Opinion

Why the Debt-Ceiling Fight Could Get Really Ugly — and How It Might End

Ross Douthat, a Times Opinion columnist, hosted an online conversation with Liam Donovan, a Republican strategist and former National Republican Senatorial Committee aide, and Haley Byrd Wilt, an associate editor at The Dispatch, to discuss Kevin McCarthy’s speakership and how the divisions in the House G.O.P. might affect American politics.

Ross Douthat: Thanks for joining me. We’re going to talk about the year ahead for the new speaker of the House and his extremely thin majority, with special attention to the debt-ceiling negotiations, especially off the recent warning from Treasury Secretary Janet Yellen that the United States will hit its borrowing cap very soon — perhaps this week.

But first, a basic question: To the best of our knowledge at this point, what were the key promises that Kevin McCarthy made to his critics in order to win the speaker’s gavel?

Liam Donovan: McCarthy’s challenge has been to elide the lack of trust between a more establishment wing of the party and the more pugilistic Freedom Caucus. The most consequential concession McCarthy made was handing over the speaker’s control over the Rules Committee and reviving the single-member motion to oust the speaker as the ultimate enforcement mechanism should the deal go south.

Haley Byrd Wilt: I agree that the Rules Committee seats are the most consequential. I’m looking forward to finding out whether the Freedom Caucus members will use that influence to actually enforce open rules for spending bills, which allows any member to offer amendments that could scuttle the legislation altogether.

The concessions McCarthy gave away theoretically could empower individual members of both parties. But that depends on whether Republicans, and the Freedom Caucus, actually follow through on that or whether they decide to carve out an open legislative process for Republicans and not so much for Democrats.

Douthat:

In trying to understand the moderates during the speakership fight, is it primarily a matter of temperament and attitude, or is it a matter of incentives? Meaning, if some of the moderates want to form an alliance with Democrats, is their assumption that doing that, even in a district won by Joe Biden, would just be a kiss of death in their next primary? Or do they just like McCarthy?

Byrd Wilt: Many of the moderates relied on McCarthy for campaign support. They didn’t appear ready to contend with the Freedom Caucus, at least not at this stage, partly because they think they have the numbers to advance their own priorities where the Freedom Caucus may not. But the Freedom Caucus does have the power to unleash chaos, both in the form of government shutdown standoffs and the debt ceiling deadline. And the moderates haven’t quite reckoned with how to address those things.

The conservative representative Matt Gaetz, center, doesn’t have to worry about moderate Republicans allying with Democrats, Liam Donovan says. Credit…Mark Peterson for The New York Times

Donovan: I think it’s both temperament and incentives. Temperamentally, the moderates are team players, and the logical extension of that is never going to be siding with Democrats. But absolutely the reason Representative Matt Gaetz and others were able to be so flippant about that remote threat is that moderates joining hands with Democrats to beat conservatives would play right into their argument and ultimately be the end of those members’ future in the G.O.P.

Douthat: Let’s turn to the debt-ceiling issue. A lot of moderates and market watchers seem relatively sanguine, on the grounds that we’ve seen debt-ceiling fights before in the Obama era, and we know this will end (eventually) in compromise. But Liam, you’ve talked a lot about how there’s a big gulf between what conservatives consider the lessons of those Obama-era negotiations and how the Biden White House remembers them. Can you talk about those dueling visions?

Donovan: This is the fundamental problem at play — a mutual comfort level based on shared experiences from the not-so-distant past that the sides took very different lessons from.

For Republicans, the showdown in 2011 was the signal achievement of the Tea Party: staring down President Barack Obama and forcing the cuts associated with the Budget Control Act. It validated one of the animating forces of the right over the past decade-plus — that the party’s failures are a result of weak, feckless leadership, and if they fight, they win.

For Democrats, including Joe Biden, who as vice president had a front-row seat to the deal, it was evidence of why you should never negotiate under these circumstances, because it enables and encourages ever more reckless hostage-taking. That informs their current posture, as does the fact that they actually won the last such game of chicken in 2021.

Byrd Wilt: There’s a worrying trend of edging closer and closer to red lines because lawmakers think there’s political benefit and that there won’t actually be consequences.

Part of it is the assumption that someone else will handle it. It’s what we saw leading up to Jan. 6, when members of Congress were telling people that the election could be challenged. There were consequences to that. And many Republicans who didn’t actually want to overturn the election but who adopted that posture publicly were relying on Mike Pence and their other colleagues to not actually overturn the results.

Donovan: Classic hope yes, vote no situation. Rank-and-file Republicans fully expect and even prefer a given outcome but fear the wrath of the base.

Byrd Wilt: Right, and those dynamics persist within the House G.O.P. It’s why the debt ceiling fight may be even more unwieldy than a decade ago.

Douthat: Is there anyone in the House leadership besides McCarthy who seems like a likely point person for negotiating successfully between the right flank and the White House or Senate Democrats?

Donovan: The most reliable and transparent narrator in the conference is Chip Roy of Texas, who isn’t part of leadership or even a likely ambassador to the White House. He is the sort of person with a lot of credibility right now and will be instrumental to finding any sort of offramp that would be acceptable to a broad swath of the House G.O.P.

Byrd Wilt: I agree that Roy is the most effective spokesman for that flank, but I’d expect someone like Tom Cole of Oklahoma, who’s been a senior appropriator for a while, to be involved in conversations with the White House and congressional Democrats. That’s part of the challenge that Liam alluded to: What are House Republicans actually going to be fighting for with this leverage? They don’t seem to quite agree yet.

Donovan: The other part of this is that any palatable solution is more likely to come out of the Senate, where there still is a productive working relationship between the center right and center left. At the end of the day the House Republicans will have to swallow what is for them a bitter pill, so the ideas that are socialized by senators like Joe Manchin, Thom Tillis, Mitt Romney and ultimately Mitch McConnell may prove to be the difference.

Douthat: OK, forcing you both to play prophet: What’s your best guess as to the specific nub of debate when we get to the brinkmanship stage, the “ask” of the House conservatives, the fig leaf they get in the end?

Donovan: Working backward from what might be a conceivable fig leaf — something that Republicans would want that Biden could give without being seen as paying a ransom — I look at the TRUST Act, which is a bipartisan Senate bill with support from precisely the sorts of dealmakers you might expect, that would be a meaningful nod toward the nation’s fiscal trajectory without setting up automatic reductions in spending, i.e., Sequester 2.0.

Will it be enough for the House conservatives? I doubt it, but unless/until they can coalesce with 218 votes around an ask on the spending side that could be enacted into law, they have less leverage in the end than they think.

Byrd Wilt: The debt-ceiling talks are also probably going to get all mixed up with government spending negotiations. So part of the debate could conceivably be more spending for border security. And likely broader funding cuts — there is money to cut, like unspent pandemic relief money, that could possibly pass this year.

But the question is whether conservatives find those kinds of pots of money that they could actually win enough support to cut, and work on building consensus for it, or whether they’ll focus on nonstarters for Democrats like slashing Social Security. Since last summer, several Republicans have mentioned entitlement program reforms connected to the debt ceiling. That would be a pretty toxic fight.

Douthat: OK, two last predictive questions. First, is there another issue beside the public fisc where you expect the House G.O.P. to divide or Kevin McCarthy’s job to get really unpleasant?

Donovan: Debt limit and government funding are really the only must-do items on the congressional agenda and why they’ll cause by far the most heartburn. Any other legislative activities are elective and shouldn’t be the source of too much drama.

But the overall tone and tenor of the House oversight, up to and including any decision to go after Biden, stands to be the biggest point of disagreement. I think having a strong relationship with Jim Jordan of Ohio is the best thing McCarthy has going for him in this regard.

Byrd Wilt: Part of the Freedom Caucus members’ deal with McCarthy was reportedly more open amendments processes for appropriations bills. That hasn’t happened in years, and with a House majority as slim as McCarthy’s, there will be plenty of opportunities for Democrats to pick off just a few Republicans and add amendments to these bills that threaten their overall passage.

This happened when Paul Ryan was speaker — Democrats added a gay rights amendment to a spending bill with some G.O.P. support, and the overall bill fell apart. McCarthy will be herding cats if that part of the deal holds up.

Donovan: Haley is right, one of the biggest problems Republicans will have to grapple with isn’t McCarthy’s going back on any given deal, but what happens when the Freedom Caucus gets what it wants and that doesn’t yield the desired or expected results.

Douthat: And last, is there anything for McCarthy to do over the next two years that counts as success besides bare stabilization and survival — anything that he might actually want to do legislatively outside the world of brinkmanship?

Donovan: If McCarthy is still standing, gavel in hand, at the end of 2024, our sovereign debt is intact, and the government lights are still on, that will count as success by any measure.

In terms of what a functional House G.O.P. would seek to do in an ideal world, it would likely be messaging bills meant to tee up the fights to come in the next election. And of course since our elections never end, the biggest measure of success will be if he is able to protect and even increase his fragile majority.

Byrd Wilt: McCarthy has never been a big policy priorities guy, so I wonder if there is anything this House can accomplish that McCarthy can point to as a success. China policy remains an area Republicans and Democrats largely agree on. For example, there’s a lot of room for building up weapons supply chains to prepare Taiwan to defend itself. NBC’s Scott Wong reported last week about Democrats vying to be ranking member of the House’s newly formed select committee on competition with China — both because they want to make sure it isn’t used to attack Asian people (something Mike Gallagher of Wisconsin, who will be its chair, has emphasized he won’t support), but also because many national security-minded Democrats are interested in it and just want to be on the panel.

Douthat: Thank you both for an illuminating conversation.

Ross Douthat is a Times columnist.Liam Donovan is a principal at Bracewell LLP and hosts The Lobby Shop podcast. Republican strategist and former National Republican Senatorial Committee aide. Haley Byrd Wilt is an associate editor at The Dispatch and the author of Uphill, a newsletter about Congress.

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