House Republicans are pressing their case for big spending cuts in return for raising the debt ceiling.
But there is a real chance the GOP could overplay its hand and end up blamed for cascading negative effects if the U.S. even approaches a scenario where it defaults on its financial obligations.
The U.S. has never actually defaulted — and doing so would likely have an instantly traumatic effect on global financial markets.
Politically speaking, Republicans have got the lion’s share of the blame during previous showdowns on the different — but not massively dissimilar — issue of government funding.
And it’s notable that the emphatic position advanced by House Republicans has not been endorsed by their party colleagues in the Senate.
Senate Minority Leader Mitch McConnell (R-Ky.) has said starkly that the United States won’t default.
The Biden administration has been adamant that no negotiations over spending should take place around the issue. White House press secretary Karine Jean-Pierre said Wednesday that a raising of the debt ceiling is “something that should be done without conditions.”
Jean-Pierre added, “We should not be negotiating around it. It is the duty, the basic duty, of Congress to get that done.”
The debt ceiling — the limit of how far into the red the U.S. Treasury can go to pay costs already incurred — was hit on Thursday. But Treasury Secretary Janet Yellen has said that “extraordinary measures” can buy the government some more time.
When the real crunch will come is not certain, but the best guesses now suggest it will not happen until at least June.
Still, the divide between Democrats and Republicans is so wide that it’s not at all sure it can be bridged even with a five-month warning.
Speaker Kevin McCarthy (R-Calif.) has suggested serious cuts to social spending are required before his members would be willing to countenance raising the debt ceiling from its current level of around $31.4 trillion.
McCarthy has set his face against any effort to “continue the past behavior” when it comes to spending, as he told reporters earlier this week. Instead, McCarthy said, it was necessary to “set a path to get us to a balanced budget and let’s start paying this debt off.”
But the GOP faces a credibility problem given that the debt ceiling was raised three times during former President Trump’s time in the White House. The recent history leaves the party wide open to the charge that it is making an argument of political convenience.
That in turn makes it harder to win the political battle looming in the next several months.
On the politics, Democrats evince confidence, at least for now.
“They could seriously hurt the country so I hope they don’t do it — but from a political standpoint, they could take the vast bulk of the blame,” said Democratic strategist Mark Longabaugh, referring to the possibility of the House GOP bringing the U.S. to the brink of default.
Longabaugh acknowledged that there are plenty of voters who have sincere concerns about government spending.
“But I just think about the context of the way this debate is going to unfold,” Longabaugh added. “The focus is not really going to be on high-minded questions of government spending. It’s going to focus on the Republicans creating chaos, and not being able to lead and manage.”
Independent experts agree that there is significant political danger for Republicans if the situation reaches a boiling point.
“If you look at recent showdowns, it is usually the Congress that loses,” said Todd Belt, a George Washington University professor and the director of the university’s political management program. “That’s who the public ends up blaming,”
Belt explained that “Congress is often perceived by the public as being more disorganized and having much more complex and conflicting desires than the White House, which can have much better message discipline.”
There is some evidence of that point already, even within Republican ranks.
McCarthy is adamant that there should be cuts but frames his argument around the idea that it is reasonable to expect the White House to negotiate.
McConnell is much clearer on the need to avoid default and much vaguer on what a deal will require.
And Republicans hard-liners strike a different tone yet again, with Rep. Chip Roy (R-Texas) saying on the House floor last week, “It’s my job not to back down.”
“I intend to use the debt ceiling to ensure that we get fiscal and structural reforms,” Roy said,
Democratic strategist Hank Sheinkopf contended that figures such a Roy are “going to push it to the edge to try to prove they are deficit hawks — and probably bring the world’s economic system to near-disaster.”
Sheinkopf argued that his party leaders were right to refuse to negotiate, insisting that “there is nothing to indicate that would satisfy the Republicans. The fear is that once you start those negotiations, they will have no end.”
Democrats feel they were burned back in 2011 when then-President Obama was willing to make painful negations to secure raises in the debt ceiling.
Centrist Sen. Joe Manchin (D-W.Va.) has called for Democrats to negotiate again this time. But he is, once again, in a small minority within his party.
For now, Democrats believe they have the upper hand — and that Republicans are on the brink of some serious self-inflicted wounds.
The Memo is a reported column by Niall Stanage.