Debt Ceiling Hostage Enablers

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Pictured (L-R): Eric Cantor, John Boehner, the debt limit. Photo: Working Title/Polygram/The Kobal Collection

The House Republicans’ averred position of making the occasion of a debt ceiling hike into a high-stakes negotiation is a new and dangerous turn in American politics. Fortunately for them, it is not being treated as such.

Consider recent columns by Ross Douthat, Ramesh Ponnuru, and Megan McArdle. All are right-of-center columnists but not reliable Republican water carriers. If the GOP were to receive signals that it is going beyond the pale and risking an extreme backlash among elites, these sort of writers would be the canary in the coal mine. Instead, they are sending the opposite message.

Douthat and McArdle do disavow debt ceiling hostage-taking. But, in pox-on-both-houses, assert that the prospective response of minting platinum coins is just as bad. (McArdle: “Silly loopholes are exploited for bargaining power, and the resulting stalemates are generally solved with a temporary patch that solves the immediate problem by creating a bigger one down the road.” Douthat: “One party behaves irresponsibly, the other side counters with a wave of irresponsibility of its own.”) And so, if Republicans do refuse to raise the debt ceiling, they can assume that the result will not be a wave of abhorrence directed at them but instead a diffuse disgust at Washington in general, perhaps accompanied by more calls for third parties, as happened the last time Republicans flirted with financial disaster in 2011.

It’s true that, as a matter of procedure, the platinum coin gambit is just as much of a boundary-pushing exercise as debt ceiling hostage-taking, technically legal but violating the spirit of the law. But one is an exercise in boundary pushing that deliberately creates the risk of economic chaos in order to advance partisan ends. The other gambit is an effort to forestall economic chaos. Surely there are important differences between pushing the legal line to create a weapon and pushing the legal line to defuse one. And yes, both McArdle and Douthat argue that Republicans might retaliate by taking even crazier and more dangerous positions, but that again does not make defensive measures against destructive threats anything like an equivalent to threats themselves.

For pure sophistry, it’s hard to outdo Ponnuru’s defense of hostage tactics on the debt ceiling. The normally logical Ponnuru concedes that the debt ceiling has to rise, but the Republicans might as well jack up President Obama while they’re doing it. Why? One reason is that federal budget policy kind of stinks: “[N]obody is forced to take responsibility for the gap between revenue and commitments,” he writes, “Bills to raise the debt ceiling are the only occasions when congressmen and the president come close to doing so.”

Of course this would work just as well as a justification for a Democratic Congress facing a Republican president refusing to lift the debt ceiling without a tax increase. Ponnuru here also ignores the fact that Obama is pleading for Republicans to negotiate over the long-term budget, and wants a half-and-half mix of new revenue and spending cuts (having already cut spending by $1.5 trillion and increased revenue by $600 billion), but Republicans are refusing to compromise at all. So Obama is trying to force Congress to take responsibility for the gap between revenue and commitments, but Congress would rather just threaten economic catastrophe to get its way without compromise instead.

Ponnuru proceeds to venture into freshman-year-philosophy land by insisting, “For Democrats to say that no conditions should be attached to the bill is to attach a condition.” What does this even mean? The point is that it’s dangerous to attach a negotiation to an event that both sides recognize will cause irreparable harm in the absence of an agreement. The administration’s argument is that the debt ceiling has to be raised, so threatening not to raise it under any conditions at all is irresponsible. Entangling the vote in negotiations is to create a risk that the negotiations fail by a certain date and cause huge damage.

If the two sides agree the debt ceiling should go up, then having a vote on that one thing is not a condition. Adding policies on which they may disagree is a condition. It turns a question on which the two parties agree (let’s not blow up the world economy) into one on which they disagree (what is the appropriate level of federal spending, and/or how much should Republicans get in return for not blowing up the world economy?).

Possibly the most disturbing thing about Ponnuru’s column is that at no point does he consider the possibility that Obama actually will hold firm and refuse to pay a ransom. He only imagines a successful ransom-and-release scenario from which he will (ideologically) profit — like William H. Macy's character in Fargo, he never considers the possibility that the negotiation won't be easily and simply resolved.

Ultimately, though, Obama’s strongest leverage lies in persuading Republicans that he won’t succumb to a ransom. Unfortunately, he has done little to persuade them so. Noam Scheiber has more reporting on the January 1 tax deal from the perspective of Senate Democrats, who believe they were on the verge of forcing a total victory, only to have the Obama administration undercut them at the last minute. His account lends credibility to the impression that Obama, fearing the risk of a situation that actually threatened Republicans more than him, left some dollars on the table at the last minute.

The flipside of this is that the White House also feared that Senate Democrats would undercut them if the issue went on. Basically, each of them feared the other would sell it out. Which is, of course, a horrible negotiating dynamic. And again, the problem here is not the dollars Obama may have left on the table (or may not have — we can’t be sure). It’s that as the deadline neared, Obama suddenly softened his position, and Republicans came away believing that Obama will blink in a last-minute confrontation. What makes this disturbing is that, unlike the phony “fiscal cliff,” the debt ceiling deadline is very real.