Analysis | The Chicken Debt Ceiling Game Begins

Just weeks into the new Congress, we have already entered extraordinary times in the US government, literally.

Treasury Secretary Janet L. Yellen said Thursday that we have reached the debt limit previously authorized by Congress, leaving her department to take “extraordinary steps” to prevent the government from defaulting on its debt. To put it in the simplest terms: Congress now has a few months to raise the debt ceiling before those extraordinary measures run out and we trigger what could be a catastrophic debt default. The deadline is expected to come in early June.

What happens from here is largely uncharted territory. And it will test the resolve of both parties, along with, potentially, the resolve of more moderate Republicans to take a stand against their party’s rising far-right wing.

To be clear, we’ve seen debt ceiling clashes before, with the biggest ones in 2011 and 2013. The setup then was similar to the current one, with Republicans trying to take advantage of their majority in Congress to force spending cuts under a Democratic administration. . The idea is that, because of the high costs of not reaching a deal, this is a rare and powerful opportunity to try to shrink government.

(Raising the debt ceiling is simply agreeing to pay the bills the government has already racked up; it doesn’t really authorize new spending. Or, as Republican Senator John Neely Kennedy of Louisiana put it this week, “If you’re going to have a party, you have to pay the band..”)

Such ploys have had mixed success.

In 2011, the Republicans and the Obama administration finally agreed to what became known as hijacking. In effect, it established automatic and blanket cuts if the two sides could not agree on more specific cuts in the future. And when the two parties were, perhaps predictably, unable to reach that future agreement, the automatic cutoffs kicked in.

In 2013, the Republican Party tried again and lost. That fight over the debt ceiling overlapped with a fight over the government shutdown, and party leaders acquiesced in the effort for a while before finally throwing in the towel. “We fought the good fight,” said then-House Speaker John A. Boehner (R-Ohio). “We just didn’t win.”

Altogether, Republicans have arguably gotten more out of these clashes than by using similar brinksmanship on other government shutdowns. In the latter, spending cuts were very piecemeal. But in almost every case, the final verdict has been clear: Polls found that Americans blamed Republicans more for these crises than Democrats.

In recent years, those verdicts have understandably dampened the appetite Republican leaders like Senate Minority Leader Mitch McConnell (R-Ky.) had for going down these paths.

But leadership isn’t really in the driver’s seat, a dynamic that is arguably even stronger now than it has been in the past decade. Far-right House Republicans, who have shown little regard for their party’s broader political fortunes, won key concessions in the name of giving Kevin McCarthy (R-Calif.) enough votes to become president.

And at the top of that list was leverage on the impending debt ceiling fight. McCarthy agreed to tie any increase to spending cuts, and also, perhaps crucially, gave the far right more power to remove him as president if he doesn’t toe his line.

The House GOP majority is much smaller than it was a decade ago, which would seem to allow a small number of more moderate Republicans to join the Democrats if the far right takes things too far. But McCarthy primarily controls what comes into the room, and has effectively agreed that he will not participate in any attempt to raise the debt ceiling without spending cuts, under possible penalty of losing his job.

(There are some solutions, including a “discharge petition,” which requires a vote on a bill if a majority of members sign it; even some Republicans are now raising it. But the process is lengthy, rarely used, and it might be hard to get even a small number of more moderate Republicans on board, since it would undermine McCarthy and jeopardize their political careers.)

What seems clear is that McCarthy and his party are at least going to push things to the limit, as the House Freedom Caucus demands. And at that point, if the Democrats don’t negotiate, the Republicans will have to make some very difficult decisions about how far to push. The off-ramp that Boehner took in 2013, i.e., throw in the towel, isn’t as readily available these days.

As for the position of the Democrats? The lessons of history loom large there, too.

Both the White House and top Democrats have said they will not negotiate on the matter. They demand an increase in the “clean” debt ceiling, that is, one that does not contain anything strange.

It makes sense to telegraph that hard line as an opening offer. But they also have motivation to sustain it. That’s because of the previous debt ceiling political verdicts and shutdown fights, and also because they don’t want to let what came out of the 2011 showdown become the norm.

“It set a precedent that was unique in American history, where one side threatened the global economy and actually got a bunch of political concessions for their belligerence,” Sen. Brian Schatz (D- Hawaii) to The Washington Post, “and at this point, we just have to say that we’ve seen this movie before.”

At the time, the Obama administration calculated that the “draconian” cuts that would result from the sequestration would rally both parties to pass something more reasonable. He thought that big cuts to the defense budget in particular would be unacceptable to the Republican Party, then the most aggressive party. Then Congress showed just how truly hard-nosed it could be, as the “supercommittee” tasked with forging a deal failed and burned.

There may be an argument that all of this could result in modest cuts that are more immediate and predictable than sequestration (although what McCarthy promised the Freedom Caucus we don’t know). But because of how this process and the Republican Party have evolved, those in the driving seats have all sorts of motivations to turn this into a game of chicken.

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