Congress

The GOP's Phony Debt-Ceiling Threats


Members of the House leaving the U.S. Capitol following budget talks on Dec. 12

Photograph by Pete Marovich/Bloomberg

Members of the House leaving the U.S. Capitol following budget talks on Dec. 12

Even before President Obama signs the two-year budget deal settled on with uncharacteristic ease by Congress, Republicans have begun issuing threats about the upcoming debt-ceiling deadline and the ransom they will demand to extend the nation’s borrowing capacity. Yesterday it was Senator Mitch McConnell (R-Ky.): “Every time the president asks us to raise the debt ceiling is a good time to achieve something significant for the country.” On Sunday it was Representative Paul Ryan (R-Wisc.): “We don’t want ‘nothing’ out of this debt limit. We’re going to decide what it is we’re going to accomplish out of this debt-limit fight.”

Republicans want something, dammit—even if they’re not sure what it is. This combination of truculent threats and vague demands inadvertently recalls the hilarious line uttered by Republican Representative Marlin Stutzman of Indiana during the October shutdown, exposing the folly of that whole enterprise. “We’re not going to be disrespected,” Stutzman told the Washington Examiner. “We have to get something out of this. And I don’t know what that even is.”

Driven by either force of habit or guilt over a budget deal that raises spending and taxes (“fees”), Republicans are turning back to their old tactics. Those tactics failed last time and are sure to do so again. Stutzman and his party got nothing out of the shutdown but lousy poll numbers, and they’re not going to get anything out of another debt-ceiling scare, either.

The reason is that Obama has already learned how to defeat these threats: by calling the opposition’s bluff. In 2011, Obama foolishly agreed to negotiate over the debt ceiling and got saddled with the Budget Control Act, which cut $1.5 trillion in spending, raised no new revenue, weakened demand, and slowed the recovery. The next time around, last October, he held firm and prompted the embarrassing Republican volte face that brought that shutdown/debt-ceiling scare to a close.

The truth is that nobody believed the Republican threat last time around. At a holiday reception a couple weeks ago, I asked a prominent Wall Street wealth manager if he or any of his clients had been worried about a debt-ceiling breach. He laughed. Once the Republicans folded, they’re in an even weaker position this time around. Talk to any Republican staffer or even some conservative activists and you’ll likely hear that the caucus is “fatigued” and the appetite for further showdowns has vanished.

In private, at least, GOP senators appear to agree. At a background briefing this morning, one senator told the Huffington Post’s Jon Ward that “the shutdown took the stomach and leverage out of Republicans,” who had “no stomach” for a debt-ceiling fight. So if a further round of ransom demands really is the Republican Plan A for the debt ceiling, they should probably also start thinking about a Plan B.

Green_190
Green is senior national correspondent for Bloomberg Businessweek in Washington. Follow him on Twitter @JoshuaGreen.

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