The plaque over Rep. Kevin McCarthy’s new office may say “Speaker of the House,” but it would be more accurate if it read “Speaker in Name Only.” As McCarthy bumbled his way to the finish line over 15 ballots, Rep. Matt Gaetz, R-Fla., bragged that the holdouts would force McCarthy to govern in a “straitjacket.” In the end, though, McCarthy’s most dangerous “concessions” weren’t given up begrudgingly. They were handed over all too willingly.
In one corner, we have the inside baseball concessions, including plum committee seats and chairmanships for holdouts, votes on bills prized by the far right, and changes to House rules that weaken leadership’s power to push through consolidated spending bills like last month’s omnibus. For practical purposes, these concessions are a step above rearranging deck chairs on the Titanic. McCarthy agreed, for example, to give the House Freedom Caucus three seats on the Rules Committee, which would make it easier for them to veto a bill before it even reaches the House floor. But anything that can’t make it through the Rules Committee isn’t going to get 218 votes on the House floor.
Most of the more substantive “concessions” are tempered by Democratic control of the Senate and White House. The new rules package includes a “cut as you go” (CUTGO) rule, obliging new spending to be paid for only by cutting spending elsewhere. It requires a three-fifths vote for raising taxes. And McCarthy agreed to freeze discretionary spending at fiscal year 2022 levels.
That would not be an entirely bad outcome: An across-the-board cap pegged to FY 2022 would cut defense spending by 10%, or $75 billion — a desperately needed reversal after years of bloated defense budgets. Already, however, even some of the holdouts are insisting defense spending will remain untouched, and the broader GOP caucus has many defense hawks who won’t support any cuts. That leaves massive reductions to housing, education and other domestic programs. Basic math also dictates that following CUTGO would probably necessitate cuts to mandatory spending, such as Social Security and Medicare.
The good news is that a Democratic Senate and president will limit the extent of these cuts. The most likely outcome is one we’ve seen play out before: Republicans threaten or force a government shutdown, before public pressure forces them to rescind most if not all of the cuts. It’s a worrisome prospect, and hardly the sign of a healthy democracy, but the country has weathered such circumstances before.
More terrifying still is the circumstance the country hasn’t had to weather yet: a debt default. The federal government will reach its statutory borrowing limit sometime this year, and both McCarthy and the holdouts are ready to hold the country hostage before agreeing to raise it. The new rules package removes the “Gephardt rule” that would allow the House to duck a vote on lifting the ceiling, and McCarthy told the holdouts that any debt limit increase will only come with spending cuts.
The consequences of a debt default are hard to overstate. When default was last on the table in 2021, economist Mark Zandi of Moody’s Analytics estimated a default would destroy up to 6 million jobs and up to $15 trillion in household wealth, The Washington Post reported then. But where a sane party would not risk economic calamity to get its way, Republicans are salivating to use the threat of economic catastrophe to pressure Democrats into accepting cuts they otherwise wouldn’t.
The timeline of these concessions informs how Democrats can best clean up McCarthy’s mess. As The American Prospect's David Dayen pointed out, many of the new speaker’s concessions were included in the first proposed rules package GOP leaders shared back on Jan. 2 — before McCarthy backed into the speaker’s office with all the grace of a tractor-trailer. The only change to the package being voted on this week was lowering the threshold for the motion to vacate from five Republicans to one — a largely meaningless difference when there are still six Republicans who never voted for McCarthy, and who will likely back each other’s motions to vacate the moment the speaker hurts their feelings.
As for the rest of the changes, Punchbowl News reported Monday on a new “secret three-page addendum” to the rules package that includes the committee assignments, the discretionary spending cap and the promise to tie any debt limit increase to spending cuts. But that last part isn’t as new as some on Capitol Hill would pretend. McCarthy and many other Republicans were on record last year supporting using the debt ceiling to force spending cuts, with McCarthy explicitly refusing to protect Social Security and Medicare.
So what did the Republican holdouts get for holding out? Some plum committee positions and spending caps that won’t survive a Democratic Senate and president. If, as Gaetz claimed, McCarthy is governing in a “straitjacket,” McCarthy put on the jacket himself — and the far right barely tightened the straps.
The truth is McCarthy put a higher price on who sat on what committee than on restraining those imperiling the American economy. When Senate Republicans refused to vote to raise the ceiling last year, Senate Democratic leaders and moderates neglected to raise it under reconciliation with a Democratic House, apparently believing that Republicans would come to the table this year. McCarthy’s words should have disabused them of that notion. Now his deeds are a reminder that, though the 117th Congress had a long list of accomplishments, not raising the debt ceiling was a colossal error.
Cleaning up McCarthy’s mess means finally admitting that the inmates run the asylum — Democrats must be ready to raise the debt ceiling without House Republicans. One path would be for President Joe Biden to challenge the debt ceiling’s constitutionality. Section 4 of 14th Amendment reads, “The validity of the public debt of the United States, authorized by law, … shall not be questioned.”
Another much showier option — endorsed by voices like Paul Krugman — would have the Treasury mint a $1 trillion platinum coin and deposit it with the Federal Reserve, and effectively raise the debt limit for years to come. Gimmicky? Yes. Preferable to default and economic ruin? Infinitely so.
Whatever the course, Democrats cannot wait around for the GOP to come to its senses. McCarthy and his fellow Republicans are determined to take us right up to an economic cliff, and quite likely over it. Everything must be done to find a different path.