With the 2011 budget deal done, the GOP is already looking ahead to the next two major fiscal battles: raising the debt ceiling, and implementing the 2012 budget.
In both cases, John Boehner and the Republicans have learned from their successful tactics during the tax extension fight, in which unemployment benefits for the 99ers and the START treaty were taken hostage in exchange for extending tax cuts for the wealthiest Americans, and the most recent budget deal, in which the GOP held a gun to the head of Planned Parenthood in exchange for nearly $100 billion in cuts. Boehner has already telegraphed that he intends to take even more hostages in exchange for raising the debt ceiling in a few months.
"The president says, 'I want you to send me a clean bill,'" Boehner said. "Well, guess what, Mr. President, not a chance you're going to get a clean bill. And I can just tell you this. There will not be an increase in the debt limit without something really, really big attached to it."And why not take more and more hostages until they get nearly everything they want? As Jon Chait explains:
What's remarkable is how quickly everybody in Washington has come to accept the premise that Republicans should be able to use a debt limit vote to extract significant policy changes. This sort of thing is completely unprecedented. Congress has been voting to raise the debt ceiling for years. The minority party typically uses the vote to embarrass the majority. They have never previously considered using such a vote to win substantive concessions.Word is that the Republicans will start with the radical Ryan budget as their first negotiating plank, and "compromise" from there. True to form for Middle Man, President Obama's response is to begin by pre-compromising, already laying out cuts to social security, Medicare and Medicaid as the Democratic first offering.
So why is this happening now? I think it's pretty clear that the Obama administration's approach to hostage-taking is to blame. Last December, Republicans expressed their willingness to let something they at least claimed not to want happen -- expiration of the Bush tax cuts on income under $250,000 -- unless they received additional concessions. Obama shrugged and said, "the hostage was the American people and I was not willing to see them get harmed."
When it came to approving the budget resolution, the same situation occurred. John Boehner's official position was that a government shutdown would be bad. But he'd do it if he didn't get some concessions. Obama paid up once more.
Why wouldn't Republicans try it again? And again, and again, and again? It's normal in politics to hold your opponent's priorities hostage -- I'll oppose your nominee unless you give me this bill. But when you can hold mutually-held priorities hostage, then you have almost unlimited power.
Leaving aside the wisdom of that pre-compromise negotiating tactic, however, there's something about the upcoming battle over the debt ceiling that neither President Obama nor John Boehner appear to appreciate at this point: raising the debt ceiling is actually a different fight from the budget battle. When the government lacks a budget, all but the most essential services immediately shut down. Not so with a failure to raise the debt ceiling. When government expenditures exceed the debt ceiling, the President has the leeway to determine which expenditures get cut.
Because of this, the best strategy on the debt ceiling is actually to shoot the hostage. As Matt Yglesias brilliantly explains:
It’s a two pronged strategy. The first one is a credible, repeated commitment not to surrender anything in exchange for getting congress to agree to the debt ceiling being increased. After all, why should anything be given up. Everyone knows that increasing the debt ceiling is the right thing to do....Head over to Yglesias' page at Think Progress and read the whole thing.
The second prong, important for credibility, is to move to thinking about what happens as we reach the ceiling.
This isn’t a sudden “shutdown.” Nor is is true that we have to default on obligations to our bondholders. Rather, it means that government outlays are now limited by the quantity of inbound tax revenue. But for a while, the people administering the federal government (to wit Barack Obama and Timothy Geithner) will be able to selectively stiff people. So the right strategy is to start stiffing people Republicans care about. When bills to defense contractors come due, don’t pay them. Explain they’ll get 100 percent of what they’re owed when the debt ceiling is raised. Don’t make some farm payments. Stop sending Medicare reimbursements. Make the doctors & hospitals, the farmers and defense contractors, and the currently elderly bear the inconvenient for a few weeks of uncertain payment schedules. And explain to the American people that the circle of people who need to be inconvenienced will necessarily grow week after week until congress gives in. Remind people that the concessions the right is after mean the permanent abolition of Medicare, followed by higher taxes on the middle to finance additional tax cuts for the rich.
Does anyone doubt that if the GOP were in a similar position, they would hesitate to do the same thing? No, they would not. In this instance, all the power lies in the hands of the Executive branch. By refusing to raise the debt ceiling, Republicans would be handing Barack Obama free reign to make budgetary choices, and a crystal-clear opportunity to demonstrate not only the value of government, but to squeeze his opposition financially and demonstrate to them just how much they, too, depend on the full faith and credit of the United States.
Of course, it is unlikely that this President will actually take that step. But unlike in the budget battles where hostage-taking leads to very difficult choices, we can certainly exhort Barack Obama and Harry Reid not to give any ground on this one. In this battle, we hold all the cards and all the leverage. It's time we used it.