The GOP’s Debt Ceiling Gamble

By choosing to go it alone on a debt ceiling plan, the GOP is taking a big risk.

As MSNBC’s First Read noted this morning, the House GOP is taking something of a risk in trying to go it alone on a debt ceiling deal, essentially daring the Senate and President Obama to call their bluff:

The interesting gamble Boehner is making with his two-step plan is this: He’s counting on passing this in the House with Republicans only. For months, however, the House GOP leadership has quietly argued they need Democratic votes to a get plan passed in the House. But the purpose of the conference call yesterday with the House Republican conference was Boehner trying to talk as many of the rank-and-file to sign on with his plan as possible. The House GOP leadership knows if they can’t pass Boehner’s plan WITHOUT Democratic votes, the lose a lot of leverage. How big is the unofficial Bachmann caucus inside the GOP conference? Remember, she’s against any debt ceiling raise. And this plan will not have a balanced budget amendment attached to it. Don’t assume Boehner has the 217 Republican votes for his plan. If he does, it gives his plan a better chance.

Nate Silver makes a similar point:

In addition to Republicans who might defect for ideological reasons, some others might do so for electoral ones. Polling on the debt limit, which at earlier points had appeared to show a clear plurality of Americans against any increase, has now become highly ambiguous, with widely varying results depending on question wording. But both the debt limit increase and the spending cuts attached to it are likely to inspire mixed feelings in voters, and the roughly 75 Republicans serving in swing districts would need to consider the contours of the proposal carefully.

(…)

If the vote on Mr. Boehner’s proposal fails, the risks to him are clear. It would presumably rattle markets, while making him look ineffectual. Most importantly, it would demonstrate that Republicans could not pass a bill, even through the House, without Democratic support, which would substantially reduce their leverage, as Mr. Boehner explicitly acknowledged in the conference call.

(…)

Meanwhile, although calling Mr. Obama’s bluff on his stated refusal to accept a short-term increase might qualify as a tactical victory for Republicans, its longer-term implications are ambiguous. Polls show that the public has a lukewarm view, at best, of how Mr. Obama has handled the negotiations. But the ratings for Republicans are much worse, calling into question whether they would benefit from another round of negotiations next winter under the heat lamp of the presidential primaries. There are increasing suggestions in the polling that the public could tell both Mr. Obama and the Republican Congress to find a new line of work.

Ezra Klein, meanwhile, wonders if Republicans will be willing to take yes for an answer:

Late last week, pollster Mark Blumenthal summarized the “consistent findings” from the polling on the debt ceiling. First, he said, “Americans prefer a deal featuring a mix of tax hikes and spending cuts to a deal featuring just spending cuts.” Second, “most of the surveys find strong sentiment in favor of compromise, especially among Democrats and independents.” Finally, “the surveys all show Americans expressing significantly more confidence and trust in President Obama’s handling of the issue than of either the Republican or Democratic leadership in Congress.”

Republicans have leverage because the debt ceiling needs to be raised and it can’t be raised without their support. But they don’t have popular support behind their position or their leadership. They can push this up to the brink and win, because Democrats really, really, really don’t want a debt-ceiling crisis that could set back the economy. But if they push it over the brink, they’re likely to lose, as the public really, really doesn’t want Congress to create an economic crisis that will set back the economy, and they’re primed to blame the GOP if one does in fact come to pass.

I’ve got to say that I find myself baffled at the GOP’s current strategy, and that of the Democrats for that matter. Putting together rival plans when you have no idea if the other side is going to be at all solicitous toward them strikes me as an incredible waste of time, and we don’t really have all that much time left. For example, it’s being reported that the GOP plan would essentially be a new version of “Cut, Cap and Balance” and include a future vote on the House’s Balanced Budget Amendment.  Meanwhile, Harry Reid’s plan reportedly includes $ 2.7 trillion in spending cuts, but at least $1 trillion of that is actually projected future savings from ending the war in Afghanistana and the American deployment in Iraq, exactly the kind of accounting gimmick that fiscal conservatives have rightfully condemned in the past.

Does anyone really see either of those plans getting real bipartisan support? I don’t. Instead, what we’re likely to see is a Mexican standoff with Reid and the Democrats and their plan on one side and Boehner and the Republicans and their plan on the other. At some point, they, and the President, are going to have to sit down and resume negotiations and coming up with something, perhaps a hybrid of the two plans, that can get through both houses of Congress. It won’t be pretty, and it nobody will entirely like it, but that’s the short definition of compromise.

As for the Republicans, yes I think they do have the most to lose if there’s no  deal in the end and the government is forced to figure out how to pay bills that it cannot possibly cover with the receipts that are coming in. The public has said repeatedly that they want compromise in Washington, not just on this issue, but on a whole host of others that the parties regularly fight over. So far at least, the GOP is losing the PR war here and they’re starting to look like the party that’s refusing to compromise.

Friday’s decision by John Boehner to cut off negotiations with the White House reminded me of the breakdown in negotiations between Newt Gingrich and the Clinton Administration back in 1995-96, and we all know who got blamed for that. Boehner was around back then, so I’m sure he’s aware of the risks that he’s taking. The problem is, as so many others have noted, that he doesn’t have the same control over his caucus that Newt Gingrich had over the Class of 1994. To the extent there’s a sense of loyalty among the Freshman GOP House members, its to the Tea Party, or maybe to Eric Cantor, but is certainly isn’t to John Boehner, and he knows it. Boehner has been backed into a corner here, and he’s been forced to make choices that could end up hurting the GOP in the end.

 

FILED UNDER: Congress, Deficit and Debt, Tea Party, US Politics,
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. OzarkHillbilly says:

    The problem is, as so many others have noted, that he doesn’t have the same control over his caucus that Newt Gingrich had over the Class of 1994. To the extent there’s a sense of loyalty among the Freshman GOP House members, its to the Tea Party, or maybe to Eric Cantor, but is certainly isn’t to John Boehner, and he knows it. Boehner has been backed into a corner here, and he’s been forced to make choices that could end up hurting the GOP in the end.

    So we now have 3 political parties in congress? (Ooopps, I meant 2 parties and a cult)

  2. markm says:

    …i’m so confused.

    I thought Reid and Boehner were both going it alone after Obama nixed the latest bipartisan deal??????.

    http://www.washingtonpost.com/blogs/right-turn/post/white-house-stokes-debt-ceiling-crisis/2011/03/29/gIQAvx8DYI_blog.html

    A Republican aide e-mails me: “The Speaker, Sen. Reid and Sen. McConnell all agreed on the general framework of a two-part plan. A short-term increase (with cuts greater than the increase), combined with a committee to find long-term savings before the rest of the increase would be considered. Sen. Reid took the bipartisan plan to the White House and the President said no.”

    (being reported by multiple sources).

    After this is when each were goin’ it alone….no???.

    GAAAAAAHHHH.

  3. Brutalfacts says:

    I am baffled as well as to why the GOP would want this. I can understand Reid, its a win-sorta win deal (of GOP says no, more proof that they are not serious, if they say yes, powder is dry for next fight and default dodged).

    I doubt he 218 from his caucas, if not he is sunk. Either a plan with Dem support or default. Either way he is a dead man walking as Speaker.

  4. Rob in CT says:

    Just out of curiosity:

    Meanwhile, Harry Reid’s plan reportedly includes $ 2.7 trillion in spending cuts, but at least $1 trillion of that is actually projected future savings from ending the war in Afghanistana and the American deployment in Iraq, exactly the kind of accounting gimmick that fiscal conservatives have rightfully condemned in the past.

    Two questions: 1) Didn’t the Ryan plan do the same thing? Was Ryan lambasted by Conservatives for that? 2) Is it necessarily phoney to assume that those wars will, in fact, cease at some point? Or is ForeverWar the appropriate baseline?

  5. mantis says:

    I thought Reid and Boehner were both going it alone after Obama nixed the latest bipartisan deal??????.

    Oh really? An anonymous “Republican aide” told Jennifer Rubin that? Well, then it must be true!

  6. ratufa says:

    Two of the main goals for Obama in these negotiations have been to include some revenue increases in the agreement and to have it be long-term (past the 2012 election). The Reid plan doesn’t seem to include either one of those. Why should Obama agree to it? For that matter, why should anyone look forward to going through this whole mess again in a few months? Does anyone expect that the process will be less politicized if it happens during an election year?

  7. legion says:

    Basically, it’s not mathematically possible to “fix” the economy (for some medium- to long-term value of “fix”) without getting rid of the Bush tax cuts. They’re not helping the economy; they never have and they never will. If we did that one thing, WE WOULDN’T HAVE TO CUT A DIME to get past the current debt ceiling problem.

    Can anyone explain to me why even the Dems aren’t trying to do this any more?

  8. Russell says:

    I keep hearing that a plan can’t be passed without republican support (true) as a reason for democrats to compromise. It is, however, also true that a plan can’t be passed without democratic support. Compromise is required on both sides. Why are republicans getting a pass on this (asked at least somewhat rhetorically)?

  9. CB says:

    at least $1 trillion of that is actually projected future savings from ending the war in Afghanistana and the American deployment in Iraq, exactly the kind of accounting gimmick that fiscal conservatives have rightfully condemned in the past.

    why is this considered a gimmick? end unnecessary wars –> save money otherwise wasted on unnecessary wars. what am i missing?

  10. markm says:

    @mantis:

    That’s why I mentioned multiple sources are reporting this.

  11. Moosebreath says:

    Russell,

    Exactly. Any plan will require Democratic votes in the Senate, and a Democratic President to sign it. It likely will also need Democratic votes in the House. And yet all that is being propsed are variants of the 100% maximal Republican wishlist.

  12. MBunge says:

    I think it’s interesting how Reid’s plan doesn’t seem to be provoking howls of outrage from the Left, even though it is far more of an abject surrender to Republicans than anything Obama put on the table.

    Mike

  13. markm says:

    http://www.washingtonpost.com/blogs/ezra-klein/post/wonkbook-republicans-have-won-but-can-they-stop-there/2011/07/25/gIQAFHVIYI_blog.html

    1) The House and Senate are preparing rival debt deals, reports Lori Montgomery: “House and Senate leaders were preparing separate backup plans Sunday to raise the federal debt limit after another day of intense negotiations failed to break a partisan impasse that threatens to throw the government into default next week…Reid said he would turn instead to an entirely new approach ‘that meets Republicans’ two major criteria,’ which are spending cuts designed to meet or exceed the amount of the debt-limit increase and no new taxes. Under Boehner’s rules, Reid said, the $2.7 trillion debt-reduction package he plans to unveil Monday should buy the Treasury sufficient borrowing authority to pay the nation’s bills through the end of next year.”

    Add to the list of multiple sources.

  14. Brutalfacts says:

    @Russell:

    Boehner is trying to go it alone and peel off a few Senate Dems for his plan. Risky for sure but the last thing he wants to do is get the Dems involved. It is the death knell of his Speakership and probably his political career.

    I sense the “Republican pass” is ending. While my fellow progressives slam Obama and the Dems for being weak by offereing Boenher everything he wants it will draw a very stark picture of the true motives of the GOP in this fight. Call it winning by losing if Boehnor cannot pull off the two part plan which even if passed in the House (no given) has to get Dem support in the Senate to be successful (again not a given). This will set up the media to act all puzzled about why the GOP rejected the Reid plan (sure you can dig deep about the size and scope of the cuts, but Joe Sixpack tunes that stuff out) and wonder aloud if maybe the GOP really isn’t serious (media is always late to the party).

    Also……if I hear John of Orange say something about the “Presidents Re-election” moving his position I will scream. Last I looked his entire caucas is up for re election as well, the Tea Party types are on thin ice to begin with and the rank and file has to look over their shoulder trying to prevent a primary challange. That is what he needs to be called on by the media.

  15. sam says:

    @markm:

    That’s why I mentioned multiple sources are reporting this.

    It’d be better if in addition to merely “mentioning” the multiple sources, you provided links to them. Better for your claim, anyway.

  16. hey norm says:

    “…Harry Reid’s plan reportedly includes $ 2.7 trillion in spending cuts, but at least $1 trillion of that is actually projected future savings from ending the war in Afghanistana and the American deployment in Iraq, exactly the kind of accounting gimmick that fiscal conservatives have rightfully condemned in the past…” and yet is part of Ryan’s plan.
    The GOP likes it both ways. They don’t like it when Democrats propose it. They do like it when they propose it. It’s just like Heatlth Care Reform, and Cap and Trade.

  17. Wayne says:

    @ratufa
    So if Obama can’t get one of his main goals of pushing the issues past the next election, he shouldn’t sign off on it?

    Wow and people have the nerve to bash the Republicans for not signing off on any agreement unless one of their main goals of real and immediate spending cuts is done.

    Yes no one is looking forward to going through another mess in a few months. However if they are more worry about doing what is right instead of how it will affect them in the next election , they would. Many of the details and legislative language will take some time to do. It should have been done a long time ago but Washington tends not to act until things become a crisis.

  18. hey norm says:

    @MBunge…
    Actually I think Reid’s plan is a pretty reaonable way out. It makes about $1.7T in cuts, and takes a credit of $1T for ending the wars. It doesn’t touch Medicare. And it leaves open the possiblity of expiring the Bush tax cuts.
    I say that not having seen the details…

  19. PJ says:

    I remember a time, not very long ago, when 60 votes was needed in the Senate to pass anything. Do the Republicans have 60 votes in the Senate or has the rules changed?

  20. Rob in CT says:

    @hey norm:

    And it leaves open the possiblity of expiring the Bush tax cuts.

    Which, of course, the GOP will fight tooth and nail.

    Are the $1.7T in cuts backloaded? We don’t really know, right, since we’re just reacting to what journalists are saying about the plan.

  21. hey norm says:

    Rob…
    Well exactly. But there doesn’t have to be a fight. They just expire. The house can try to extend. It won’t pass the Senate, or if it does Obama vetoes. He has already said he won’t extend them again. (I am starting to be annoyed by his rubber spine though) In any case they can’t get 2/3rds to over-ride.
    As for the $1.7T – you are right…we don’t know yet. But even the Ryan plan is based on spending caps and not real cuts.

  22. Wayne says:

    Washington typically does budget plans and projection in 10 year time frames. Many including Republicans understand that some spending cuts and revenue will be planned years from now. However, many including Republicans are not falling for just promises. They are demanding some immediate cuts now and in next year budget. Also they want to put in spending control measure so the later promises will be realized.

    That is why many of us are waiting for the details. We understand there is a big difference between plans that have most of the 2.7 trillion happening in more than 5 years from now, having 2.7 trillion now, 2.7 trillion happening with half in than 5 years from now and half now, etc.

    Republicans don’t expect all cuts to be now but are demanding a good junk of it and they want to put in spending control measure so the later promises will happen.

  23. MBunge says:

    @hey norm: Actually I think Reid’s plan is a pretty reaonable way out.

    How is giving the GOP $1.7 trillion in real cuts and getting nothing in return a better deal politically for Dems than any of Obama’s proposals, all of which required the Republicans to endorse increased tax revenue?

    Mike

  24. Brutalfacts says:

    @MBunge:

    It ends this bull@#$% and allows everyone to move on to other more important things (like the upcoming budget battle). If your going to make a stand, make it on the budget, a govt shutdown causes a short disruption, default is a long term problem.

  25. hey norm says:

    MBunge..
    Well I guess I see it as cutting OUR deficit by $1.7T…which I hope we will see is backlodaed and not immediate. We need to cut spending at some point. If you include Defense it’s not that devastating to find $1.7T.
    I also believe tax revenue is in this – although not explicitly part of the bill – with the expiration of the Bush Tax Cuts. The Obama/Boehner negotiations as I understand them were taking the expiration off the table in exchange for “loopholes”.
    Again – we haven’t seen any details. But I’m OK with the broad outline I think.

  26. markm says:

    @mantis:

    http://blogs.abcnews.com/thenote/2011/07/debt-debate-what-are-the-odds-congress-can-raise-debt-ceiling-by-aug-2.html

    Democrats

    At 2:30 Monday, Senate Majority Leader Harry Reid will unveil his plan – increase debt ceiling until 2013, cut spending by $2.7 trillion including gimmicks that make the number look bigger than it really is

    Republicans

    At 2pm Monday, Boehner presents his plan – $1.2 trillion in spending cuts and an eight to ten month debt ceiling increase followed by more cuts and another vote next year

    As I said in the second post…….

  27. ponce says:

    How is giving the GOP $1.7 trillion in real cuts and getting nothing in return…

    I don’t think it’s the Republicans who are getting Reid’s cuts.

  28. WR says:

    @Wayne: The Republicans keep telling us that the one thing that’s keeping business from hiring is their “uncertainty” about the economy. Now they want to say that maybe they won’t destroy the world’s economy next week, but they’ll threaten to do so again in a few months. What greater uncertainty could there be for businesses?

  29. mantis says:

    That’s why I mentioned multiple sources are reporting this.

    Blogs repeating the anonymous email to Rubin are not multiple sources.

    The other source you posted does not actually confirm what Rubin “reported,” that Reid and Boehner had agreed on a deal that Obama killed. You have no other source for that.

  30. Anderson says:

    I’ve got to say that I find myself baffled at the GOP’s current strategy

    If you read Kevin Drum, your bafflement will lift. The GOP does not want this issue solved until 2013; they want to replay it in 2012. They’re ideologically bankrupt.

  31. Rob in CT says:

    Politically, it’s good for the GOP to keep the deficit/debt issue alive. Doing a deal and “moving on to other things” is NOT in their political interests.

    Both McDonnell and apparently now Boehner have come up with plans that ensure the issue will be once again front and center for the 2012 election, so they can milk it for all the votes it’s worth and then some.

  32. markm says:

    @mantis:

    I don’t care if Obama killed a deal or not…that isn’t the point. I questioned how the Republicans were going it alone when Reid and Boehner were working on their own plans.

  33. ratufa says:

    @Wayne:

    So if Obama can’t get one of his main goals of pushing the issues past the next election, he shouldn’t sign off on it?

    Obama should at least demand one of those two goals (revenue increases or a longer-term extension) in exchange for some of the spending cuts that Republicans want. Otherwise, he’s just asking to be walked over again and again. It’s possible the Reid/Boehner proposal includes revenue increases — I don’t know enough about it to say.

    My opinion is that these negotiations are a circus (insert comment about clowns, here). They’ll be a bigger circus if they happen during the heart of the campaign season, where everyone is going to be even more focused on smooth-talking voters.

  34. mantis says:

    I don’t care if Obama killed a deal or not…that isn’t the point.

    Umm, ok then. I was responding to the passage you highlighted:

    Sen. Reid took the bipartisan plan to the White House and the President said no.”

    I questioned how the Republicans were going it alone when Reid and Boehner were working on their own plans.

    What does that question mean? Boehner is going to bring another Republican bill up for a vote, apparently. That’s the Republicans going it alone. Why they are bothering to do this when they already passed their bill in the House, only to have it fail in the Senate, I have no idea. It’s not like their new plan will be any different. Boehner already said as much.

  35. anjin-san says:

    However if they are more worry about doing what is right

    Hmmm. “Doing what is right”.

    The GOP has expended much energy in the last two years telling us how “uncertainty” is hurting the economy. Beyond uncertainty lies instability, which is the enemy of anyone who has something to lose. We should all be afraid of instability. And the GOP is creating it deliberately.

    “Doing what is right”? Please…

  36. lunaticllama says:

    It’s abundantly clear that Republicans want to create a financial crisis. There’s no other way to explain their behavior.

  37. george says:

    at least $1 trillion of that is actually projected future savings from ending the war in Afghanistana and the American deployment in Iraq, exactly the kind of accounting gimmick that fiscal conservatives have rightfully condemned in the past.
    why is this considered a gimmick? end unnecessary wars –> save money otherwise wasted on unnecessary wars. what am i missing?

    I was wondering the same thing – pulling back overseas troops strikes me as a very real and obvious saving – about as concrete as it gets in fact.

  38. hey norm says:

    Here’s Boehner’s power point presentation.
    Again with a balanced budget amendment that has no chance of passing, and a refusal to consider tax increases to help in solving a problem caused by too-low tax revenues.
    http://www.politico.com/static/PPM156_boehner_conference_072511.html

  39. hey norm says:

    Reids proposal which the WH has endorsed:
    $2.7T – includes $1.2Ttrillion in discretionary spending cuts, $100 billion in mandatory savings, $1 trillion savings from the wars, and $400 billion in interest savings. It also establishes something called a ‘Joint Congressional Committee to Find Future Savings’.
    Sort of like 43 looking under the sofa for WMD I suppose.