The GOP Gets Ready to Cause Another Debt Ceiling Crisis
Fresh off their third defeat in three consecutive election cycles, congressional Republicans appear ready for another Pickett’s Charge on entitlement programs. Defying the nostrum that there’s nothing learned from the second (or third) kick of a mule, House and Senate Republicans now seem fully on board with the idea of holding the federal budget—and possibly the economy and the nation’s credit rating—hostage in a futile effort to try to force major (and, it’s worth mentioning, needed) reforms to the nation’s health and Social Security programs. We’ve been here before, and it’s worth revisiting 1995, the year this gonzo strategy was debuted, for an illustration of just how bad the 2023 casualties could turn out to be.
The 1994 midterm elections, which installed the first Republican majority in both chambers since the Eisenhower administration, left the GOP rather high on its own supply, promising radical changes to the size and scope of the federal government. As historian Steven Gillon recorded, the rival party leaders of the era, Speaker of the House Newt Gingrich and President Bill Clinton, were dealing with the same basic political problem: Each wanted to secure a long-term budget deal that would cement his own reputation as a transformational leader, but each was constrained by colleagues and advisers demanding more maximalist positions.
From the left, senior White House advisers felt they had to prevent Clinton from agreeing to a deal that might seriously undermine Social Security and Medicare, the crown jewels of the New Deal and Great Society. On the right, Gingrich sat atop a fractious Republican conference bent on controlling government spending (especially entitlement programs) that threatened the nation’s long-term fiscal solvency. During negotiations, Majority Leader Dick Armey was tasked with keeping a volatile Gingrich on-side while Vice President Al Gore and White House staffers worked to restrain Clinton from giving away the store. George Stephanopoulos told Gillon of framing Gingrich as a mendacious, bad-faith actor before Clinton met with him, with the objective of preventing an agreement. “A failed meeting,” Stephanopoulos said, “[was] a successful meeting.” A potentially historic compromise glittered between the principals, but the hardliners on both sides prevented them from claiming it.
In the midst of these negotiations, Israeli prime minister Yitzhak Rabin was assassinated. Clinton, Gingrich, Senate Majority Leader Bob Dole and other Washington heavies flew together on Air Force One to attend Rabin’s funeral. Gingrich expected to spend those flight hours forging a budget agreement. Instead, Clinton aides kept the president busy with other work while Gingrich and Dole were left fuming in coach. Adding insult to inactivity, the Republican leaders were asked to disembark through the rear of the plane after landing at Andrews Air Force Base rather than walking out alongside the president through the main door. In a fit of pique, Gingrich vented his wounded feelings to the press, a tactical misstep that resulted in his public humiliation.
Angry at Clinton and harassed by his own right flank, Gingrich told the president that if he didn’t bend to his will and sign a Republican budget, he would “use my veto, which is shutting the government down,” by withholding appropriations. In a last-ditch effort to forestall a closure, Congress sent a short-term spending bill to the White House but made the mistake of including a provision that extended a small, soon-to-expire Medicare premium that beneficiaries had been paying for years. Clinton, who had demanded a clean continuing resolution, vetoed the bill alleging that it “cut” Medicare, shuttering the government for six days before tense negotiations led to a temporary reopening.
Republicans doubled down: The next budget they sent was full of perennial Republican demands, including reduced social spending coupled with tax cuts for the wealthy; Gingrich described it as signaling “a fundamental change in the direction of government.” The gambit did not pay off. Convinced that most Americans would support his side because they didn’t want the cuts to the welfare programs on which they depended, Clinton vetoed this bill as well, leading to a 21-day-shutdown beginning in mid-December.
At this point, unable to counter White House messaging or overcome their PR challenges, Gingrich and the House Republicans finally folded. In early January, they sent the president the clean CR he had demanded followed later by a compromise spending package; in the eyes of the public, they had surrendered to Clinton’s demands. This budget victory restored the president’s political strength and opened the way for his re-election over a Republican party now indelibly marked as anti-Medicare and anti-Social Security.
This history is remarkably resonant after this year’s midterm elections, although there is one notable difference between then and now: The GOP’s current position is dramatically weaker than it was in 1995. Due to its ongoing struggles among suburban voters concerned about threats to democracy and access to abortion, the party has slouched to an excruciatingly narrow House majority with a restive, conspiracy-minded, and supercharged populist flank. Against the odds, Democrats have retained the Senate—and a few blocks away, lest anyone forget, is a veto-wielding President Biden.
The issue set is also similar. In late November, Senate Minority Whip John Thune effectively endorsed House Speaker-in-waiting (and waiting, and waiting) Kevin McCarthy’s proposal to focus on entitlement reform as the new majority’s signature initiative. Even more remarkable was Thune’s endorsement of the notion that the soon-to-be breached debt-ceiling could be leveraged in a bid to force President Biden’s hand on cuts to Medicare and other health programs. Just as Gingrich gambled that the 1995 shutdown would hurt Clinton more than Congress, today’s Republicans seem to be operating on the questionable assumption that Biden would be held responsible for a default and a possible bond rating downgrade, with Medicare cuts serving as the debate’s policy hinge.
The emerging GOP budget-war strategy, then, looks fundamentally self-destructive for the GOP. Even Donald Trump understood the new base of the Republican party—older, less upscale, and heavily dependent on entitlement programs—does not welcome cuts to government welfare. Ditto independents and Democrats. In the spring, Senate Minority Leader Mitch McConnell castigated his leadership colleague Senator Rick Scott for proposing GOP candidates run on entitlement reform and raising taxes on low-income wage earners. (Scott’s idea was adopted by Blake Masters in his campaign—let’s just say it wasn’t a plus.) Apart from a handful of budget hawks, there is literally no one who favors these cuts. Why, then, would the Republican leadership in the Senate join with McCarthy in pushing it forward now?
Republicans might simply be putting out Freedom Caucus bait. The 2022 GOP campaign was essentially a policy-free affair—unless one considers investigating sad-sack Hunter Biden a policy. The GOP leadership message could be intended as a bone for its radicals to chew on for a few months while McCarthy and company try to figure out how to manage the House chamber “Thunderdome.” If, however, the presumptive Speaker manages to push through entitlement reform welded to a debt limit extension, he will succeed only in identifying the Republicans as the party of “cut, default, and downgrade” while alarming a significant chunk of senior citizens that the “new” Republicans are just like the old ones who wanted to balance the budget on the backs of the poor, the sick, and the elderly.
While darkly amusing, this opéra bouffe is also tinged with regret. Entitlement reform is a big, important issue. It deserves to be taken seriously for the long-term economic health of the country. Neither party, even if they wanted to, could fix the growing problem on its own. Reforming and sustaining these critical programs must be a bipartisan affair because to do so will require both painful benefit cuts and significant tax increases, effectively forcing both parties to make compromises on issues that are politically dear to them. Both sides will have to sacrifice some of their short-term political interests for the long-term good of the country. Politicizing the issue to preempt the possibility of compromise, as Gingrich and Clinton’s advisers did in the fall of 1995, is a setback for responsible government.
But one thing we’ve learned in the “staffing for comms” era is that responsible government is not much on the minds of Republicans. As was said of the Bourbon kings, they are people who “have learned nothing and forgotten nothing.” They remember being fiscal conservatives, but they seem not to have learned that weaponizing this instinct often leads them to prolonged and painful debacles. Charging up this hill again could weaken a party already enervated by Trumpism.
This country’s system of checks and balances depends on having serious, competitive parties. At the moment, we are at least one short.