Debt Limit Vote: You Ain’t Seen Nothing Yet
Forget the fights over health care reform, the extension of the Bush tax cuts and any other controversy previously billed by the media as The Big One. The vote on raising the debt limit is so politically significant that any other Capitol Hill fight we have witnessed of late pales in comparison.
I don’t know how the vote to raise the debt limit will eventually turn out, but I am willing to make one of the very few “predictions” I ever offer: The issue won’t be resolved in the next eight weeks.
Both parties will have to hold out until the end of July before taking a deal — if they do take one before the early August deadline — since neither party’s Congressional leadership can afford to compromise prematurely.
The Republican House leadership, and particularly Speaker John Boehner (Ohio), can’t accept an early deal without giving ammunition to tea party activists and the Speaker’s most conservative colleagues, including Minnesota Rep. Michele Bachmann, to blast him for not getting the absolute best deal possible.
The same dynamic holds for Congressional Democrats. House Minority Leader Nancy Pelosi (Calif.) probably won’t ever accept a deal with House Republicans, but Congressional Democrats and the White House have to prove to the party’s rank and file that they aren’t letting Boehner call the shots, particularly since many on the party’s left believe that President Barack Obama caved prematurely to Republicans in December on the extension of the Bush tax cuts.
So both parties have a strong incentive to hold out until the last possible minute, if only to prove their toughness and commitment to their positions.
But that doesn’t answer the question of which party is at greater risk or which has the political advantage in the negotiations that will take place in the next 10 weeks.
When I began thinking about this column, I started with a working hypothesis that Republicans were at far greater risk because they were vulnerable to the narrative that their party is a prisoner to the tea party and unwilling to compromise.
I also assumed that Democrats, having acceded to Republican demands on tax cuts, would hold their ground on the debt limit, leading to either the doomsday scenario or forcing Republicans to give ground rather than be tagged with responsibility for the world’s reaction to a possible U.S. default.
After talking with party strategists on both sides of the aisle, I have concluded that my initial working assumption probably was wrong.
Savvy insiders from both sides of the aisle agree that both parties are at considerable risk during the debt limit process, with Democrats quite possibly in a weaker position even though they control the Senate and White House.
The nature of the Republican risk is obvious. If the GOP looks inflexible, excessively ideological and extreme, voters are likely to turn against it. This is more likely, of course, if Democrats look reasonable and emphasize their willingness to compromise. (Swing voters love the idea of compromise.) It’s also more likely if the most vocal and ideological elements of the GOP define their party.
But even partisan Democrats agree that their party faces a considerable risk if they look as if they are insufficiently committed to cutting spending. Indeed, merely by supporting an increase in the debt limit, Democrats play into an image that they are trying to change — that they are fiscally irresponsible.
This is why, some observers speculate, that if a “clean” vote on increasing the debt limit occurs soon (as some predict), large numbers of Democrats will vote against it. That would give ammunition to House Republicans, of course.
Observers also agree that Democrats could well have more to lose if Congress can’t pass an increase in the debt limit before U.S. government borrowing hits the existing ceiling.
Even if Republican opposition to increasing the debt limit provokes an economic or financial crisis, Obama could well take the brunt of the political damage from voters simply because he is sitting in the Oval Office and looked powerless.
While Democrats surely would attempt to blame the GOP for a spike in interest rates due to a loss of confidence in the U.S. government’s reliability, it is far from clear that the president would avoid serious damage if the U.S. economy were to suffer from any chaos produced by the government reneging on its obligations.
Presidents, after all, sometimes take the blame for events out of their control, and even Democratic strategists worry that they cannot be sure that a deadlock on increasing the debt ceiling due to Republican intransigence wouldn’t hurt Democrats more than Republicans.
Of course, if Democrats are in an awkward situation on raising the debt limit, so is Boehner, who is both trying to lead his party and follow it at the same time.
Still, the only group of players that doesn’t appreciate the potential negative fallout from a deadlock is House Republicans, many of whom seem to think that failing to raise the debt limit wouldn’t be all that big of a deal. That view may well be delusional, but it gives them a great deal of power in any negotiations, since they don’t feel the pressure to act that others do.
Democrats, of course, will say that this is akin to the inmates running the asylum, while Republicans will respond that Democrats created the problem of bigger government and more spending.
If you think I’m certain of the outcome, you are wrong. But smart insiders believe that there is plenty of political risk to go around, and I expect we’ll see many weeks of political shadowboxing by Congressional Republicans, Congressional Democrats and the White House before the second half of July approaches. Only then will a deal be possible.
Stuart Rothenberg is editor of the Rothenberg Political Report.