My Take on the Debt Limit Debacle

When I started this blog, I imagined I’d split its posts about evenly among history, art, and politics. Then–gloriously–I found a regular freelance gig that pays me to write about art. Perhaps unsurprisingly, then, art has pretty thoroughly dominated the blog in its first three months. But I love history and have lots of reasonably well-researched opinions about politics, and I’m going to try to start writing about these things more. I mention this not because I think there’s much demand for my thoughts on these topics, but in order to explain what will hopefully be a movement in the direction of more balance in content.

Ah, “balance.” It is, in fact, the word that brought me to finally post something about politics–US politics, in fact–after a long hiatus. If you’ve been following the insanity surrounding the vote to raise the debt ceiling (as I have been, obsessively), you’ve been hearing a lot from Obama and the GOP about what a “balanced” agreement to reduce the deficit and raise the debt limit would look like. Unsuprisingly, they have some very different ideas.

(In case you haven’t been paying attention to this particular crisis, here’s where things stand in three (long) sentences: One crazy feature of US law is that it not only empowers Congress to determine all expenditures, but it also imposes a cap on the total amount of debt the government can hold, a cap that can only be raised with the support of a majority of the House and 60% of the Senate. If it’s not raised by August 2nd, the US won’t have enough money to meet all of its financial obligations; in other words, the federal government will default on its debt, forcing a government shutdown and likely throwing international bond markets into a 2008-style panic. About half of Republicans in the House say they won’t vote to raise the debt limit at all, and nearly all of the rest will only do so if Obama meets all of their demands–namely, multiple trillions of dollars in cuts to spending over the next 10 years, and no new revenues whatsoever.)

Returning to the idea of balance: Obama–like virtually every serious policy expert, including Republican ones–believes that our debt problems can only be solved without ending the social safety net as we know it if Congress adopts an approach that balances spending cuts with new revenues. Republicans say, almost insultingly, that a “balanced approach” means Obama cuts spending and they vote to raise the debt ceiling.

What does the public think? In fact, a Gallup Poll released yesterday offers a remarkably succinct answer. The poll asked voters to chose whether they’d prefer that the deficit be reduced by just spending cuts, mostly spending cuts, a balance of cuts and new taxes, mostly new taxes, or all new taxes. Here are the results:

The GOP’s insistence on no new taxes, in other words, represents the position of one-firth of the US electorate. Even more striking is that while many commentators have expressed the opinion that the GOP’s position on the debt ceiling reflects the sentiments of the “new” Republican voter, this poll reveals that it’s actually hugely to the right of most Republicans, only 26% of whom said they favored deficit reduction through cuts alone.

Nate Silver’s analysis at FiveThirtyEight underscores just how remarkable this poll’s results are. By way of some pretty reasonable mathematical approximations, he concludes that the average GOP voter wants a 1:3 ratio of tax increases to spending cuts–substantially more than what Obama has proposed (between 1:4 and 1:6, depending on the size of the deal). In other words, not just the average US voter, but also the average *Republican* voter, stands to the left of Obama on this issue. Yet the Republicans won’t move an inch from their far-from-mainstream position.

Republicans and Democrats have been intensively negotiating a debt agreement for the past few months, but If I had to guess, I’d say these negotiations aren’t headed toward any sort of deficit-reducing compromise at all. It looks like the Republicans have decided that any negotiated agreement short of one which accepts literally all of their demands will represent a net boon for Obama (and his reelection chances) and a net loss for them because it will allow Obama to position himself as a bipartisan deficit-cutter and thereby deprive Republicans of two of their most potent arguments against a president they’ve long decried as partisan and profligate. And Obama won’t agree to every single item on the Republican wish list; that’s not how US politics has ever worked, and anyway, Obama’s already taken a position substantially to the right of most Republican–let alone independent or Democratic–voters. If he were to cut Medicare and Pell Grants for low-income college students without securing even a bit of new revenue in return, he’d lose a huge amount of electoral momentum. (And his pelotas, as they say here.)  There’s a distant chance that Obama could agree to something revenue-neutral by trading some additional taxes for an extension of the stimulative payroll tax cut, which he wants anyway. But with Republicans saying that every loophole is sacred, it seems highly unlikely they’ll agree.

So are we headed for default, then? I don’t think so. Obama’s winning the “balance” debate dramatically right now, something that Republicans would have to have noticed given the results of yesterday’s poll. This means that the GOP is likely to take a lot of the political heat in the case of default (though, of course, there’d be plenty to go around). So I predict that the GOP’s going to go with the crazy parliamentary maneuver that Senate Minority Leader Mitch McConnell devised. It’d basically give Obama the authority to raise the debt limit without cutting spending, assuming he has the support of at least a third of Congress (something that’s all but assured). The thought is to force Obama to take all of the political heat for raising the debt ceiling (itself an unpopular action). In other words, Republicans will surrender their procedural leverage to force massive spending cuts in exchange for shifting all of the responsibility to Obama. Even this is far from guaranteed to pass the Republican House, but if the House leadership is sane enough to do all they can to avoid default, I think it’ll happen.

While this option means that Republicans are essentially raising the white flag on the debt limit, it also says terrifying things about the current state of US politics. One of our two major political parties is currently answering to an extreme minority, perhaps unprecedentedly so. And they seem to care much less about actual deficit reduction–or responsible leadership–than about protecting the Tea Party’s sacred cows. As someone who thinks a lot about institutions, I’d say ours aren’t looking so hot right now.

One thought on “My Take on the Debt Limit Debacle

  1. This was a great synopsis of our predicament. It would be great if you could have your opinion published in the U.S., since the facts don’t lie & more people should be made aware of what’s happening.

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