A Debt Ceiling Deal That's Not Called a Debt Ceiling Deal is Still a Debt Ceiling Deal
by Michael C. Dorf
Following his meeting last week with President Biden, House Speaker McCarthy stated that he and the President should be able "to find common ground" regarding raising the federal debt ceiling. Yet the two sides seem to be starting at an impasse. McCarthy says he wants budget cuts in exchange for raising the debt ceiling; Biden says that raising the debt ceiling is non-negotiable.
Biden clearly has the moral high ground here. This is not like a budget negotiation in which, say, Democrats want billions for some domestic program while Republicans want billions for some military program, so they come together to fund both. Biden's ask is not on behalf of any Democratic agenda item. Raising the debt ceiling is necessary to avoid tanking the global economy and perhaps permanently undercutting the role of the dollar as the world's reserve currency.
And yet, even though McCarthy's position is unreasonable, to paraphrase Donald Rumsfeld, you don't negotiate with the House Speaker you wish you had but the one you have. Just as hostage negotiators sometimes find themselves negotiating with hostage takers and U.S. diplomats sometimes negotiate with unsavory regimes, so too here, the administration must deal with McCarthy and his caucus of ideologues and imbeciles. What are the options? Let's consider.
Notwithstanding news stories that portray the likes of Lauren Boebert, Paul Gosar, Matt Gaetz, Marjorie Taylor Greene, and a few other Trumpist members of Congress as a small fringe, it's probably the case that a strong majority of House Republicans oppose raising the debt ceiling without a deal to cut spending. Accordingly, if McCarthy respects the so-called "Hastert rule," an informal understanding requiring that any bill that comes to the House floor must have support from a "majority of the majority," he can't bring a clean debt ceiling bill to the floor--even if he wants to (which is hardly clear).
Could Biden protect McCarthy from his own caucus should he abandon the Hastert rule for a clean debt ceiling bill? With the cooperation of House minority leader Jeffries, yes. Undoubtedly, the moment McCarthy moved the bill to the floor, numerous Republican House members would call for his removal. At that point, Democrats could join with just a handful of moderate Republicans to defeat a motion to vacate the chair.
However, there's very little chance that McCarthy would accept such a deal (again, even assuming he wants to move a clean debt ceiling bill). Although Jeffries and the Democrats could help McCarthy hold onto the chair for the balance of the current Congress, violating the Hastert rule to move a clean debt ceiling bill would mean McCarthy would serve a two-year Speakership and then be booted out of GOP House leadership. It could well be the end of his political career, as he would also then likely face a primary challenge. So I regard any scenario in which McCarthy must sell out the GOP rank-and-file House membership as a non-starter.
Perhaps a better route would be to find a handful of moderate Republican House members to join the Democratic House members in signing a discharge petition and then voting for the discharged clean debt ceiling bill. Jeffries has hinted that this might be in the works--which would be great--but I'm a bit dubious. Even Republicans in purple swing districts can be defeated in a primary by being outflanked to the right by a well-funded demagogue running ads saying things "Representative Lawler voted to add trillions of dollars to our out-of-control federal debt WITHOUT ANY SPENDING LIMITS" because even in purple districts, the GOP primary electorate is very right-wing. Hence, unless and until proven otherwise, I don't think we can count on a discharge petition to do the job.
Thus we come to what I take to be the Biden administration's actual strategy, which seems to have two parts: (1) try to win the politics; and (2) negotiate over the debt ceiling while pretending not to. I'll address these in tandem because they're linked.
Even as Biden has said that he won't negotiate over the debt ceiling, he has signaled a willingness to negotiate over the budget. In some sense that's routine. A failure to raise the debt ceiling would be catastrophic, but even a failure to enact a budget would be quite bad--causing the sorts of disruptions with which we have grown familiar from prior government shutdowns. (Again, as Prof Buchanan and I have said repeatedly while tearing our hair out, failure to raise the debt ceiling is different from a government shutdown; the latter results from failure to pass a budget or a stopgap before appropriations run out. But I digress.) And to get a budget bill through the House, absent some extraordinary procedure of the sort I think unlikely (see above regarding discharge petitions), Biden needs to strike a budget deal with McCarthy.
The core of the Biden strategy here seems to be to call McCarthy's bluff by asking him to specify the budget cuts Republicans want. Biden thinks McCarthy is bluffing because: (a) Republicans won't touch military spending; (b) there's not enough money in the non-military discretionary budget to substantially affect the overall size of the budget, even with very painful (and stupid) cuts to basic services the government provides; and (c) that leaves Republicans who want to get large budget cuts having to call for very unpopular cuts to entitlement programs--especially Social Security and Medicare.
Accordingly, Biden has said, when asked about negotiating with McCarthy: "show me his budget." The idea seems to be that if and when that happens, Biden will be able to take the case to the American people that Republicans want to cut very popular programs. Thus, the Democrats win the politics.
If this is in fact Biden's strategy, it's naive. Remember the first two years of the Biden administration, when Joe Manchin and Kyrsten Sinema repeatedly scuttled major legislation? Manchin constantly moved the goalposts, whereas Sinema constantly refused to say what she wanted. Expect that--only more so--from McCarthy and his caucus. Also expect a befuddled press corps to lose the thread and focus on how the "two sides" can't agree. If Biden thinks that he has painted McCarthy into a corner where McCarthy will have to concede lest the unpopularity of the GOP position be exposed, he hasn't been paying attention.
For God's sake, AFTER A MOB INSPIRED BY A DEFEATED REPUBLICAN PRESIDENT TRIED TO VIOLENTLY OVERTHROW THE U.S. GOVERNMENT, A MAJORITY OF HOUSE REPUBLICANS VOTED TO END DEMOCRACY IN AMERICA. What price did they pay? They won back the House by a smaller margin than expected, but meanwhile, the few patriotic House Republicans willing to stand up to the madness lost their seats. And Joe Biden thinks Republicans will be embarrassed by the fact that they haven't specified what budget items they want to cut? Or that they won't simply lie about it?
But perhaps Biden and the people around him aren't being as naive about the politics as they appear to be. Perhaps what they really have in mind is a kind of doublespeak in which they really do intend to negotiate over the debt ceiling. This strikes me as a plausible account of what we're seeing.
Think about international diplomacy. Often the way to strike a deal is to word it in a way that allows the leadership of each country to characterize what happened differently for their own respective domestic constituencies. Consider an example that Saturday's shooting down of the Chinese surveillance balloon calls to mind. In April 2001, a Chinese fighter-jet pilot died after colliding with U.S. spy plane, which then made an emergency landing in China. The Chinese government held the crew. In order to prevent the incident from escalating into an all-out shooting war, the U.S. government issued a letter saying that it was "sorry" the Chinese pilot died and that the U.S. plane had entered Chinese airspace. The Chinese government characterized the letter as an apology; the Bush administration said it was merely an expression of sorrow and regret but not an apology.
So too here, we can foresee that McCarthy will agree to move a debt ceiling increase and Biden will agree to a budget that makes some cuts to spending. McCarthy will characterize the deal as a swap. Biden will say the agreements are separate. The good news will be that default will be averted. The bad news will be two-fold.
First, the cuts, while not making much of a dent in the deficit or debt, will be bad policy. Indeed, we can imagine McCarthy extracting cuts that actually exacerbate the deficit. For example, he might insist on rescinding funding for the IRS, with the result that more tax money owed goes uncollected. Or they'll cut back on important spending on enforcing environmental protection laws. Or they'll include some culture-war strings regarding "wokeness," "critical race theory," or whatever else fires up the GOP base.
Second, unlike the semantics of "sorry" versus "apology," even if Biden chooses to call his agreements on the budget "independent" of McCarthy's agreement on the debt ceiling, Republicans will know that they can indeed extract spending cuts from Democratic Presidents as a condition of agreeing to increase the debt ceiling. If you give hostage takers a "gift" that you characterize as unrelated to their ostensibly separate act of "grace" in releasing the hostages, you incentivize more hostage taking. So far as incentives go, the semantics don't matter.
Accordingly, if Biden is going to negotiate over the debt ceiling while pretending not to, here's what he should demand: Write the Gephardt rule--under which the debt ceiling automatically goes up in lockstep with appropriations that outstrip tax revenues--into law. That way, he can prevent future hostage taking.