The End of Debt-Ceiling Hostage Taking

Greg Sargent had a good post yesterday explaining why Democrats are so adamant that they will not give any concessions for raising the debt ceiling:

Democrats, by contrast, don’t believe this constitutes acceptable governing. They don’t believe budget negotiations should proceed under these conditions. They are not making an argument about what the House majority can legally or Constitutionally do; they are making an argument about what they believe the House majority should and shouldn’t do, about what does and doesn’t constitute good governing. They are making an argument about governing norms. The Dem argument is that this practice should be renounced by both sides. Dems believe making concessions under these conditions now will legitimize the GOP demand for negotiations to happen under them, making default later all but certain, because this sort of standoff will happen again and again, ultimately leading to miscalculation and disaster.

Bingo. The key here is that Republicans only have leverage to extract concessions out of Democrats if they really are OK with breaching the debt limit. There are some who are, but the House GOP leadership isn’t. That’s been abundantly clear for weeks now as Boehner has repeatedly commented that the U.S. cannot default on its debts. It’s even clearer if you look at how House Republicans have ramped down their demands.

After Boehner’s plan fell apart in the House yesterday, Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell stepped back in and quickly brokered a deal that would stave off a default. It funds the government until January 7 and raises the debt ceiling until February 15 while strengthening the income verification requirements in Obamacare. It does not include a delay of the reinsurance fee, of the medical device tax or a ban on the Treasury Department’s use of extraordinary measures. It also sets up a bicameral conference committee with the goal of coming to a budget agreement by December 13.  Make no mistake: this is a Republican surrender. The income verification condition is simply an enforcement of current law. The rest is a clean CR and clean debt ceiling hike, exactly what President Obama and Democrats have been calling for the past month.

Due to parliamentary rules, a single senator (cough Ted Cruz cough) could drag out the Senate bill so a vote doesn’t take place until Saturday or Sunday. If all senators agree by unanimous consent to forego debate on the bill, it can be voted on today and head to the House, but that requires the agreement of all senators. If the bill originates in the House and is passed, the Senate can take it up and vote on it soon after. Thus, House Minority Leader Nancy Pelosi is pushing Boehner to bring it to the floor to speed up this entire process. No matter what though, it looks like the speaker will allow a vote on the bill, which will then pass with mostly Democratic support.

There is a more important point here: This is the end of debt-ceiling hostage taking.

It’s over. Boehner and Co. capitulated completely, because their entire strategy was a bluff. This deal proves that Republicans aren’t willing to breach the debt limit. If Boehner ever threatens to do so again in the future, no one should take it seriously. He no longer has the credibility to make those threats. The debt limit is not an extortion device. A minority party cannot use it to extract a policy concession from the majority. This is the new governing norm.

Being Honest with the Tea Party Doesn’t Work

One of the main criticisms of House Republican leaders, particularly Speaker John Boehner (R-OH), the past two weeks is that they lied to the Tea Party about what they could actually accomplish during these fiscal fights. It’s not particularly surprising that Obama isn’t negotiating or that Republicans are being overwhelmingly blamed for the shutdown. The thinking goes that if only Boehner had informed his members at the beginning that they had no chance in these fiscal fights, then it would be easy to cut a deal right now. But why?

What makes anyone think that the Tea Party would be less intransigent if Boehner and Co. hadn’t overpromised at the beginning?

Here’s a counterfactual: On September 28, Boehner holds a meeting with all his members and tells them the truth. President Obama really isn’t going to budge. He’ll allow a government shutdown and may even allow a default if necessary, because he believes these fights are about more than Obamacare. He believes they are about not setting the precedent for the minority party to use the budget and debt ceiling as leverage to extract policy concessions from the majority. Boehner says he doesn’t agree, but that’s the president’s stance and he’s not going to budge. He also tells them that it’s highly likely that Americans will blame Republicans for any shutdown or default and it could potentially risk their House majority in the midterm elections. Boehner even tells them that a default would be catastrophic and they can’t allow it to happen.

How do the Tea Party members react to that? Do they listen, synthesize everything the speaker said and agree to fight another day? Not at all.

That’s because, as Business Insider’s Josh Barro put it, they are living on another planet. Polling doesn’t mean anything. Breaching the debt ceiling wouldn’t be that bad. President Obama caved in 2011 so he’s bound to this time too.

Wrong. Wrong. Wrong. But these conservative members don’t care. They are on a blind crusade against Obamacare and will do everything in their power to stop it. It doesn’t matter what Boehner tells them. His words affect their mood, not their perception of reality.

If Boehner says that the president will cave and they have a real shot at taking down Obamacare, they cheer and support the speaker. That’s exactly what they want to hear.

If he tells them the truth like I outlined above, they sit in silence and find ways to undermine him. They simply won’t believe what the speaker says.

Being honest with these conservative members doesn’t work, because they simply don’t believe it.

Some journalists think that Boehner raised their expectations over these fiscal fights and that the intense Tea Party opposition is a result of their expectations not being met. But the Tea Party expected to stop Obamacare, no matter what the speaker said. Boehner just convinced them that he believed that they could stop Obamacare. That may have stoked their enthusiasm, but it didn’t change their expectations or their willingness to do anything to stop the law.

From Boehner’s perspective, this lie kept his party unified for a little bit longer while he searched for any way out. The Tea Party was always going to be furious by whatever deal he cuts, because it won’t substantially undermine Obamacare. If he had told them that at the beginning, he would’ve immediately split his party in half and put himself in an even worse negotiating position. Lying to them kept his members united and gave him time to work out a deal. It didn’t stoke their anger or increase their opposition to the eventual deal. That was coming no matter what.

SHOCKER: It Was All A Bluff

Looks like the House is moving forward with their own bill this morning. Here are the details, from Robert Costa:

  • Continuing Resolution until 1/15
  • Debt Ceiling increase until 2/7
  • Vitter Amendment for members and cabinet members
  • Two-year medical device tax delay
  • Income verification
  • Ban on the use of extraordinary measures

That’s it. Nothing that really undermines Obamacare and no risk of heading over the debt limit. It’s still unclear if this can pass the House. It will likely get little, if any, Democratic support and many House conservatives are not going to be happy. In addition there isn’t anything that Senate Democrats will like so I’m sure they will reject it. I imagine Boehner may still have to break the Hastert Rule in the end with a bill somewhere in between what currently exists in the Senate and this one.

But look at how far the House has come! Boehner was never going to allow us to default. That’s abundantly clear now. In addition, he watered down the Vitter Amendment at the last second because he knew all along how awful it would be for congressional aides. It’s what everyone has been clamoring about for weeks. The House GOP finally admitted it at the last second. As for income verification, this is already part of the law and a number of conservatives have already rejected it as meaningless. A ban on extraordinary measures is a minor concession (and something I support).

That’s what House leadership is now PROPOSING. That’s their offer for opening the government and raising the debt ceiling. In addition, it seems that House Republicans are relatively unified behind this plan (Robert Costa reporting that there won’t be a revolt). We’ll see if that holds true in the end, but it’s important to realize how far the House GOP has come in their demands. They said all along they were willing to breach the debt ceiling if Obamacare wasn’t stopped. Instead, they’re accepting a corporate tax delay, a benefit cut for members, enforcing a part of Obamacare that already exists and a ban on a technical method to extend the debt ceiling. It confirms they were bluffing the entire time.