It is highly likely that the Republican Party will win control of the House of Representatives in the midterm elections. It is also highly likely that they will attempt to melt down the global economy as part of an extortion threat. And it is apparently the case that nobody has yet formulated a plan to avert this catastrophe.
The mechanism by which this might occur, in case you have forgotten or repressed the memory, is the debt ceiling. The debt ceiling is a completely superfluous and mostly accidental feature of the American political and economic system. Spending and tax levels are set by Congress, which (since the Reagan era) has usually created budget deficits, but Congress also needs to take completely separate votes to authorize the borrowing needed to finance the debt. If Congress refused to authorize these debts, it would throw into question the Treasury Department’s heretofore unquestioned reliability in paying its debts, threatening the value of the world’s most secure investment and potentially triggering a global financial crisis.
The possibility that Congress would trigger such a catastrophe was never seriously considered until 2011. The incoming Republican Congress insisted that existing deficit levels were catastrophically dangerous and also refused to compromise on any solutions to this supposed crisis, instead insisting that Obama accept their plans to redress it. In lieu of negotiation, they used the debt ceiling as an extortion threat to compel him to accept their policy demands without compromise.
The plot ultimately failed, but it was a near-run thing. The Republican leadership was largely helpless to talk reason into its militant right wing, flailing about through multiple tantrums before finally muddling through to a surrender. Now that Republicans are on the cusp of power again, they are predictably planning to run the same play.
Missouri Republican Jason Smith, an ally of House Minority Leader Kevin McCarthy and a prospective chair of the Ways and Means Committee, tells Alayne Treene he would insist the Biden administration “reverse” its “radical” policies as the price for lifting the debt ceiling. Smith reprised the old hostage-taking rhetoric that if Biden refused to pay the ransom, he would be the one responsible for the hostage’s death: “If Republicans are trying to cut spending, surely he wouldn’t try to default. If we were trying to bring down inflation … trying to secure our border, surely he wouldn’t default.”
Compared to a decade ago, the Republican caucus is considerably more insane. The definition of a crazy House Republican in 2011 was an Ayn Rand reader who thought Obama was turning the United States into Greece and might have been born in Kenya. The definition of a crazy House Republican today is somebody who thinks the Democratic Party is controlled by a secret cabal of pedophiles and maybe favors armed revolution. And while John Boehner, who had little in the way of principle or intelligence, was barely able to wrangle his caucus into backing down, McCarthy has an even crazier caucus and even less principles or brains than Boehner.
The business community, which stands to become collateral damage if the bomb goes off, is muttering its concerns to Axios. A better plan might have been securing rock-solid promises not to use the debt ceiling as a weapon as a condition for gaining support, but that would be more farsighted than any course of action the business lobby is capable of undertaking.
At this point, Democrats need to begin planning to sabotageproof the government in the event of a Republican takeover. Until January, Democrats have control of Congress and can raise the debt ceiling as high as they want with just 50 Senate votes. Both parties are traditionally reluctant to vote for high increases in the debt ceiling because voting to authorize more debt sounds like they’re voting to increase the budget deficit.
But at this point, they need to assume it will be impossible to lift the debt ceiling beginning in January, bite the bullet, and take one vote to raise it high enough that they won’t need to take the vote again. There’s no point in temporizing. Lifting the debt ceiling by a trillion dollars isn’t going to be less politically painful than 2 or 3 trillion dollars.
Democrats need to take one vote to raise the debt ceiling by a quadrillion dollars. Would that vote sound bad in attack ads? Yes. Would it sound worse than a vote to raise the debt ceiling by $500 billion or $1 trillion? Not really. To most voters, any number ending in -illion sounds about as big as any other.
The debt ceiling is not a mechanism that encourages fiscal responsibility. (This was perfectly obvious in the last cycle when Republicans used it as an alternative to compromising on deficit reduction and then gained power and promptly returned to increasing the deficit.) It is more like a self-destruct button that’s installed in your car for absolutely no reason. Its only function is to create risk and reward whichever political party can credibly threaten to be deranged enough to use it. If Democrats haven’t dealt with this threat by the time Republicans assume power, it will already be too late.
