Boehner’s Shutdown Strategy is Working Out Pretty Well

October 7, 2013October 7, 2013Danny Vinik 4 Comments

Democrats are still underestimating this man.

We’re into the second week of the government shutdown and rapidly approaching the debt ceiling deadline. Republicans are overwhelmingly taking the blame for the shutdown and still have no leverage in the negotiations. Democrats are still unified in their support for a clean continuing resolution. That doesn’t sound like a good situation for Speaker John Boehner (R-OH) and his party, right? Wrong.

In fact, this shutdown has worked out pretty well for Boehner. He’s kept his party unified while slowly ramping down their demands. Liberals dismiss the importance of party unity too quickly. They have clamored for the past week that the speaker should bring a clean CR up in the House and allow a vote on it. Such a bill would likely pass (despite Boehner’s bizarre refutation of that yesterday) and the shutdown would end. But this ignores the political reality of the situation. Conservative Republicans would go crazy at such a move. They may try to challenge Boehner’s speakership. Club for Growth and other conservative organizations may immediately look to primary moderate Republicans who voted for the bill. If these outside groups didn’t have much power, then Boehner and moderate Republicans could ignore them. But they are powerful. They have money and an influential grassroots networks. The Tea Party can’t simply be brushed away as an inconvenience. This means that a clean CR is simply not an option. Liberals who call for Boehner to bring one to the floor are ignoring the political dynamics that exist in the Republican party.

Another positive for Boehner is that he has a successfully merged the government shutdown and debt ceiling fights. It quickly became apparent last week that any shutdown deal would have to raise the debt ceiling as well as there was not time for two fiscal fights. Yet, this is a huge win for the Republican Party. Whatever final deal that the parties work out, Republicans will be able to tell their constituents that they broke Obama’s promise not to negotiate on the debt limit. If Boehner had split his party in half and passed a clean CR, he would’ve faced a debt ceiling fight a few weeks later and Obama would have held firm on not negotiating. In the end, Boehner would have had to raise the debt ceiling without getting anything in return (or anything remotely substantial). He understands how catastrophic a default would be and would never have allowed it to happen. In order to show that he extracted concessions out of Obama for raising the debt ceiling, he had to combine that fight with the one over the budget. He has accomplished that as well.

The Republican party is also taking a political hit each day the shutdown continues, but it’s highly unlikely to threaten their majority in the House and that’s what really matters. It may make it more difficult for them to take back the Senate, but with Obama in office, a Republican Senate won’t accomplish anything anyways. Politically it might help them for the 2016 presidential election, but controlling both houses of Congress in 2014 won’t allow Republicans to accomplish much legislatively. If the shutdown truly risked their House majority, it would be a big deal, but it doesn’t. In addition, the piecemeal bills the House has passed to fund the politically toxic aspects of the shutdown have given Republicans a talking point they can use to deflect blame. The political consequences of this shutdown simply aren’t very large.

Part of that is because the shutdown is actually not that harmful. The negative economic effects are minimal, especially with half of the furloughed workers returning to work today and all of them receiving back pay for their missed work. In fact, 83% of government spending is happening as scheduled. That’s not to say that the other 17% is minimal. It isn’t. There are some truly terrible parts of this crisis – NIH patients not receiving cancer treatment and research ruined – but it’s a sad truth that the effects of the shutdown are limited. Most Americans aren’t feeling them and the national parks and monuments being closed – while frustrating and disappointing to many tourists – isn’t a big deal. The longer the shutdown continues, the more it will become a true crisis that requires an immediate solution. But it will likely be over in less than two weeks as both parties understand the need to find a solution before we breach the debt ceiling. The effects of a government shutdown from October 1st to October 17th aren’t that big.

Finally, Boehner may earn his party substantial policy concessions from Obama and Senate Democrats. If the speaker had listened to all those calling for a clean CR, he would’ve received the sequester level cuts and nothing else, including nothing in return for raising the debt ceiling. Now, he has already locked in sequestration and will receive something else for a combined deal on both the government shutdown and debt ceiling. That may be the repeal of the medical device tax, some larger deal with chained CPI or a mechanism to spur tax reform. Whatever it is, it’ll be more than he would’ve accomplished by passing a clean CR, all while keeping his party unified and limiting the negative political consequences of the shutdown. The Tea Party will likely be angry at the final deal as some are OK with breaching the debt limit, but Boehner and moderate Republicans can turn to them and say they did absolutely everything they could to fight Obama and Senate Democrats.

It’s easy for liberals to look at Boehner’s position and see a weak leader who has no strategy or endgame and is terrified of the Tea Party. That’s not an entirely wrong description, but it doesn’t mean he is ineffective and it ignores the fact that Boehner has accomplished quite a bit the past week. Once again, Democrats are underestimating him.

Americans Reject Using A Government Shutdown To Legislate

October 1, 2013Danny Vinik 5 Comments

Yesterday evening, President Obama gave a short speech where he urged Congress to pass a continuing resolution to prevent a government shutdown and criticized Republican leaders for attempting to extract concessions from him without giving anything up themselves.

“[O]ne faction of one party in one house of Congress in one branch of government doesn’t get to shut down the entire government just to refight the results of an election,” Obama said. “Keeping the people’s government open is not a concession to me. Keeping vital services running and hundreds of thousands of Americans on the job is not something you give to the other side. It’s our basic responsibility.”

In fact, Democrats have already agreed to a deal with Republicans where they are giving up something and the GOP isn’t. It’s the clean CR that keeps sequestration. Democrats are giving billions in budget cuts to Republicans, who are giving up nothing. Yet, a small, but powerful group of conservative House Republicans won’t even consider that deal and House Speaker John Boehner (R-OH) won’t bring up the bill out of fear of them. If he did take the political risk and bring the clean CR to the floor, it would pass with a large majority, the Senate would pass it and the government shutdown would end, all with a bill in which Democrats make concessions and Republicans don’t.

Now, imagine if Republicans were looking to cut spending beyond sequestration ($986 billion in discretionary spending) to the level laid out in the 2014 Ryan Budget ($967 billion). Under this scenario, the Republicans starting position would still be absurd as the Senate Democrats original 2014 budget set spending at $1,058 billion. The sequester has already trimmed that to a $986 billion. Reducing it all the way to the levels of the Ryan Budget would be an outrageous demand. But at least that demand would have to do with levels of federal spending. There would be a very clear, logical connection between the government funding and the Republican position. But Republicans aren’t asking for anything related to federal spending right now. It’s all about finding ways to undermine Obamacare. That’s what sets this government shutdown apart from previous ones.

This is the 18th government shutdown in U.S. history. Here’s how the causes of them breakdown (thanks to Wonkblog’s Dylan Matthews for the great roundup):

9 were caused by disagreements over spending levels on certain programs, projects, departments or the entire government (1976, 1978, 1981, 1982 #2, 1983, 1987, 1990, 1995, 1996)
4 were caused by disagreements over whether Medicaid dollars could go towards abortion (1977 #1, 1977 #2, 1977 #3, 1979)
2 were caused by disagreements over Civil Rights legislation and a couple of projects (1984 #1, 1984 #2)
1 was caused by disagreements over labor contracts and welfare expansion (1986)
1 was caused by negligence (1982 #1)

In nearly every shutdown, the two parties disagreed on issues related to levels of funding or how federal spending would be used. These were differences of opinion directly related to budget negotiations. In almost every situation, there was an actual negotiation and each side compromised to find a solution. It required a government shutdown, but the structure for negotiations always existed as the initial starting positions for each party were related to federal spending.

There were a couple of occasions where that was not the case, such as when Democrats attempted to enact a Civil Rights law in 1984 and ensure that the FCC enforced the “Fairness Doctrine” in 1987. However, the party looking to use a government shutdown to legislate always lost. Democrats eventually relented on the Civil Rights legislation and the “Fairness Doctrine.” This doesn’t mean that it’s impossible to enact legislation unrelated to federal spending during a government shutdown, but it has never succeeded before. The main reason for that is that negotiations over funding the government are supposed to be just that. They aren’t supposed to be a place where one party can extort the other.

Yet, this is what House Republicans are trying to do. They are trying to force the Administration to delay or defund Obamacare in order to fund the government at a level that everyone agrees on. When a final agreement is reached (or Republicans relent), the CR will almost certainly be set at $986 billion. Republicans aren’t concerned about spending levels. They are using the government shutdown to legislate. This is exactly what President Obama said in his remarks earlier today as well.

“No, this shutdown is not about deficits,” he said. “It’s not about budgets. This shutdown is about rolling back our efforts to provide health insurance to folks who don’t have it. It’s all about rolling back the Affordable Care Act.”

Fortunately, Americans seem to be well aware of what Republicans are trying to do and are wholeheartedly rejecting it. A Quinnipiac Poll today found that 72% of respondents disapprove of Congress using a government shutdown to block Obamacare. Just 22% approve of the tactic. This is in stark contrast to the overall approval rating of the law, which sits at -2% (45% in favor, 47% opposed). That demonstrates that Americans disapprove of the Republican’s tactic of using a government shutdown to legislate.

If the numbers were reversed, Democrats would face political pressure to adjust the law. It would alter the dynamics of government spending negotiations forever – allowing the party not being blamed for the shutdown to enact legislation via extortion. That’s not a proper way for our government to function. By overwhelmingly rejecting the Republican’s strategy, Americans are sending a message loud and clear: using a government shutdown to legislate is not acceptable. Hopefully, Republicans get the message soon enough.

Americans Still Don’t Understand the Debt Ceiling

October 1, 2013Danny Vinik 2 Comments

I don’t mean understand it in terms of what it actually is (though I don’t think they understand that either). They don’t understand the consequences of it. Breaching the debt ceiling would be catastrophic, causing irreversible long-term effects on our debt and economy. That’s not hyperbole. The market doesn’t believe that we will breach the debt ceiling, because it would be too idiotic for John Boehner to allow that to happen. The current government shutdown is a drag on our economy and harms many different aspects of people’s daily lives. But a default is many orders of magnitude worse. Yet, a new Quinnipiac Poll today suggests that Americans are a bit confused about which is more dangerous: breaching the debt ceiling or a government shutdown.

Raising the debt ceiling is non-negotiable.

The poll finds that by 72% to 22% margin, Americans do not want Congress to shut down the federal government over Obamacare. That’s good. However, a smaller margin (64% to 27%) do not want Congress to default over Obamacare. It’s good that in both cases Americans understand that it’s not acceptable to use a fiscal crisis as leverage to extort the opposite party. But these polls demonstrate that more Americans are OK with that extortion when the hostage is the debt ceiling than when it is government funding,

That’s backwards and needs to change. Part of the reason for this may be because this poll was conducted over the weekend, right before a government shutdown, while a possible default is still a few weeks away. Nevertheless, the media must do a better job explaining the consequences of a default to the American people. There should be no pretense that there will be negotiations over the debt ceiling. That’s not how this works. President Obama screwed up in 2011 by negotiating over it, but that was an outlier. It did not set a precedent.

Speaker Boehner will raise the debt ceiling, because if he doesn’t, it will go down as one of the single worst actions a legislator has done in the history of the United States. Once again, that’s not hyperbole. We need to stop treating this as a back-and-forth game, trying to guess what the speaker will do, and start calling it what it is: a foregone conclusion. Boehner will raise the debt ceiling, because it would be apocalyptic not to. The American people need to know that as well.