Why House Republicans Are Retreating on the Debt Ceiling

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Jan. 18 2013 4:27 PM

The Republican Retreat

Why House GOP leaders decided to surrender on the debt ceiling—for now.

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House Majority Leader Rep. Eric Cantor (R-VA) issued a statement today regarding a temporary debt limit increase

Photo by Alex Wong/Getty Images

WILLIAMSBURG, Va.—Late Friday morning, in a well-guarded room of a popular golf resort, the leadership of the Republican House of Representatives decided to delay the fiscal apocalypse. They didn’t walk over to the room of reporters covering the annual retreat; an important-looking, flag-flanked podium went sadly unused. Rep. Eric Cantor, the majority leader who represents a district just up the highway, issued a statement that buried the news in the fifth of six paragraphs.

David Weigel David Weigel

David Weigel is a reporter for Bloomberg Politics

“Next week,” said Cantor. “We will authorize a three month temporary debt limit increase to give the Senate and House time to pass a budget.”

Without action, the United States is scheduled to hit the debt limit in late February, maybe early March. Republicans were proposing something equally bland and radical. They would raise the debt limit without demanding spending cuts equal to the new borrowing authority. They would not demand a vote on a Balanced Budget Amendment, as they did in 2011, the last time we stumbled into this faux crisis.

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No, all they wanted was a commitment from the Democratic Senate. The upper house had to pass a budget by the end of the grace period. If it didn’t, said Cantor, “members of Congress will not be paid by the American people for failing to do their job.” The 27th Amendment doesn’t let Congress cut its own pay hastily, so the money would be held in escrow, until the Senate passed something. Republicans wouldn’t demand anything in particular for that “something”—no equal cuts, no defunding of Planned Parenthood. They would just shame the Democrats, something that began quickly on Twitter with a #NoBudgetNoPay hashtag.

How did Republicans end up here? According to participants in the three-day retreat, the party’s first real all-hands meeting since the election had a resigned, realistic tone. Members were assigned to read articles like Ramesh Ponnuru’s post-election wrap, “The Party’s Problem.” Ponnuru had debunked a warm-blanket Republican theory that Mitt Romney’s cartoonish elitism had cost them the election. “Romney was not a drag on the Republican party,” wrote Ponnuru. “The Republican party was a drag on him.”

The message to the conference was that the debt limit wasn’t actually all that great of a lever for change. Thursday, the longest day of the retreat, began with Boehner trying to sell the conference on a short-term debt limit increase. He was aided quickly by Rep. Paul Ryan, who walked members through the math of the debt limit, and talked up the short-term punt.

“They showed us a slide of five or six times in the last 30 years where we’ve come to some really good agreements,” said Rep. John Fleming, a conservative from Louisiana who’d sponsored legislation that would prevent the debt limit from being abolished in a budget deal. “Leading up to every one of those was several short-term increases. It keeps the pressure up until finally both sides decide, ‘You know what? We’ve got to get this off the table until we get a solution everyone can live with that fixes America’s problems.’ ”

As the discussion veered into “messaging,” guests and nonessential staffers were asked to leave the room. Ryan strolled over to the media room, where he said members were being educated on “the consequences of all the deadlines that are coming.”

“We have to recognize the realities of divided government that we have,” he said. “We’re discussing the possible virtue of a short-term debt limit extension so we have a better chance of getting the Senate and the White House involved in discussions in March.”

Republicans convinced themselves that hiking the debt limit for a few months would dramatically change the narrative. In February, the president would give a State of the Union speech, where he could lambaste Republicans for causing a crisis. By April 15, the White House would have to propose a budget. But if Republicans pushed back the debt limit, they’d get to vote first on the continuing resolution, the spending package that funds the government. Next they’d vote on what might replace sequestration, the mandatory $1.2 trillion of cuts inherited from the 2011 debt limit deal. They’d have “credibility,” as Rep. Mick Mulvaney put it, when the next debt limit deadline came up.

“Take the small one first, take the middle one next, and take the debt ceiling last,” said Mulvaney, a Boehner critic who’d lost a vote this week on paying for Hurricane Sandy relief with across-the-board budget cuts. “None of us are talking about default. We understand the risk of default to the country.”

On Thursday and Friday, conservative members discussed what might be added to sweeten a debt limit deal. They could change statutory language so that, in the event the debt limit was breached, the government would prioritize debt payments and Social Security checks, while stiffing everything else. “Whether or not we keep the national parks open is not what people think of when they hear default,” said Mulvaney. “It’s certainly not what the markets think.”

But the leadership’s preferred debt limit hike will be relatively clean. As the meeting ended, Boehner spokesman Michael Steel joined a couple of reporters in the parking lot and walked them through accelerating Lewis Carroll-esque questions about the meaning of reform. Hadn’t the speaker ruled out any debt limit hike that didn’t include spending cuts? “The Boehner rule is cuts or reform for any increase in the debt limit,” said Steel. Forcing the Senate to vote on a budget, with the threat of withholding pay, was reform.

Several times, Republican House leaders have asked the conference to back a compromise bill, then pulled it when the votes weren’t there. And Republicans haven’t given more clues as to what they want from the next inevitable debt limit fight. But they’ve realized how bad they’ve been made to look. When one reporter asked Ryan if he was willing to “shoot the hostage” and hit the debt limit, he rolled his eyes. “I don’t want to use any metaphors such as that, at all.”

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