Photo-Illustration: Intelligencer; Photo: Getty Images
the national interest

Kevin McCarthy Wants to Negotiate? Fine, Let’s Talk Taxes.

Exposing the hostage scheme with one simple word.

Photo-Illustration: Intelligencer; Photo: Getty Images

Perhaps because he has never convincingly inhabited the persona of a true leader but attracted sympathy as a sad sack, House Speaker Kevin McCarthy has won over much of the Washington, D.C., press corps and business elite with his putatively earnest pleas to just talk. “Had the president agreed to negotiate in good faith, we’d already be done,” McCarthy moaned. “If President Biden decides to stop the partisan games and stand with us, then our majority will join with him in common cause to address this urgent challenge,” he promised. “I’m not predetermining what has to happen,” McCarthy said in a speech that sought to cast Biden, who has repeatedly called for a debt-limit increase, as the person standing in the way. “I want a responsible, sensible debt ceiling that puts us on an economic path to make America stronger.”

McCarthy, in this version of the story, is not a hostage-taker but a lonely, almost desperate politician whose only wish in life is to engage in good-faith negotiation over the deficit. “McCarthy isn’t looking for some global agreement to reshape U.S. society,” insists Punchbowl on his behalf. And even some Democrats are taking this claim at face value. “We should never say we’re not going to speak to folks across the aisle. I don’t think that’s a sustainable position,” Representative Jared Moskowitz told CNN.

The dishonesty of this plea can be exposed with one word: taxes. If McCarthy really wanted nothing more than a good-faith negotiation over the budget, the parameters of the discussion would include both revenue and outlays. But nobody thinks McCarthy would ever accept tax increases — he would assuredly prefer to lift the debt ceiling by a quadrillion dollars than raise the top income-tax rate by a single point.

Everybody knows McCarthy isn’t going to entertain tax increases as part of any deal. That understanding is fully baked into the analysis you see in the media every day. But making that background assumption explicit clarifies something that conventional wisdom, with its eagerness to placate the House hostage-taking scheme, has been eager to obscure: The debt-ceiling-extortion drama is not an attempt to start negotiations over the budget deficit. It is an attempt to avoid them.

The way the system is supposed to work is that political parties have two ways to meet their policy objectives. One is to gain full control of government and pass their agenda. If that fails and they only have partial control of government, the fallback is to make trades with the opposing party. Think of 1997, when Democrats gave Republicans a capital-gains tax cut in return for creating the Children’s Health Insurance Program. Or the Obama era, when Democrats got higher domestic discretionary-spending levels in return for giving Republicans more in military spending.

Republicans are fixated on debt-ceiling extortion, because it allows them to advance their goals without either winning full control of government or making trades with Democrats. And while it’s true that they are not demanding the full and complete enactment of their cuts-only vision of deficit reduction, the entire idea is to advance it as far as it can go without giving Democrats any policy concessions in return. Republicans have attempted to justify their hostage-taking by citing past deals in which the parties attached other terms to debt-ceiling hikes. But those were deals — policy changes that both sides wanted and could move in conjunction with a debt-ceiling increase. They were not one-sided extractions of concessions from the other party.

McCarthy is pleading that he merely wants to extort some small concessions, which reveals that the terms of the ransom are not the point. The point of the exercise is to reestablish the precedent that a Republican Congress can extort concessions from a Democratic president. (All sides understand that this is the only governing combination in which policy concessions are expected to be traded for a debt-ceiling hike: Democrats never extort Republican presidents, and obviously, neither party extorts a fellow-partisan president.) Once this precedent is established, Republicans can ratchet up their demands in future negotiations, and every single one will carry some risk of catastrophic default.

All of the rhetoric supporting McCarthy’s stance has hinged on the pretense that he is asking for genuine negotiations. “Our position has been — and it’s no surprise from a bipartisan perspective — that the solution here has to be negotiations,” the Bipartisan Policy Center’s G. William Hoagland told the Washington Post. “When you have a divided government, let’s be honest and make a compromise.”

Well, fine. If Biden wants to announce he is willing to attach the debt ceiling to deficit negotiations that entertain revenue and spending levels alike, he can do that. But McCarthy isn’t going to accept it, and everybody knows this. If Biden wishes to play along with McCarthy’s farcical claim that he wants to negotiate the deficit, he should insist on a real negotiation with taxing the rich on the table.

Kevin McCarthy Wants to Negotiate? Fine, Let’s Talk Taxes.