If Congress doesn’t vote to raise the debt ceiling by the end of September, America will default on its debt. This would (almost certainly) damage our nation’s credit rating; swell the costs of future government borrowing (and, thus, increase the national debt); tank the stock market; reduce economic growth; and dramatically increase the Democratic Party’s chances of winning back the House next year.
Which is to say: Congressional Republicans have no leverage in the upcoming fight over raising the debt ceiling.
This reality is so obvious, even a president could understand it. Donald Trump loves legislative hostage-taking — and has a knack for overestimating the amount of leverage he has in any and all negotiations — but even he has figured out that threatening to engineer a recession is not in his party’s interest: The White House has come out in favor of a “clean” debt-ceiling increase.
Alas, the House Freedom Caucus lacks Donald Trump’s humility and commitment to reason. These far-right Republicans believe that voting to allow the Treasury to borrow more money — so as to finance the spending that Congress already voted for — is a crime against America’s grandchildren. (They also believe that the GOP should pass a tax plan that increases the deficit, and that the federal government must do everything in its power to ignore climate change.)
Thus, they see voting to not trigger a recession as a major ideological concession to the left — one that should earn them some kind of reward. During the Obama years, there was a political logic to this delusion-induced brinkmanship: Since voters tend to blame the president’s party for anything bad that happens on his watch, Democrats had more to lose from default than Republicans did. Threatening to sabotage the economy unless your political rivals agree to advance your unpopular policy priorities was always a morally odious gambit; but in 2013, it was, at least, a logically coherent one.
In 2017, however, Donald Trump needs at least eight Senate Democrats to put country before party, and decline to sabotage the economic growth he inherited. And that means that Paul Ryan needs to pass a bipartisan debt-ceiling bill with the help of House Democrats — which means he’ll need to write off any hope of the House Freedom Caucus’s support, which means, the House Freedom Caucus has no leverage.
But Ryan is going to have a hard time getting them to appreciate this fact. Or so this dispatch from the Huffington Post suggests:
House Freedom Caucus Chairman Mark Meadows (R-N.C.) told HuffPost this week that conservatives have proposed a menu of options to GOP leadership. Their ideas include adding debt prioritization language to a limit increase, which would prioritize Treasury debt payments ahead of other spending, and codifying the Trump administration’s informal rule ― one regulation in, two out. Freedom Caucus Republicans are also open to making around $250 billion in mandatory spending cuts, as well as attaching a debt ceiling raise to their health care bill.
… [T]here’s a growing sense among conservatives that Ryan’s position is more tenuous than he anticipates, especially if he passes a clean debt ceiling raise with the help of almost every Democrat and a small coalition of Republicans.
“It would be extremely difficult for a Republican speaker to put forward a clean debt ceiling and look his conference in the face and believe he’s done a job well done,” Meadows told HuffPost.
What exactly that means is unclear — Meadows wouldn’t say more. But Republicans speaking on the condition of anonymity were more candid, with one member saying that if Ryan puts forward a clean debt ceiling raise, “it becomes the start of the end for the Ryan speakership.”
Another conservative member summed up Ryan’s position this way: “He doesn’t get it. He’s not going to make it to tax reform if he doesn’t get through this.”
House conservatives could, theoretically, launch a mutiny that costs Paul Ryan his gavel. But even if we assume that threat is credible, eight Democratic Senators aren’t going to vote for $250 billion in entitlement cuts — or Trump’s mindless regulatory rule — so as to save Ryan’s speakership.
Perhaps the Freedom Caucus believes it can coerce Mitch McConnell into abolishing the filibuster. But McConnell has been adamant in his opposition to that idea, and it’s far from clear that there are 50 votes in the Senate for the Freedom Caucus’s priorities.
At this point, a “clean” debt-limit increase is probably the best Republicans can hope for. Since Ryan will (almost certainly) need to rely on Democratic votes to get the deed done, he may be forced to appropriate the Obamacare funds that president Trump keeps threatening to revoke.
Assuming Ryan is more afraid of a recession than a right-wing challenge to his speakership, the debt ceiling will get raised. But the aftermath will be bitter. How Ryan will manage to unite his caucus around a government spending bill — let alone tax reform — in that environment is anyone’s guess.
Here’s hoping speaker Gohmert has an easier time of things in 2018.
