There has been a lot of wailing and gnashing of teeth over the debt deal President Donald Trump made with congressional Democratic leaders that pushes U.S. debt over the $20 trillion mark.
Is it a bad deal? From my perspective, almost certainly. Debt is an existential threat to the Republic, and I believe that we should reduce spending by eliminating vast swathes of federal government programs (Federal housing sibsidies? End them. Department of Education? Eliminate it. Agribusiness subsides? End them all. Etc.) until the budget is balanced. Then you wouldn’t have to worry about hitting the debt limit at all.
Sadly, my position seems to be a decidedly minority one in D.C. Since politics is the art of the possible, it’s better to ask: How bad is President Trump’s deal among the constellation of actual debt limit deal possibilities?
The answer seems to be: Still not great, but maybe not as bad as first impressions.
It’s possible that President Trump went for the deal because he had no choice, as Republican congressional leadership was woefully unprepared on the issue:
With much of the Washington Republican establishment still grumbling about President Donald Trump’s decision earlier this week to strike a deal with Democratic leaders Chuck Schumer and Nancy Pelosi, one prominent member of the House Freedom Caucus took to the Sunday Talk Shows to deliver what sounded like the faction’s official response to the week’s events.
In an appearance on Fox News Sunday, Ohio Rep. Jim Jordan struck a delicate balance: criticizing the consequences of the president’s decision without impugning the man himself.
Jordan explained that while the Trump-Schumer-Pelosi deal wouldn’t be “good for the American taxpayer” the president can be excused for agreeing to it because Republicans in Congress failed to provide him with a suitable alternative.
And just like that, a member of the House’s most intransigent, conservative faction – the group that almost singlehandedly crushed the Trump administration’s health-care ambitions – turning the blame for Trump’s debt-ceiling can-kicking, and the powerful leverage that Democrats gained because of it, back on the president’s favorite opponents: Congressional Republicans.
Here’s Jordan:
I don’t think this was a good deal for the American taxpayer. We didn’t go anything to address the underlying $20 trillion debt but frankly what options did the president have in front of him? The first time the Republican conference talked about the debt ceiling was Sunday morning. And the Freedom Caucus had called for, nine and a half weeks ago, we said ‘don’t leave town until you have a plan on the debt ceiling’ and instead we went home for the longest August recess in a decade, longer even than in elections years.
Indeed, the deal House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell wanted was actually worse for conservatives:
Trump on Wednesday agreed to the proposal of House minority leader Nancy Pelosi (D., Calif.) and Senate minority leader Chuck Schumer (D., N.Y.) to increase the national-debt limit for three months, and attach that to emergency aid for victims of Hurricane Harvey. But just days earlier, conservatives had been wringing their hands in fear that Schumer would turn the debt ceiling into the Democrats’ newest set of brass knuckles.
If not for the high-profile urgency of, in essence, stapling the debt limit to Harvey assistance, the pressing need to re-charge Uncle Sam’s credit card would have given Schumer a fresh way to beat up Republicans. Absent Harvey, Schumer and his band of toughs would have kidnapped the debt limit in exchange for something else, perhaps “DACA or death!” Instead, the debt-limit increase slid through, behind Harvey’s shield, with no last-minute hostage drama.
Trump rejected the offer of House speaker Paul Ryan (R., Wisc.) and Senate majority leader Mitch McConnell (R., Ky.) to extend the debt limit for 18 months, past the 2018 mid-term elections. This would have removed federal borrowing from the list of issues on which the GOP could have run next year. Obama hiked the national debt from $10.6 trillion to $19.9 trillion — a staggering 87.8 percent. That mess, and how to escape it, would have been a worthy GOP issue. Ryan and McConnell largely would have obviated that opportunity.
Ryan and McConnell’s 18-month proposal also would have deprived Republicans of a priceless “must pass” vehicle to which they could append items that Senate Democrats dislike. The GOP similarly handed Obama multiple long-term debt-limit extensions that prevented Republicans from sending him short-term debt-limit measures that he would have had to sign, notwithstanding amendments that rankled him. Republicans should not deploy the debt limit every month, in order to corner Schumer and Senate Democrats. But mothballing this weapon until spring 2019 smacks of unilateral disarmament.
From all reports, Ryan and McConnell were ready to drop-kick the debt-limit 18 months down the road, in return for . . . nothing. Even worse, as conservatives correctly complain, they did not tie the debt-limit boost to any structural reforms, such as a cap on federal spending as a share of GDP, adoption of the brilliant Penny Plan (which would balance the budget by cutting total spending by 1 percent every year for eight years), a private-sector audit of every federal department and sub-cabinet agency, or even converting Washington’s books from cash-basis to accrual accounting. Ryan and McConnell promised 18 months of borrowing and spending on autopilot. Trump properly rejected such fiscal brain death.
Now, in three months, fiscal conservatives can and should append reformist language to the next debt-limit increase. Ryan/McConnell would have denied them that opportunity until nearly two Easters hence.
If Schumer wanted to demand “DACA or death!” I would have seen how he likes death: no debt limit vote, cut spending until the budget is balanced, and let Schumer explain why it was necessary for welfare recipients to lose their checks so Democrats could amnesty more illegal aliens.
Like I said, mine seems to be a minority viewpoint.
There are also reports that the deal is written in such a way that McConell might get the last laugh:
Senate Majority Leader Mitch McConnell (R-Ky.) wrote in some “extraordinary” provisions to the debt ceiling bill that could mean there won’t be another debt ceiling fight in 2017 after all, he revealed on “The New Washington” podcast Monday.
McConnell insisted, in the face of Democrats’ objections, that the bill be written to preserve the Treasury’s ability to extend federal borrowing power by moving money around within government accounts. In layman’s terms, that means the Republicans can work around the December debt limit deadline and push that issue into 2018.
All this is just rearranging deck chairs on the Debtanic as long as the driving motivation for current congressional leadership is avoiding bad poll numbers rather than actual conservative governance. But short of a debt deal that includes spine replacement surgery for congressional leadership, there seems precious little chance of congress fulfilling any of the myriad conservative promises they made when Obama occupied the White House.