How the Debt Ceiling Came to Be a Political Cudgel
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Over the weekend, Germany conducted a hard and close-fought election with calm, ease and not a peep about voter fraud or fake news — a sharp contrast, several observers noted, to the mess that is contemporary American electoral politics. And now we’re getting another lesson in American political dysfunction: the fight over whether and how to raise the debt ceiling.
Coming amid the endgame maneuvering around President Biden’s infrastructure bill, his $3.5 trillion reconciliation package and a looming deadline to fund the government, this debate is absurdist theater at its worst. The debt ceiling is a century-old, artificial limit placed on how much the United States can borrow to fund its existing obligations, a limit that Congress could do away with, but remains in place because it is always caught up in short-term political calculations.
Raising the limit used to be a bipartisan nonevent. But, like everything else in Washington over the last 15 years, it has been sucked into the tornado of no-holds-barred politics. In 2006, the Democrats, including then-Senator Joe Biden, refused to support a debt-limit increase by the George W. Bush administration and the Republican majority in Congress, as a protest over the Iraq war and tax cuts. In 2011 and again two years later, the Republicans tried to use their potential support as a bargaining chip, to force the Democrats and Barack Obama to concede on spending cuts.
Each time, columnists and Treasury officials warned about the consequences of default, should the limit not be raised. And each time, in the end, Republicans and Democrats reached a deal, and the crisis was averted.
Things feel different this time, though — not because we’re at any more risk of default, but because of what the details of the fight show about the danger of government dysfunction.
As my colleague Jim Tankersley has noted, this time there’s no demand from the Republicans, no attempt to win concessions from the Democrats. They simply refuse to engage with the issue. And the Democrats, who see the mounting debt as at least partly the result of Donald Trump’s 2017 tax cuts, but who could also act unilaterally to raise the limit, are holding out, in hope of forcing the Republicans to vote for the debt increase and therefore own a piece of it.
The whole situation has a darkly comic, Strangelovian aura about it, if “Dr. Strangelove” were about fiscal policy instead of nuclear Armageddon. Consider a comment by Mitch McConnell, the Senate minority leader, at a news conference last week.
“America must never default — we never have, and we never will,” he said. “The debt ceiling will be raised, as it always should be. But it will be raised by the Democrats.”
In other words, the Republicans are openly abdicating their responsibility to govern in order to win political points. (A recent Morning Consult/Politico poll found that in the case of a default, 33 percent of voters would blame Democrats, 42 percent would blame both parties and only 16 percent would blame Republicans.) Unlike in the past, there’s no real principle involved, not even a fig leaf about fighting the deficit or pulling in rampant spending. It’s pure politics, with both parties eyeing the midterms and trying to maneuver the other side into taking a hit.
The Democrats’ latest attempt to draw in the Republicans came Monday, when the Senate took up a bill to continue funding the government — an absolute necessity by Sept. 30 — with a temporary increase in the debt ceiling, along with disaster-relief assistance and funding for refugee resettlement. But since it’s a conventional piece of legislation, the Republicans blocked it with the threat of a filibuster.
That leaves the Democrats with few options but to use the budget reconciliation process to lift the ceiling, adding to the party’s long to-do list in the coming days. It’s time consuming, but absent a colossal mistake by congressional leaders, it will happen, just as Mr. McConnell promised.
If that’s the case, what’s the big deal? Republicans say they’ll use the vote to attack Democrats during the midterms, but it’s hard to imagine making it stick, especially since the vote is about paying existing obligations, not creating new ones with more spending. There’s a good chance that a year from now, no one will be talking about it.
There are, however, two disturbing takeaways from this semiannual dance with default. The first is, obviously, that this is no way to run a country. Some will defend the debt ceiling as a check on spending, but while that was the original goal, it doesn’t work — otherwise, we wouldn’t have to raise it every few years. And there are much, much better ways to check spending than to intentionally career wildly toward the edge of a cliff, only to brake at the last possible second.
But there’s something else about the current debt-limit fight that bodes ill for the future. Much of the scare-quote commentary about the possibility of default assumes that it would come about as a result of a miscalculation. But what if it’s intentional? What if one party comes to believe that forcing a default would sink the other, politically, and decides to prioritize its short-term political fortunes over the country’s long-term economic health?
If that sounds insane, think about how quickly we got used to the Republicans shutting down the federal government for weeks to win some fleeting political concession. The fact that the shutdowns did significant damage to the country, and to the public’s faith in their leaders, hasn’t stopped elected officials from doing it again and again.
And in a world where significant parts of both parties believe that having the other in the majority is tantamount to a communist (or fascist) coup, it’s not hard to imagine one party deciding to sabotage the other by pushing the country into default. After all, during the debt-ceiling fight in 2013 several congressional Republicans said that a default actually wouldn’t be that bad, and would be worth it to stop Mr. Obama’s legislative priorities.
Then again, maybe that’s all just another unlikely nightmare scenario. But after watching too many nightmares come to life over the last few years, who’s to say?
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