Chris had a very thorough post on the debt ceiling crisis earlier this week that looked at both how we got here and at what might happen if Congress fails to increase the Treasury’s borrowing authority in the next couple of weeks. I think his analysis of the situation is correct: Congressional Republicans backed themselves into a corner in the course of their attempt to delay, defund, or repeal Obamacare in exchange for keeping the government open, and had better figure out a way to end the shutdown and raise (or “suspend”) the debt ceiling as expeditiously as possible. Whereas the shutdown “is more of an inconvenience than a minor cataclysm” (although “each passing day makes the situation increasingly worse for more and more people”), failure to raise the debt ceiling would at best result in unthinkable levels of austerity – and at worst an international financial crisis.
I was somewhat disappointed when I finished the piece though, since it was titled “The Debt Ceiling Consequences of the Shutdown” [emphasis added] and yet it never actually discussed the connection between the two events. Chris writes:
More problematic is that the largest potential consequences of the shutdown are still yet to come. It’s possible that the budget battle will have spillover effects for this month’s upcoming debt ceiling vote, a critical legislative process that could have global financial consequences if not handled responsibly.
He then presents us with some quotations about the negative impact of the 2011 debt ceiling debate on the U.S economy and on our reputation in the eyes of at least one of the major ratings agencies, as well as the likely result of letting the current standoff continue to escalate. But what exactly are the “possible spillover effects” of the current crisis on the next one? He never tells us.
I’m curious to hear more detail about how Chris thinks the two fights are linked, because I agree completely that they are. It seems to me, however, that the connection is much less ominous than you might think after reading his screed about how the House Republicans need to put an end to their “spitfire histrionics.”
In fact, I actually think it’s a good thing that we’re experiencing a shutdown right now, given the political climate in which we find ourselves. There were early signs that House Speaker John Boehner, who served under Newt Gingrich during the shutdowns of the 1990’s and knows from firsthand experience that the Republicans were widely perceived as having sustained more political damage from that debacle than Bill Clinton, would attempt to avert a shutdown by convincing his members that the best time for staging an apocalyptic confrontation with Obama would be when the debt limit needed to be increased.
The U.S. never having defaulted, the aftermath of a debt default is largely a collection of hypotheticals and unknowns. This means that, unlike in the case of a shutdown, there is no precedent for a failure to raise the debt ceiling having gone badly for Republicans. Therefore, according to this line of thinking, failure to raise the debt ceiling has more potential upside for the GOP than failure to pass a continuing resolution that keeps the government running. This may or may not seem like a strange argument, depending upon how risk-averse you are and how much you believe the warnings of economists and financial analysts who say that this is a very dangerous game to be playing.
Wonkblog’s Ezra Klein wrote back in August that “trading a government shutdown for a debt-ceiling breach is like trading the flu for septic shock” and that Boehner’s apparent attempts to “talk his party down from this tree [allowing a shutdown]” would only make it that much more difficult to get it down from “that higher, more dangerous, tree [allowing a breach of the debt ceiling]” in a few months’ time.
By the last week of September, Wonkblog was featuring a post entitled “We may have a shutdown after all. And that may be a good thing.” Echoing the logic of his earlier tree metaphor, Klein and his co-blogger Evan Soltas reacted to the view of Politico reporters Jake Sherman and John Bresnahan that if “unified Democratic opposition forces Republicans to swallow a government funding bill they deem less-than-satisfactory, House Republicans will certainly counter by increasing their demands for reform when it comes to the debt-ceiling legislation.” Soltas and Klein reply that
when it comes to the final compromise on the bill, Sherman and Bresnahan are surely right: House Republicans are going to be more resistant to raising the debt ceiling if they feel they didn’t even stand and fight on the CR [continuing resolution]. If avoiding a government shutdown means breaching the debt ceiling — or even just increasing the likelihood of a breach in the debt ceiling — that’s a very bad trade. The corollary, of course, is that accepting a shutdown for a much lower likelihood of a debt-ceiling breach might be a good trade…
It’s a mark of the insane and reckless turn in our politics that shutting down the government so one of our [two] major political parties can get the brinksmanship out of its system is emerging as the sober, responsible thing to do. But here we are, greatest nation the world has ever known.
It might be helpful to think of the shutdown as kind of like that movie The Purge, which I have never seen. My understanding of the premise is as follows: at some point in the near dystopian (utopian?) future, society figures out that the most effective way of keeping crime rates low is to designate a single day every year on which all criminal activity is temporarily legal. A twenty-four hour period in which everyone is free to unleash his darkest impulses functions as a sort of emergency release valve that keeps violent and anarchic tendencies from erupting unexpectedly at other points during the year. (Yes, I realize that this is a strange model of human nature, and that this “cure” is in many ways worse than the disease, and that we’re actually discussing this movie as if it offers meaningful insights about reality. But just suppose for a moment that there’s something to it.)
All politicians talk about “fighting” for their constituents and for their agendas, but the rhetoric of the Tea Party movement is imbued with military imagery to an unusual degree. Insurgent conservative politicians nowadays are loath to express a willingness to work with members of different ideological persuasions. It’s natural to expect that constant assurances by Tea Party-backed congressmen that there will soon be an epic battle with Obama that never actually takes place will only result in an unhealthy cycle of heightened expectations followed by crushing disappointment.
At some point, these congressmen will actually need to deliver on their promises to avoid facing primary challenges and the wrath of their donors. Better for them to force a real-life showdown when failure to reach a deal implies as little actual damage as possible. At least they’ll retain some credibility in the eyes of their supporters when the time comes to cave on something else. As Klein and Soltas put it, maybe it would be best for everyone if the extreme wing of the GOP “got the brinksmanship out of its system now” and gave itself permission to behave more responsibly during the next crisis. Perhaps the shutdown will see to it that the darker thoughts swirling around in the Tea Party id are purged for the foreseeable future.
A related argument says that allowing the more belligerent members of the GOP caucus to experience the political blowback of precipitating a government shutdown will deter them from wanting to endure the presumably greater pain associated with a default. Writing before the shutdown began, The New Republic’s Noam Scheiber concurred with this line of reasoning:
Suppose Boehner surrenders… and avoids a shutdown. The only way he’s likely to keep his job in the face of the inevitable conservative backlash is to promise a for-real-this-time confrontation a few weeks later, in which the House insists on a year-long delay for the individual mandate, the linchpin of Obamacare, in exchange for raising the debt ceiling…. Problem is, Obama has absolutely refused to negotiate over the debt limit in any way…. [E]ither Boehner gets it or the global economy gets it….
If Boehner resigns himself to a shutdown, on the other hand, suddenly the future looks manageable. After a few days of punishing political abuse, Boehner will be able to appear before his caucus, shrug his shoulders in his distinctive Boehnerian way, and bleat that he executed the strategy conservatives demanded… The demoralized conservatives will realize they’re out of moves – at least in this particular battle – allowing Boehner to raise the debt limit a few weeks later with little drama.
The problem, as we have already seen, is that the prospect of a default seems legitimately not to frighten many of the hard-liners in the House (and Senate). It is not necessarily the case that a shutdown-induced PR nightmare will diminish this faction’s appetite for further escalation. In fact, it might even do the opposite.
There is one other point that isn’t entirely related but that I think has been largely overlooked in the commentary on the GOP’s strategic morass and bears mentioning. The assumption seems to be that any debt ceiling increase would last for one year, with even a leaked copy of a Boehner proposal from a couple weeks ago containing a provision to “suspend” the borrowing limit for exactly that long (until December 2014). Scheiber mentions the House’s push for a one-year delay of the individual mandate, which seems to have been designed to give the appearance of a fair trade: conservatives would get a one-year reprieve from the Affordable Care Act in exchange for Obama and the Democrats (or rather, the country and global economy) getting one more year without utter calamity.
Assuming that the Republicans do end up taking more heat than Obama from the public as a result of this brinksmanship, why would they possibly want to replay this entire debacle in the run-up to the 2014 midterm elections? The GOP has a real shot at taking over control of the Senate and would presumably want to do everything in its power to wipe this egregious episode from the electorate’s memory far in advance of next November. It is often said that politicians think too much about politics and not enough about doing the right thing for the country. It’s clear that at least some of them don’t think much about politics either.
In less than two weeks, we’ll find out whether this theory is correct. If it isn’t, then maybe we all need to watch The Purge and learn how to stay safe when the world ends.