A Deal Not to Deal

Both parties in Congress agree to keep future debt-limit crises alive.

House Speaker Nancy Pelosi on Wednesday in Washington.
House Speaker Nancy Pelosi on Wednesday in Washington. Win McNamee/Getty Images

“This is the final nail in that coffin,” Wisconsin Sen. Ron Johnson lamented Tuesday afternoon. He was referring to the new two-year budget deal that Congress reached on Monday, which killed off what remained of the 2011 Budget Control Act setting spending caps that Congress has routinely lifted.

“I’m highly disappointed, once again, that the general tendency of Congress is to spend more money,” he said. “How do you get a deal? We’ll spend more money.”

A Republican waxing apocalyptic about uncontrolled spending sounded positively old-fashioned. But it was a day for Congress to try on normalcy. In the new agreement, like the deal reached last year, Democratic and Republican negotiators resolved their differences by giving the other side what they’d requested: significantly more money both for defense and for domestic spending, as Republicans and Democrats had sought, respectively.

The Democrats could, in fact, point to a greater increase in domestic spending than in defense. Most of the heartburn, then, has come from Republicans who see little need for any domestic spending whatsoever.

But the Democrats made their own set of concessions to get a bipartisan deal. House Speaker Nancy Pelosi agreed not to pursue certain policy “riders” anathema to the White House and Republican legislators, such as blocking the president’s authority to transfer money toward construction of a border wall or removing the Hyde amendment, which bars federal funding for abortions.

Beyond setting aside those budget fights, the Democrats also agreed to set aside the larger fight about budget fighting by suspending the debt limit until July 31, 2021. That means there won’t be another debt-limit crisis until after the 2020 election—which could put the next one, as some wary Democrats noted, smack-dab in the middle of a hypothetical new Democratic president’s first year, when Republicans would be looking for a leverage point to block the administration’s agenda.

“The timing of it really bugs me,” Adam Jentleson, a former deputy chief of staff to former Senate Majority Leader Harry Reid, told Bloomberg. “It sets up a crisis of the first year of the next president’s administration. We’re letting them light the fuse on another bomb and place it squarely in the middle of the next president’s first year in office.” Bloomberg also cited “other presidential campaigns” that “expressed similar concerns, but declined to say so publicly.”

And in a statement Tuesday, California Rep. Ro Khanna, a prominent progressive, said that Democrats “are losing our leverage by agreeing to a lifting of the debt ceiling for the remainder of this term but then in turn handcuffing a future progressive President in 2021.”

But the reactions from most Democratic senators and staffers to this question on Tuesday ranged from shrugging to hostility.

“I haven’t thought about that yet,” Connecticut Sen. Chris Murphy told reporters when asked about the potential pressure point. “At some point we should probably get rid of this permanent Sword of Damocles, it doesn’t make a lot of sense.”

When asked why not now, Murphy said, “You could, but that’s not a bottom line for me. Eventually I’d like to see us get rid of it … That doesn’t need to happen now to get my vote.”

Maryland Sen. Chris Van Hollen, meanwhile, said “Oh goodness, two years seems like light years around here,” adding that “we’re going to have a lot of bumps around the road before we get there.”

Democrats, in general, still seem so traumatized by the debt-limit battles of the Obama years that they will support a clean two-year extension with no questions asked just to get it out of the way. As long as they can be sure there’s no crisis right now, why worry about where the country might be in two years?

Democratic aides close to the negotiations, meanwhile, described the concern as “idiotic” and coming from people “who don’t know what they’re talking about.” Well, OK. They did raise a few reasonable objections, though, to progressives already circling July 31, 2021 as the date of the Apocalypse.

The first is that July 31 isn’t really the date. That will come some months later—anywhere from three to six—after the Treasury has exhausted its “extraordinary measures” authority to keep paying the bills. A new Democratic president would then have more runway to accomplish central agenda items before landing in another debt negotiation. And because the debt limit would expire at roughly the same time as the new budget deal, it would be easier to follow it with another all-encompassing agreement rather than a stand-alone debt limit bill, which is more difficult to pass—and easier to hijack—on its own.

The other point is: What’s the alternative? So long as the debt limit exists, a hypothetical Democratic president will have to get Congress to raise it at some point during their term. The only other choice is to get rid of the statute altogether.

When I asked whether they had pursued that in the talks, a Democratic aide told me that they considered it but found it to be “too difficult.” Though Democrats all probably could have gotten on board, it would have been a bridge too far for too many Republicans in a bipartisan negotiation, and too unattainable a request for Democrats to have dug in on at the expense of other funding priorities.

That assumes, however, that there will a better time for Democrats to permanently end the debt-limit crises—that “some point” that Murphy alluded to. Right now, there’s a Democratic House and a Republican president who doesn’t seem to care about the sanctity of our misbegotten borrowing authority. Two years from now, if things have returned to the 2016 version of normal, that opportunity will be gone, replaced by the political incentives to play chicken with the debt again. “Some point,” then, will likely arrive shortly after the first time we breach the limit and get a taste of the consequences.