Republicans and Debt: Blackmailers Without a Cause
Stop me if you’ve heard this before: Two years after a Democratic president took office and pushed ambitious policies through Congress, Republicans have regained control of the House. They don’t have the votes required to repeal the president’s achievements, but a quirk of U.S. law — which requires that Congress vote a second time to authorize the borrowing that results from already enacted spending and tax legislation — seems to give them an opportunity to engage in blackmail, threatening to create a financial crisis unless their demands are met.
Actually, however, you haven’t heard this before. True, there are some parallels with the debt ceiling crisis of 2011. But there are also huge differences. Elite opinion has changed — the debt obsession that gripped Very Serious People in the media and beyond a dozen years ago has vanished. Democrats also seem made of sterner stuff, much more determined to resist extortion.
But the most important difference is that this time Republicans aren’t making coherent demands. It’s completely unclear what, if anything, they want in exchange for not blowing up the economy. At this point they’re blackmailers without a cause.
Some of the reporting I’ve seen on the debt standoff describes Republicans as unable to agree on which spending should be cut. This might give the impression that there are factions within the G.O.P. that have different priorities. But as far as I can tell, no influential players within the party are advocating anything that might make a significant dent in the budget deficit, let alone achieve the balanced budget Kevin McCarthy promised as part of the deal that made him speaker.
As always, the fundamental fact about the budget is that the federal government is basically an insurance company with an army. Social Security, Medicare, Medicaid and the military dominate spending, and it’s impossible to do much about deficits unless you either raise taxes — which is obviously not part of the G.O.P. playbook — or make major cuts to these programs.
In the past, Republicans did try to change safety net programs in ways that would in effect have amounted to major cuts. George W. Bush tried to privatize Social Security. Republicans almost made a deal with President Barack Obama that would have reduced Social Security cost of living adjustments and raised the age of Medicare eligibility. In 2017 Paul Ryan, speaker of the House at the time, declared that he had been “dreaming” of cutting Medicaid since his college days.
But the G.O.P., perhaps remembering the political backlash after Donald Trump tried to dismantle Obamacare, has since become much more cautious. McCarthy has already declared that cuts to Social Security and Medicare are “off the table”; if his party ever gets around to making specific proposals, it will find out that Medicaid, which covers even more Americans than Medicare, is also extremely popular, even among Republicans.
Nor is political caution the only reason Republican leaders have become reluctant to attack the safety net. The G.O.P. base has also lost interest in spending cuts, turning its attention to culture wars. As my colleague Nate Cohn recently noted, in early 2021 far more Republicans reported having heard about a decision to stop publishing some of the Dr. Seuss books than about President Biden’s $1.9 trillion spending bill.
Inevitably, some Republicans are trying to make the budget a culture-war issue, claiming that large sums can be saved by eliminating “woke” spending. But what spending are they talking about?
I’ve been trying to find specific examples of federal outlays that conservatives consider woke, bearing in mind that right-wing think tanks and politicians have a strong incentive to find big-ticket items that sound outrageous. The results of my search were, well, embarrassing. For example, the spending listed in a Heritage Foundation report thundering against “woke earmarks” totaled about $19 million — less than the federal government spends every two minutes.
So the bottom line on the debt crisis is that there is no bottom line: Republicans denounce excess spending, but can’t say what spending they want to cut. Even if Democrats were inclined to give in to extortion, which they aren’t, you can’t pay off a blackmailer who won’t make specific demands.
Unfortunately, the emptiness of Republican fiscal posturing is no guarantee that we’ll avoid a debt crisis. If anything, it may make a crisis more likely. MAGA may lack policy ideas, but it’s rich in nihilism; Republicans don’t know what policies they want, but they definitely want to see Biden fail.
So far, the Biden administration’s strategy seems to be to flush Republicans out of hiding, force them to propose specific spending cuts, then watch them retreat in the face of an intense public backlash. There are also, I presume and hope, contingency plans to avoid crisis if this strategy fails.
But it’s hard not to be worried. It’s dangerous when a political party is willing to burn things down unless it gets its way; it’s even more dangerous when that party just wants to watch things burn.
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