Rising Anxiety Over a Debt Limit Showdown in 2023




  • In Business
  • 2022-09-29 23:07:31Z
  • By The Fiscal Times
 

Republicans are widely expected to win control of the House of Representatives in November's midterm elections. Axios's Alayna Treene reports that, with that outcome in mind, party leaders and business groups are already preparing for the return of an all-too-familiar "nightmare scenario": a dangerous showdown over the U.S. debt limit.

Some Republicans have already signaled such a showdown is likely - and concern about how it might play out is already on the rise, Treene reports, given that the House GOP caucus is likely to be more conservative than it was in 2011, when the right flank of the Republican Party under then-Speaker John Boehner sought to use its leverage to force President Barack Obama to agree to broad spending cuts.

As ugly as the 2011 clash was, the anxieties surrounding a possible 2023 standoff are heightened because of uncertainty about just what type of speaker Rep. Kevin McCarthy (R-CA) might be if Republicans take the House.

"Business leaders and Republican strategists say a key indicator of McCarthy's approach will be who he and the GOP steering committee back to chair the powerful House Ways and Means Committee," Treene reports. One leading contender, Rep. Jason Smith of Missouri, told Axios that Republicans should leverage the debt limit to have the Biden administration "reverse" its "radical" agenda, indicating that he would try to lay the blame for any crisis at Biden's feet. Another candidate for the post, Rep Vern Buchanan of Florida, "is seen as a more mainstream Republican," Treene notes.

Reasons to worry: The debt ceiling serves little useful purpose and debt ceiling brinkmanship is generally a dangerous - and, frankly, dumb - game. It could be even worse next year.

"Compared to a decade ago, the Republican caucus is considerably more insane," liberal New York columnist Jonathan Chait writes. "The definition of a crazy House Republican in 2011 was an Ayn Rand reader who thought Obama was turning the United States into Greece and might have been born in Kenya. The definition of a crazy House Republican today is somebody who thinks the Democratic Party is controlled by a secret cabal of pedophiles and maybe favors armed revolution. And while John Boehner, who had little in the way of principle or intelligence, was barely able to wrangle his caucus into backing down, McCarthy has an even crazier caucus and even less principles or brains than Boehner."

A way out? Democrats could look to raise the debt ceiling on their own during a lame duck session after the elections. "Both parties are traditionally reluctant to vote for high increases in the debt ceiling because voting to authorize more debt sounds like they're voting to increase the budget deficit," Chait notes. "But at this point, they need to assume it will be impossible to lift the debt ceiling beginning in January, bite the bullet, and take one vote to raise it high enough that they won't need to take the vote again."

The bottom line: The headline on this Philip Bump column in The Washington Post is pretty spot on: "The only thing the debt limit is used for is political blackmail."

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