Sunday, August 25, 2013

Democrats should shut down the government

Not really. But they should let Republicans shut down the government rather than agreeing to a two-month continuing resolution that will bring on debt ceiling apocalypse.

When word was that Boehner would postpone a budget showdown until the debt ceiling is reached in November and try to force a defunding of Obamacare then, I suspected that he and his party would shift gears and seek to extract more attainable budget concessions. That has now happened, as Chait summarizes:
The Republican leadership is perfectly aware that a debt default could have explosive implications and that the Obama administration is not willing to negotiate over it. It’s already formulating a line of retreat to back out of this threat. As Politico reports, they want to tie together negotiations over the debt ceiling with negotiations over budget sequestration. Then they can extract concessions from Obama on the budget and sell them to their base as a ransom for lifting the debt ceiling, rather than admit they just gave in on the debt ceiling.
"Gave in" is a relative term. Extracting further budget cuts beyond sequestration would be a major GOP victory by my lights, if not by the GOP base's. And they may get it. As Chait warns here and has warned before, a debt default (stemming from failure to raise the debt ceiling) is a " vastly more dangerous threat" than a government shutdown. Yet Chait, like Greg Sargent and Brian Beutler, seems to have more faith than I do about what Obama will not yield to if faced with a debt default:

The word Republicans keep using on sequestration is leverage — they have leverage over Obama because Obama hates sequestration. It’s true. Obama wants to replace sequestration with a mix of longer-term, revenue-raising tax reform and cuts to retirement programs. But that sort of meet-in-the-middle compromise, which he included in his most recent budget, is a million miles away from what Republicans are demanding. House Republicans want to trade away sequestration for a delay in Obamacare, which they openly say would be used to force more delays, ultimately preventing the law from ever having a chance to be implemented.

The less extreme Republican sequestration plan is to try to get Obama to cut Social Security and Medicare with no additional revenue, in exchange for lifting sequestration. I highly doubt Obama, who even in his surrender-iest moments in 2011 refused to cut those programs without revenue, would go for a deal like that. Even if he somehow would, Democrats in Congress wouldn’t.
Maybe not. What I suspect Obama might do, under duress, is rejigger the sequestration cuts so that they fall less heavily on defense (and they are scheduled to fall more heavily on defense than on domestic spending next year). Also, he can cast chained-CPI as a revenue increase as well as a benefit cut, and hence as a fig leaf meeting his conditions for cutting benefits. 

Democrats, it would seem, are once again preparing to negotiate on Republican ground. I don't hear anyone saying that a 2014 budget deal is impossible without either shutting off the sequester or replacing it with a mix of revenue hikes and spending cuts -- and that if Republicans refuse those options, they will be shutting down the government. That, in mirror image, is how the GOP plays: Democrats have to cut beyond the sequester to get a deal.

It seems to me that Democrats should either prepare for a showdown in September -- not November -- or prepare some kind of 14th Amendment-type strategy to avoid national default if Republicans refuse to raise the debt ceiling. For Democrats, negotiating over the debt ceiling would be political malpractice of the highest order; so would risking a default. Occam's Razor: their surest ground for a showdown is before the Oct. 1 deadline to fund the government.

Update: Brian Beutler reports that Sen. Tom Coburn, who helped talk Republicans down from shutting down the government in an effort to defund Obamacare, is help the party gear up for a debt ceiling hostage-taking redux -- defund Obamacare, or the nation defaults.  Democrats have ample cause to take such threats dead seriously.


  1. Beutler and Sargent, all too cavalierly and without sufficiently thorough explication, seem convinced that Boehner, in November, will break the "Hastert Rule" on the debt ceiling without tying any conditions to it. In an odd way, the most keyed in and savvy liberal journalists have quietly become Boehner's biggest supporters. To the extent influencing the journalistic conversation matters, this faith in Boehner keeps the pressure off him, allowing other centrist journalists to downplay the level of Boehner's appalling irresponsibility and continue to view the situation as just a insider game.

  2. Of course, the day the debt ceiling is reached does not mean we have to default. That it is even talked about indicates the kind of budgetary chicken the Democrats and the President are playing.

    If the President can authorize a year long delay in the ACA mandates, as well as undertake a full range of executive actions without Congressional authority (in sometimes in contravention of it), then certainly he can set priority to the payments the government makes to guarantee there is no risk of default.

    We collect more than enough tax revenue to always pay 100% of the interest owed on our borrowing. Even after paying 100% of that, we can make 100% of the Social Security payment, 100% of the Medicare payments and make sure any troops in the field get 100% of what they need. Yes, other federal programs and department will face cuts, and have to manage their shortfalls by closing up, most likely, as well as scaling back a lot of the work they do. And, for sure, some people will face hardships because of this and for some of those people, those hardships may be pretty severe.

    But for the vast majority of Americans, the disruptions will be inconvenient at most. And we would all soon wonder why it was we 'needed' the federal government to do so many things for us in the first place.

    But more importantly, our debt would be always paid and there would be no default or damage done to the pledge of our full faith and credit. In fact, such a move would bolster our credit because those who lend us money would see the priority we place on this.