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Republicans’ fiscal responsibility theater

29 September 2021

12:02 PM

29 September 2021

12:02 PM

If you think Washington couldn’t get any more dysfunctional, think again.

On Monday night, Senate Republicans blocked a Democratic attempt to avoid a government shutdown. This raises the temperature in a Congress that’s already had, shall we say, a pretty high fever since being sworn in on January 3.

Depending on who you ask, the Republicans’ latest action is either a brave attempt at stopping Biden’s massive spending package — Mitch McConnell’s stated perspective — or a foolish gamble bringing us one step closer to a debt default, as Democrats claim.

In a sense, both sides are right. But Washington also needs to remember that refusing to raise the debt limit is akin to cutting up the credit card after maxing it out. It doesn’t solve the actual problem.

The vote over the debt limit is not taking place in isolation. It comes on the heels of a substantial debate over a number of the administration’s other priorities — infrastructure most prominently, but also the climate, immigration and practically everything else. Each item comes with a hefty price tag.

Adding the debt ceiling into the mix is just one more challenge for a Congress still struggling to move past last November’s election. No doubt the Biden administration is proposing to spend an incredible amount of money. There’s also increasing doubt that all of it will be paid for, despite messaging to the contrary.

The first part of Biden’s proposal is an approximately $1 trillion infrastructure plan to address what the administration sees as crumbling roads, highways, and bridges. That bill passed the Senate in August and is now set for a House vote this week.

But infrastructure is only a small part of the Democratic agenda. The progressive wing of the party is demanding a laundry list of priorities — hence a subsequent $3.5 trillion budget reconciliation proposal to enact all the rest.


If only it were that simple. You might ask why infrastructure is being split off from everything else in the first place. Why not just put it all into one package and be done with it?

The answer is unsurprising: politics — and procedure.

For one, Democrats do not have the votes to enact all of the priorities in the Biden agenda. Although multiple polls show that a majority of Americans — and even many Republicans — support increased federal spending on infrastructure, the same is not true of other Democratic proposals. Few GOP elected officials would vote for the infrastructure they may want in return for more expensive things they don’t.

But the even bigger hurdle is the process itself. Theoretically, Democrats could put everything together into one package and pass it without any Republican support via reconciliation, a special budgetary process once meant to be a tool for reducing deficits.

Unfortunately for Democrats, a razor-thin margin in the Senate means their party would have to vote unanimously even with reconciliation. And at least two Democratic senators, Joe Manchin and Kyrsten Sinema, have expressed reservations about the size and scope of the reconciliation bill. The true cost is unknown at the moment, because the Congressional Budget Office has so far only scored a small part of the package.

As a statement from the Committee for a Responsible Federal Budget noted, ‘Right now, we don’t know whether the reconciliation package currently being considered would cost $3.5 trillion, $4 trillion, or $5 trillion, and we don’t know whether it is deficit-neutral.’ Few would argue that the Democratic plan even remotely approaches fiscal responsibility.

But it’s also difficult to argue that the Republican gambit is responsible. It wasn’t so long ago that the GOP was happily running up the debt under Donald Trump, with little thought as to future consequences.

As Michael Strain of the American Enterprise Institute put it recently in an op-ed in the New York Times, ‘One thing Mr McConnell’s argument ignores is that lifting the debt limit would be necessary even if Congress didn’t spend another dime on Mr Biden’s agenda.’

Sure, one could say that the brinkmanship is aimed more at getting procedural concessions from Democrats by forcing them to use their reconciliation package to raise the debt limit as well, leaving them less flexibility to pass big items going forward and taking responsibility for the move. But procedural complications ultimately may prevent Democrats from doing so.

It’s hard not to be cynical over Republicans suddenly finding religion yet again on budgets now that they are not in power and can do little more than play games.

It’s too early to tell how this all will end, but the most recent reports indicate that Democrats are slowly unifying on a path forward. Knowing that they may only be able to pass part one of the president’s agenda, more moderate Democrats have been making the case that they should do just that and deal with the rest later. That may not make progressives happy, but it seems like their opposition to delinking infrastructure and reconciliation may be softening.

As for the debt limit, let’s be clear: Congress will find a way. They always do: 49 times under Republican presidents and 29 times under Democrats. Whether that 30th time comes via reconciliation remains to be seen, but both parties are more likely to find themselves back at the negotiating table before long either way. It would be hard to draw up a more convoluted path to an eventual compromise, but one thing Congress does reliably well is to keep finding ways to spend taxpayer money.

One can be forgiven for hoping these latest standoffs are a sign that the next time Republicans have real power, they will stop running up such enormous bills.

But as one Republican president famously said, ‘fool me once.’

Jonathan Bydlak is the director of the Governance Program at the R Street Institute, a center-right think tank.

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