It was, in the end, the showdown that wasn’t: After months of saber-rattling and stern ultimatums, Senate Minority Leader Mitch McConnell (Ky.) and fellow Senate Republicans paved the way for President Biden and congressional Democrats to raise the federal debt limit as soon as Tuesday.
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But many Republicans are warning that next time will be different.
Conservative lawmakers, anticipating the GOP retaking one or both congressional majorities in next year’s midterm elections, are already calling for and strategizing around a fiscal clash in 2023, insisting on using the threat of federal default to place new curbs on government spending and reduce the $28 trillion national debt.
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What they are envisioning is, at a minimum, a return to the brinkmanship seen the last time a Democratic president confronted a new Republican majority, in 2011. It already threatens to become the dominant domestic political clash ahead of the 2024 presidential election.
The debt ceiling fight, explained
Ten years ago, a new House GOP majority took the largely unprecedented step of holding America’s creditworthiness hostage to force President Barack Obama to accept major fiscal concessions. The result was the Budget Control Act of 2011, which contemplated more than $900 billion in cuts to discretionary federal spending — caps that held for two years, then were overridden by subsequent Congresses.
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Key Republicans said that, at the very least, they are looking to reimpose some regime of spending cuts.
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“There needs to be at least some kind of negotiation in a bipartisan way for spending restraints,” said Rep. Jason T. Smith (Mo.), the top Republican on the House Budget Committee. “The American people are tired of $7 trillion being spent in one year. There has to be spending cuts.”
Should he be handed a gavel in 2023, Smith vowed to “look at all options” to force such an outcome.
Meanwhile, GOP hard-liners — including members of the House Freedom Caucus, a group loyal to former president Donald Trump that has a history of pushing party leaders into high-stakes confrontations with Democrats — are vowing to provoke a reckoning over federal spending using every tactic at their disposal.
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“You have to use the tools you have to force change in this town,” said Rep. Chip Roy (R-Tex.). “That’s not going to go away until people get their head out of their [hindquarters] and actually focus on spending money that we have and not printing money. .？.？. Then we can end brinkmanship. If you’re going to keep spending money like drunken sailors, we’re going to keep fighting.”
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This time around, Republican leverage has been limited. Democrats hold majorities in both the House and the Senate, and while Republicans could have used the Senate’s filibuster rules to block a debt ceiling increase, party leaders never seriously entertained using that tool to force spending concessions.
Graham criticizes McConnell over debt ceiling, says GOP leaders must work with Trump
Instead, McConnell and other leaders focused on making sure that it was Democrats, not Republicans, who would bear the political cost of raising the debt limit ahead of the midterms. In August, all but a handful of GOP senators signed a letter demanding that Democrats use a special budget process to raise the debt limit by a specified number with only Democratic votes. The idea was that the large number would give voters sticker shock and could be used against Democrats during the upcoming campaigns, even though much of the debt in question was tallied while Trump was president.
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In the end, McConnell and his allies dropped the process demand but ensured that Democrats would vote on a specific number rather than simply suspending the debt limit to a future date, as Congress has tended to do in recent years.
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Sitting on the sidelines, Trump encouraged a harder line and repeatedly criticized McConnell this month for not using the debt vote to force Democrats to abandon their domestic policy agenda.
In a statement Sunday — one of several the former president issued on the same theme — he said that the Senate GOP leader “didn’t have the guts to play the Debt Ceiling card, which would have given the Republicans a complete victory on virtually everything.”
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Republicans are broadly confident that they will be in a better position to bargain come 2023, when they believe they will have a House majority and perhaps a Senate majority, too. Biden’s dismal approval ratings, generic-ballot congressional polling, advantageous redistricting maps, a spate of Democratic retirements and the historical head winds faced by the president’s party are all pointing to significant GOP gains in the midterms.
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Meanwhile, many Republicans believe that their party is primed to make budgetary issues a centerpiece of their assault on Biden and congressional Democrats in the coming years — even after playing a key role in adding to yearly budget deficits under Trump. Congressional scorekeepers estimated that the GOP’s 2017 tax cuts added nearly $2 trillion in deficits, while bipartisan coronavirus relief packages represented an additional $7 trillion or so in borrowing.
That record has not stopped Republicans from slamming Democrats for profligacy in recent months, blaming Biden’s $1.9 trillion American Rescue Plan for the nation’s spiraling inflation and warning that the follow-on legislation, known as Build Back Better, could only exacerbate the problem despite Democrats’ vows that the package would be offset with tax increases and budget savings.
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While many Republicans are careful to keep their broadsides focused on higher inflation, many others are happy to return to decade-old talking points about a runaway national debt and calamitous long-term consequences for the nation.
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“I would hope that what we would want is [what] the debt ceiling was designed to do, and that’s actually change the trajectory of where we are with debt and deficit,” said Sen. James Lankford (R-Okla.), who was among the historic class of House conservatives elected in 2010 that prompted the showdown a decade ago. “If we’re not going to even discuss the trajectory of all this additional spending and additional debt piling up, why do we have it?”
Economists increasingly say it’s acceptable for the U.S. to take on more debt — for the right reasons
The conversation about a future fiscal confrontation is complicated by the last one: Republicans hoped that the 2011 showdown would force a long-term readjustment of the federal fiscal outlook, encompassing trims to both the discretionary spending that Congress routinely appropriates and the more-expensive entitlement programs such as Medicare and Medicaid that largely grow on autopilot.
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The Budget Control Act created a “supercommittee” to hash out a grand bipartisan agreement, using the threat of drastic across-the-board spending cuts to force a deal. But months of negotiations ended in stalemate, with Republicans holding firm against tax hikes and Democrats holding the line against benefit cuts.
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So entitlement programs remained untouched, and rather than allowing the discretionary spending cuts to take effect — distributed evenly between military and domestic spending to maximize political pain — Congress voted to reset the caps every two years until the BCA expired this year.
That has prompted some conservatives to resolve not to go down the same path and instead try to find a different way to curb federal spending over the long term.
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Cesar Ybarra, senior director of legislative affairs for FreedomWorks, a conservative advocacy group that has helped rally grass-roots support for hard-edge legislative tactics, called the Budget Control Act a “total disaster” in hindsight.
“They cheated their way through the budget caps. So was it a success? Probably not,” he said. “Republicans cannot try to push policies that they’ve already failed on. Let’s try something new.”
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Some Republicans, such as Sen. Rand Paul (Ky.) and multiple Freedom Caucus members, said in interviews that they favored an approach pushed by conservatives in 2011 — “cut, cap and balance.” That would involve not only immediate cuts to federal spending but also caps on future spending, to no more than 20 percent of yearly gross domestic product, as well as a new constitutional amendment enshrining that spending cap, requiring a balanced yearly budget and imposing a two-thirds supermajority requirement for future tax increases.
Such an approach would require drastic cuts to federal programs — probably including Medicare and other entitlements — and it had virtually no Democratic support in 2011. It is even more unlikely to win any Democratic support now.
While Obama, as president, acknowledged the national debt as a major problem and engaged in serious negotiations with Republicans, led by then-House Speaker John A. Boehner (Ohio), it is unclear whether party leaders come 2023 would entertain a similar dialogue.
Obama’s evolution: Behind the failed ‘grand bargain’ on the debt
Biden played a key role in the 2011 clash, serving as the White House’s key emissary to Capitol Hill and negotiating a final deal with McConnell, his longtime former colleague in the Senate. During this year’s debt drama, he maintained a relatively hands-off posture, encouraging Republicans to come to terms on a deal without directly engaging in negotiations.
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He may not have that luxury after the midterms, with even more sober-minded Republicans preparing to win significant fiscal concessions. A prelude to the potential showdown came in 2018, when Congress set up a special committee to study possible reforms to the budget and appropriations process.
Republicans and Democrats alike hoped that panel might offer solutions to a dysfunctional cycle of deadline-driven negotiation and brinkmanship. But the two parties ultimately found little to agree on except the desire to move from a one-year to two-year budget cycle and some other marginal process changes.
Rep. Steve Womack (R-Ark.), a co-chairman of that committee and a former Budget Committee chairman, said the panel’s fizzle has Republicans thinking about the next debt ceiling clash as a chance to force “a real conversation” about fiscal issues that simply hasn’t been able to happen under other circumstances.
Rather than just setting caps, he said, Republicans need to look at forcing more durable changes to how Washington spends money, structured in a way that keeps future Congresses from backsliding.
“There have to be real, enforceable features of whatever law that we passed that will force Congress to have to do its job or suffer real consequence — I mean, painful consequences,” Womack said. “If you don’t have those, then you’ll always find Congress doing an end around on what the law or at least the spirit of the law is.”