Debt talks: Republicans back themselves into a corner.

Who's winning, who's losing, and why.
July 13 2011 7:11 PM

Debtors' Prison

How Republicans backed themselves into a corner in the debt debate.

John Boehner and Eric Cantor. Click image to expand.
John Boehner (left center) and Eric Cantor (right center)

Near the end of The Dark Knight, the Joker comes up with a brilliant plan to befuddle Batman and the police. Instead of ordering his henchmen to stand over their hostages, he forces the hostages to stand up and point phony guns at the henchmen. From afar—from, say, a sniper's scope—it looks like the hostages are actually the people to take out.

David Weigel David Weigel

David Weigel is a reporter for Bloomberg Politics

The gambit doesn't work, for complicated and irrelevant reasons that raise serious questions about spying and cell phone security. It's still a useful way of understanding the switcheroo that Republicans are trying to engineer in the debate over the debt limit. So far their ruse is as unsuccessful as the Joker's was.

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Sen. Mike Lee, R-Utah, is a Tea Party freshman who's started to speak out on a number of constitutional issues. On Wednesday afternoon, after a meeting with fellow Republican senators, Lee told reporters that Minority Leader Mitch McConnell's plan to shift responsibility for the debt limit from Congress to the president was unacceptable. It gave up the GOP's leverage to push through reforms.

"Why is the president willing to push us into a debt-ceiling-induced financial shortfall by virtue of the fact that he's not willing to convince his party to support a balanced-budget amendment?" asked Lee. "What is so wrong with that request that the president is willing to withhold Social Security payments to current retirees?"

Reporters blanched. One asked whether he was accusing the president of holding the country hostage.

"Yes!" said Lee. "That's exactly what I'm saying. That's absolutely what I'm saying."

What do you need to believe in order to agree with Lee? You need to believe that the Treasury Department is lying about the difficulty of re-jiggering mandatory payments to Social Security recipients, veterans, and everyone else. You also need to believe that the White House relishes a fight that makes Republicans look like zealots ready to risk default for a few days in order to make a point about spending.

The first part of that isn't true. The best evidence Republicans have for it is a Goldman Sachs report—and sure, those guys are trustworthy, right?—which theorizes that the Treasury could avoid default if it prioritized different kinds of spending. The same report warns that this would happen amid a "huge, immediate fiscal retrenchment," and less rosy reports remind us that the Treasury would need to stall some 40 percent to 45 percent of 80 million mandatory monthly payments. And the second part of the argument is hard to comprehend. How could President Obama have so badly misread the debt fight and the GOP's leverage eight months ago if he was gearing up for the battle today?

Republicans have done well in the debt fight so far. For months they made sure the debate was on their terms: The debt vote was leverage to force Washington to embrace austerity. The McConnell gambit and the "hostage" charge—made by Michele Bachmann just a few hours before it was made by Lee—represent a rethink. This is dangerous stuff to debate. It's not good to be indifferent (or at least feign indifference) about a possible downgrade in America's credit rating, and then have Moody's come out and say it's got doubts about America's credit rating.

Republicans have a problem: You can't run the McConnell play and the Bachmann/Lee play at once. For weeks, conservatives have used the debt fight to garner support for a "Cut, Cap, and Balance" pledge, promising their votes for an increase only if those three verbs were taken seriously and forcefully. They're not concealing their fear that the McConnell punt takes away their leverage. When I asked Tea Party leaders about which plan they preferred, they all sided with Bachmann/Lee against McConnell.

"There's a cost/benefit analysis here," said Max Pappas, who runs FreedomWorks' PAC. FreedomWorks responded to the McConnell idea, within minutes, by asking supporters to melt Senate GOP phone lines with strangled cries of, "No!"; on Thursday, its members will haunt the offices of some Democratic members of Congress to work them over, too. "If they voted for this, they'd be voting to cede constitutionally granted power from Congress to the executive. I can't see that as something we'd look favorably on," Pappas said. "We don't care who owns what or which party's to blame for what."

Sal Russo, the political guru for the Tea Party Express, saw McConnell's point. "There is an appeal to putting the blame for a failure to address our skyrocketing national debt and excessive spending on Obama," he said. "But the situation is too critical to not take immediate steps to reign in this fiscal disaster. So we think cuts and spending limits should be addressed now."

"If Congress passed [McConnell's] proposal into law," said Jenny Beth Martin of Tea Party Patriots, the movement's umbrella group, "they would be abdicating their duty as prescribed in the Constitution. While there may be political advantages to one party or another with the maneuvering, proposals, and backroom deals, we are concerned with what is advantageous to Americans regardless of political party."

The Tea Party actually believes this—and if he were sufficiently devious, any Republican strategist should be able to see the position's merit. All of the debt ceiling compromises discussed so far are a horrible deal for Obama. They give him partial ownership of a plan that cuts both entitlements and any economic growth that was being spurred by government spending. McConnell actually admitted this in an interview with Laura Ingraham.

"They want to blame the economy on us," he said, explaining why he wanted to punt. "The reason that default is no better an idea today than when Newt Gingrich tried it in 1995 is that it destroys your brand and would give the president an opportunity to blame us for the bad economy. Look, he owns the economy. He's been in office nearly three years now. We refuse to let him entice us in to co-ownership of a bad economy."

It was of a piece with what John Boehner's been saying for months: that Republicans, who can and do stop whatever legislation they please, only control "one-half of one-third of the government." If you buy that, it's possible that the president really is holding America hostage over the debt ceiling. But why, at this point, would you buy it?