Congress Must Stop Using Default as a Weapon

In this hostage crisis, a concession by Obama tied to the debt ceiling or CR would ensure that presidents would become regular instruments of extortion.

Sen. Ted Cruz (R-TX), listens to testimony during a Senate Judiciary Committee hearing on April 22, 2013.
National Journal
Norm Ornstein
Oct. 9, 2013, 2:43 p.m.

How do we get out of this mess? We know it won’t be easy, and we know that there is a tan­gible chance that we will de­fault. As a top House Re­pub­lic­an staffer told Na­tion­al Re­view’s Robert Costa the oth­er day, “It’s the House of in­de­cision. We don’t have the votes for a big deal, small deal, or short-term deal.” I will get to one pos­sible way out, but first I need to vent. To be­gin, this is en­tirely an en­gin­eered crisis per­pet­rated by House Re­pub­lic­ans with Sen­ate al­lies, hatched, as we now know, by out­side in­di­vidu­als and groups in­clud­ing Ed Meese, Her­it­age Ac­tion, and the Koch broth­ers. We know that John Boehner really did not want a shut­down, and that he had agreed to a clean con­tinu­ing res­ol­u­tion after Sen­ate Demo­crats ca­pit­u­lated in en­tirety to his party’s de­mands on ap­pro­pri­ations — mean­ing a con­tinu­ation of the se­quester and the much lower over­all spend­ing num­bers of the Ry­an budget (in­clud­ing high­er spend­ing for de­fense.)

But Ted Cruz and Boehner’s own rad­ic­al House fac­tion pushed the speak­er to renege on that deal and in­stead de­mand the de­fund­ing of Obama­care as a con­di­tion for keep­ing the gov­ern­ment open. Boehner did not ask that some por­tions of the gov­ern­ment — in­clud­ing the World War II Me­mori­al, death be­ne­fits for fam­il­ies of ser­vice­men and wo­men, NIH can­cer tri­als — be kept open. He and his al­lies made clear that his de­mands ap­plied to all gov­ern­ment covered by ap­pro­pri­ations. Try­ing to wriggle out of this un­ten­able situ­ation, Boehner tried to mol­li­fy his rad­ic­als by sug­gest­ing in­stead that their de­mands be tied to the debt ceil­ing — and we ended up with the worst of both worlds.

I have had some sym­pathy for Boehner, who is be­ing buf­feted by forces in his party bey­ond his con­trol, with any at­tempt at lead­er­ship thwarted by a lack of fol­low­er­ship. But my sym­pathy for him dis­ap­peared after his ut­terly disin­genu­ous press con­fer­ence Tues­day. The speak­er talked about how all he wanted was to have a con­ver­sa­tion and ne­go­ti­ation over spend­ing is­sues, and that the fail­ure to do so was un-Amer­ic­an — this from the same speak­er who, since the Sen­ate ad­op­ted a budget sev­er­al months ago, has stead­fastly re­fused to ap­point con­fer­ees to ne­go­ti­ate over the budget, after years of in­sist­ing that was all he wanted. The speak­er sug­ges­ted in his press con­fer­ence that a clean CR, as pro­posed by Pres­id­ent Obama, would mean total ca­pit­u­la­tion by Re­pub­lic­ans — ca­pit­u­la­tion to the num­bers he de­man­ded!

Boehner also sug­ges­ted that threats over the debt ceil­ing were routine. False. Be­fore 2011, as Tom Mann and I point out in It’s Even Worse Than It Looks, the use of the debt ceil­ing as a polit­ic­al tool was lim­ited to nar­row is­sues dir­ectly re­lated to budget pri­or­it­ies. The rank and reg­u­lar hy­po­crisy sur­round­ing votes on the debt ceil­ing — en­gaged in by Sen. Barack Obama — by which a pres­id­ent’s par­tis­ans de­fen­ded the need to pro­tect the full faith and cred­it of the U.S., and his ad­versar­ies talked about the need for fisc­al dis­cip­line (be­fore re­vers­ing roles when the oth­er party took over the White House), was seen by all as a kind of game. Nobody in a po­s­i­tion of in­flu­ence truly wanted a de­fault, and party lead­ers al­ways kept some votes in re­serve in case the threat be­came real.

The idea of threat­en­ing de­fault in a real way — de­mand­ing out­land­ish con­ces­sions with a loaded gun to the coun­try’s head — only emerged in 2011. We es­caped de­fault when Mitch Mc­Con­nell swooped in at the last minute to craft a deal — but the fu­ture be­came clear soon there­after when a can­did Mc­Con­nell told The Wash­ing­ton Post about the fu­ture of the debt ceil­ing, “What we did learn is this: It’s a host­age that’s worth ransom­ing.” This year the host­age drama is more fright­en­ing. Mc­Con­nell is AWOL this time. And the fantasy be­lieved by many prom­in­ent GOP­ers about the con­sequences of de­fault make it easi­er for them to push to the brink and over in­to the abyss. It may have come as no sur­prise when Rep. Ted Yoho, a veter­in­ari­an, said that a de­fault would be great be­cause “it would bring sta­bil­ity to the world mar­kets.” But when Tom Coburn, who should know bet­ter, says that there is no debt ceil­ing and that if we fail to raise the debt ceil­ing “we’ll con­tin­ue to pay our in­terest, we’ll con­tin­ue to re­deem bonds, and we’ll is­sue new bonds to re­place those,” it tells us that there are way too many law­makers in a bubble of un­real­ity. In con­trast, there’s this from Bloomberg News: “Among the dozens of money man­agers, eco­nom­ists, bankers, traders, and former gov­ern­ment of­fi­cials in­ter­viewed for this story, few view a U.S. de­fault as any­thing but a fin­an­cial apo­ca­lypse.”

Enough vent­ing. The bot­tom line here is that we need some kind of agree­ment that will re­open the gov­ern­ment and stop a down­ward spir­al that uses de­fault as a genu­ine and fright­en­ing polit­ic­al weapon. Real­ist­ic­ally, qua Ne­go­ti­ation 101, it must provide the pres­id­ent, the speak­er, and the Sen­ate ma­jor­ity lead­er with the abil­ity to de­clare vic­tory or at least to avoid the per­cep­tion of ut­ter de­feat. The two houses, two parties, and the pres­id­ent will still have to deal with one an­oth­er on a myri­ad of is­sues for the next 40 months.

Ne­go­ti­ation now re­quires a cool­ing-off peri­od — a clean ex­ten­sion of the debt ceil­ing, and a tem­por­ary CR. Then a re­open­ing of the gov­ern­ment for the year, with the un­der­stand­ing that a new com­mis­sion will be es­tab­lished to dis­cuss big long-term debt is­sues, is feas­ible.

But any con­ces­sion by the pres­id­ent that is tied to a short-term CR or a short-term ex­ten­sion of the debt ceil­ing would be dis­astrous. Ba­sic func­tions of gov­ern­ment and the full faith and cred­it of the U.S. would be­come reg­u­lar in­stru­ments of ex­tor­tion in the fu­ture, res­ult­ing in peri­od­ic dis­plays of Amer­ic­an dys­func­tion and in­com­pet­ence to the world, with ser­i­ous eco­nom­ic con­sequences. But a con­ces­sion on a dif­fer­ent agenda — to take the debt ceil­ing per­man­ently off the table as a host­age — is well worth it. What Obama needs to of­fer now is a pro­pos­al to make per­man­ent 2011’s one­time “Mc­Con­nell Rule.” Un­der that pro­ced­ure, de­vised by the minor­ity lead­er, the pres­id­ent could uni­lat­er­ally raise the debt lim­it and Con­gress could have the op­tion of block­ing it by way of a res­ol­u­tion of dis­ap­prov­al. The pres­id­ent, in turn, could veto the res­ol­u­tion of dis­ap­prov­al; a vote of two-thirds of both houses would be re­quired to over­ride the veto.

In re­turn for that ac­tion, if the pres­id­ent agreed to re­move the tax on med­ic­al devices (and re­place it with an­oth­er source of rev­en­ue to help fund Obama­care), or agreed to some ad­di­tion­al mal­prac­tice re­form — neither ac­tion hit­ting at any es­sen­tial core parts of the health care law — it would be a win-win. If, in ad­di­tion, Boehner simply ac­cep­ted yes for an an­swer on re­open­ing the gov­ern­ment, at­tain­ing the Ry­an budget num­bers, we could all move past this em­bar­rass­ing crisis. At that point, maybe we could craft a pro­cess that man­ages the budget pro­cess in a less de­struct­ive way.

What We're Following See More »
STAFF PICKS
These (Supposed) Iowa and NH Escorts Tell All
8 hours ago
NATIONAL JOURNAL AFTER DARK

Before we get to the specifics of this exposé about escorts working the Iowa and New Hampshire primary crowds, let’s get three things out of the way: 1.) It’s from Cosmopolitan; 2.) most of the women quoted use fake (if colorful) names; and 3.) again, it’s from Cosmopolitan. That said, here’s what we learned:

  • Business was booming: one escort who says she typically gets two inquiries a weekend got 15 requests in the pre-primary weekend.
  • Their primary season clientele is a bit older than normal—”40s through mid-60s, compared with mostly twentysomething regulars” and “they’ve clearly done this before.”
  • They seemed more nervous than other clients, because “the stakes are higher when you’re working for a possible future president” but “all practiced impeccable manners.”
  • One escort “typically enjoy[s] the company of Democrats more, just because I feel like our views line up a lot more.”
Source:
STATE VS. FEDERAL
Restoring Some Sanity to Encryption
8 hours ago
WHY WE CARE

No matter where you stand on mandating companies to include a backdoor in encryption technologies, it doesn’t make sense to allow that decision to be made on a state level. “The problem with state-level legislation of this nature is that it manages to be both wildly impractical and entirely unenforceable,” writes Brian Barrett at Wired. There is a solution to this problem. “California Congressman Ted Lieu has introduced the ‘Ensuring National Constitutional Rights for Your Private Telecommunications Act of 2016,’ which we’ll call ENCRYPT. It’s a short, straightforward bill with a simple aim: to preempt states from attempting to implement their own anti-encryption policies at a state level.”

Source:
STAFF PICKS
What the Current Crop of Candidates Could Learn from JFK
8 hours ago
WHY WE CARE

Much has been made of David Brooks’s recent New York Times column, in which confesses to missing already the civility and humanity of Barack Obama, compared to who might take his place. In NewYorker.com, Jeffrey Frank reminds us how critical such attributes are to foreign policy. “It’s hard to imagine Kennedy so casually referring to the leader of Russia as a gangster or a thug. For that matter, it’s hard to imagine any president comparing the Russian leader to Hitler [as] Hillary Clinton did at a private fund-raiser. … Kennedy, who always worried that miscalculation could lead to war, paid close attention to the language of diplomacy.”

Source:
STAFF PICKS
Hillary Is Running Against the Bill of 1992
8 hours ago
WHY WE CARE

The New Covenant. The Third Way. The Democratic Leadership Council style. Call it what you will, but whatever centrist triangulation Bill Clinton embraced in 1992, Hillary Clinton wants no part of it in 2016. Writing for Bloomberg, Sasha Issenberg and Margaret Talev explore how Hillary’s campaign has “diverged pointedly” from what made Bill so successful: “For Hillary to survive, Clintonism had to die.” Bill’s positions in 1992—from capital punishment to free trade—“represented a carefully calibrated diversion from the liberal orthodoxy of the previous decade.” But in New Hampshire, Hillary “worked to juggle nostalgia for past Clinton primary campaigns in the state with the fact that the Bill of 1992 or the Hillary of 2008 would likely be a marginal figure within today’s Democratic politics.”

Source:
STAFF PICKS
Trevor Noah Needs to Find His Voice. And Fast.
9 hours ago
WHY WE CARE

At first, “it was pleasant” to see Trevor Noah “smiling away and deeply dimpling in the Stewart seat, the seat that had lately grown gray hairs,” writes The Atlantic‘s James Parker in assessing the new host of the once-indispensable Daily Show. But where Jon Stewart was a heavyweight, Noah is “a very able lightweight, [who] needs time too. But he won’t get any. As a culture, we’re not about to nurture this talent, to give it room to grow. Our patience was exhausted long ago, by some other guy. We’re going to pass judgment and move on. There’s a reason Simon Cowell is so rich. Impress us today or get thee hence. So it comes to this: It’s now or never, Trevor.”

Source:
×