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A decade later, GOP eyes a new, misguided debt-ceiling crisis

A full decade after the nation's first-ever debt-ceiling crisis, Republicans like Florida's Rick Scott are gearing up for a dangerous sequel.
Image: U.S. Senator Scott speaks after the Senate Republican GOP leadership election on Capitol Hill in Washington
Sen. Rick Scott, R-Fla., speaks on Capitol Hill after the Republican Conference held leadership elections on Nov. 10, 2020.Erin Scott / Reuters

One of the first signs of trouble came about six weeks ago. Politico reported that congressional Republicans, outraged that Democrats had the audacity to pass a COVID relief package that the GOP didn't like, were "plotting" their "payback." One retaliatory measure, in particular, stood out.

Several GOP senators are already lining up against raising the debt ceiling without associated spending cuts, including National Republican Senatorial Committee Chair Rick Scott (R-Fla.). That belief is "pretty widespread within the Republican conference," Sen. Mike Braun (R-Ind.) said; [Senate Minority Whip John Thune] said he doubted that 10 Republicans will vote for a clean debt ceiling increase.

As it turns out, this was not idle chatter. NBC News reported last week that Florida's Rick Scott really is "pushing the GOP to insist on dollar-for-dollar spending cuts as part of a debt ceiling increase ahead of a July 31 deadline." The far-right senator conceded he wasn't sure if he could convince his Republican colleagues to go along with such a scheme, though he added, "I'm working on it."

A few hours later, the Washington Post moved the ball forward, noting that Senate Republicans held a private discussion on the party's strategy for the coming months, and signaled a willingness to "oppose any future increase to the debt ceiling unless Congress also couples it with comparable federal spending cuts."

And with these reports in mind, it seems like now is as good a time as any to take stock with a Q&A.

Wait, do we really have to talk about the debt ceiling again?

I'm afraid so. No one wants to have this conversation -- now or ever -- but Senate Republicans are picking the fight, so it's important for the public to understand what's at stake.

Fine. It's been a decade since I last thought about this, so you might as well refresh my memory and tell me what the heck the debt ceiling is.

In our system of government, Congress has the "power of the purse" and appropriates federal funds, but it's the executive branch that actually spends the money. For the most part, this works relatively smoothly, though there's an important sticking point: the executive branch lacks the legal authority to spend more than the country takes in.

Since the United States nearly always runs an annual budget deficit, this means administrations have spent decades going back to Congress and asking lawmakers to extend the nation's borrowing limit -- in effect, getting permission to spend all of the money lawmakers already allocated.

This model seems badly flawed.

It is. In fact, no major economy on the planet operates this way.

What happens if the United States fails to extend its borrowing authority?

Nothing good. Failure would result in the world's largest economy defaulting on its debts and obligations, which would likely spark a global crisis.

But for most of modern history, this hasn't made much of a difference, right?

Right. Lawmakers in both parties have occasionally used the process of raising the debt ceiling for grandstanding, but neither party had ever seriously entertained the possibility of trashing the full faith and credit of the United States government.

And then?

And then Republicans won control of the U.S. House in the 2010 midterms, and got to work launching a first-of-its-kind debt-ceiling crisis in 2011. GOP lawmakers told the Obama White House that they would refuse to extend the nation's borrowing limit -- which is to say, refuse to cover the debts the nation had already accrued -- until Democrats met the Republican Party's non-negotiable demands.

You make it sound as if GOP elected officials held the nation hostage.

Because they did. In fact, Senate Minority Leader Mitch McConnell (R-Ky.) himself described his party tactics as a "hostage" strategy at the time. Soon after, then-Vice President Joe Biden reportedly told congressional Democrats at the time, in reference to GOP lawmakers, "They have acted like terrorists."

What was it, exactly, that Republicans included in their hostage ransom note?

Then-House Speaker John Boehner (R-Ohio) came up with what he called the "Boehner Rule": Any debt-ceiling increase would have to be tied to a dollar-for-dollar spending-cut agreement. In other words, if Congress had to raise the limit by $1 trillion, then the Democratic administration would have to agree to $1 trillion in spending cuts. A $2 trillion increase to the debt ceiling would require $2 trillion in cuts. And so on.

That sounds familiar.

It should. Though the Boehner Rule eventually disappeared -- it was a mindless gimmick, which was substantively based on total gibberish -- it's the same idea Rick Scott is pushing now.

When GOP lawmakers created this crisis in 2011, did it really make a difference?

Yes. The fact Republicans were prepared to crash the global economy, on purpose, did not go unnoticed. Just as the nation was finding its footing after the Great Recession, the GOP's debt-ceiling crisis slowed job growth in the United States to a crawl, did real harm to the nation's global reputation, and led to the first-ever downgrade to our debt rating.

Why didn't Republicans pay a price for engaging in such scandalous tactics?

Largely because it wasn't treated as a scandal. Much of the Beltway media covered the story as just another fiscal fight between Democrats and Republicans. GOP lawmakers got away with creating a deliberate crisis, threatening to hurt Americans on purpose unless their demands were met, but there wasn't even a hint of accountability for the perpetrators. It's likely why folks like Rick Scott feel comfortable giving this another try.

So why has it been a decade since I last heard about this?

Because when Republicans tried to launch additional debt-ceiling fights after 2011, then-President Barack Obama drew a line in the sand from which he did not deviate: he would not negotiate with those threatening Americans with deliberate harm. GOP lawmakers made post-2011 threats, and put together ransom notes, but when the Democratic White House refused to engage, Republicans ultimately had no choice but to approve clean debt-ceiling increases.

And what about during the Trump era? Did Democrats try to borrow a page from the GOP's playbook?

No. During Donald Trump's term -- a four-year period in which Republicans forgot to pretend to care about the deficit and spending concerns -- Congress raised the debt ceiling three times without incident. Two years ago, Trump went so far as to declare, "I can't imagine anybody using the debt ceiling as a negotiating wedge." The Republican went on to describe the debt limit a "sacred thing in our country."

Evidently, the GOP has changed its mind now that there's another Democratic president.


What's to stop President Biden from taking the same line Obama took, telling Republicans he simply won't negotiate with anyone -- foreign or domestic -- who threatens Americans' wellbeing?

Biden may very well do exactly that, and by any fair measure, it would be the smart move. For now, all we've heard from the White House is that the president "fully expects that Congress will meet its obligations as it did on a bipartisan basis three times during the Trump Administration and amend the debt limit law as needed."

What's next?

The next deadline is still a few months away, but the fact that some Senate Republicans are already plotting such a politically violent threat needs to be taken seriously. Democrats may control the House and Senate, but GOP senators can filibuster a measure to raise the debt ceiling.

And if they do?

Democrats can (a) find 10 Senate Republicans willing to do the right thing, (b) try to use the reconciliation process; or (c) finally overhaul the filibuster rules. Indeed, another GOP debt-ceiling crisis would offer powerful evidence to reform advocates, reminding Democratic skeptics that the existing rules have the potential to be literally dangerous to the nation's economic health and stability.

Watch this space.