, the United States has a statutory limit on how many bonds it can issue to pay for what Congress buys, meaning that after it passes a budget, Congress has to pass an extra bill allowing the government to pay for that budget (the only other industrialized country that has a debt ceiling is Denmark, which might dim Bernie Sanders’ affection for the place, though theirs is set so high it doesn’t become a political football). For almost a century, debt ceiling increases were an occasion for brief political theater, as members of the party out of power would make some floor speeches about the administration’s outrageous spending, and then the bill would pass extending the ceiling for a year or two, because even the most committed opponents of the administration weren’t so deranged as to actually want to risk the United States government defaulting on its debts. But that was before the Tea Party came to town.

If a new bill raising the ceiling doesn’t pass by November 3rd, we will default. The Obama administration, as it always has, insists upon a “clean” debt ceiling increase — just increase it, and then we can argue about our other policy disagreements without threatening the full faith and credit of the United States. Republicans, however, see this as a great opportunity for blackmail.

So why are we even more likely now to fail to pass an increase than we were when we had this same crisis in 2011, then again in 2013, then again in 2014? Look at what’s going on in the House. Conservatives there are feeling emboldened because they just got rid of John Boehner, as they had wanted to do for so long. They feel strong and empowered, so naturally they believe that this is a battle they can win, even if they’ve lost before. And they’ve upped their demands.

Now they want not just general budget cuts in exchange for raising the ceiling, but cuts specifically to Medicare, Medicaid, and Social Security. That demand was contained in a document the House Freedom Caucus put out recently, and the conservative Republican Study Committee’s proposal would raise the ceiling in exchange for $3.8 billion in cuts to those programs over the next decade, along with a freeze on all regulations until Barack Obama leaves office. If they think Democrats would ever accept those terms, they’ve lost their minds. But they seem serious.

But it isn’t just this recent revolt. As Jackie Calmes and David Herszenhorn of the New York Times recently pointed out, today’s House is even more conservative than it was when we came so close to defaulting before:

The legislative math has only grown more difficult. When Congress last voted in February 2014 to suspend the debt limit, 28 House Republicans joined nearly all Democrats in support; 199 Republicans were opposed. Now there are fewer Democrats in the House and if all 188 of them voted for an increase, Republican leaders would need 30 votes from their side for a 218-vote majority — two more than last year.

Yet nine of last year’s 28 Republican supporters have left Congress and at least three of their Republican successors — Representatives Dave Brat of Virginia, Steve Knight of California and Mark Walker, Republican of North Carolina — are almost certain to be opposed.

Also, 14 Democrats who voted to increase the debt limit are gone, replaced by Republicans, some of whom are likely to vote no.

That’s why they can’t even find 30 Republicans to vote for a clean increase. Then there’s the question of the next Speaker, who will be the one actually shepherding this crisis if Republicans stick to their schedule of electing the new Speaker next week.  While Paul Ryan hasn’t said publicly what he thinks ought to be done, he voted against the increase last year. This topic surely came up when he went to the Freedom Caucus to win their support. What did he tell them? They fervently want to use the threat of default to extort the administration into satisfying some of their policy goals. Is one of Ryan’s first acts a Speaker going to be turning his back on them? Don’t bet on it.

All this suggests that every force involved is propelling Republicans not just toward forcing a crisis, but forcing an actual default. At some point, they might realize that “Republicans are holding a gun to the head of the American economy and they’ll fire unless we let them slash Social Security and Medicare” isn’t exactly a winning political message to send. But who knows how much damage will be done before they realize that?