Belmont Club

Hold Up or Fold Up?

Keith Hennessey describes the McConnell “last ditch” plan on the debt limit negotiations. The interesting thing about the idea is that nobody quite understands how it will work out politically. In fiscal terms it will probably raise the debt limit by $2.5 trillion. Here’s the core concept.

The debt limit now works as an only if proposition: the debt limit is increased only if Congress votes affirmatively to authorize an increase. Increasing the debt limit therefore requires a majority of the House and Senate to cast a difficult aye vote, plus a Presidential signature. The McConnell proposal would invert this into an unless proposition: the debt limit would automatically be increased unless Congress voted to stop it. And by changing the key vote to a veto override, you would need only 1/3 of either the House or Senate to take a tough vote to allow the debt limit to increase.

In exchange for this significant increase in Presidential authority, the President would take most of the political heat for the debt limit increase, and he would be required to propose difficult spending cuts of an equal or greater amount.

the McConnell amendment would shift authority, power, and responsibility for a debt limit increase from the Legislative Branch to the Executive Branch. Usually the two branches of government fight to maximize their power relative to the other. Here, the Congress would be saying, “Too hot for us – you deal with it.”

This is a time-limited proposal with a specific partisan configuration in mind. All $2.5 T of debt limit increases would technically be the result of Presidential action, not Congressional action. This may explain why Democratic leaders are saying nice things about McConnell’s idea – it lets their Members off the hook just as it lets Republicans off the hook. President Obama would politically “own” the debt limit increases. …

The New York Times and Wall Street Journal editorial pages both endorsed the McConnell proposal, for different reasons. That is astonishing.

POLITICO reports that many House Republicans were furious with the proposal, and that some Senate conservatives are also not onboard. The proposal could not pass the House today, but then I don’t think any debt limit proposal could pass the House today.

The National Review editorial board opposes it, preferring a debt limit increase be packaged with spending cuts. At the Weekly Standard, Bill Kristol and Stephen Hayes oppose it, while Fred Barnes supports it (I think). Leader McConnell should be pleased, in that he has support from a number of outside conservatives who, for instance, attacked Republican leaders during the spring Continuing Resolution battles.

Key Democrats, including Senate Majority Leader Reid and Senator Schumer, are signaling that they are open to Leader McConnell’s idea. It is unlikely they would be doing so without at least a private nod from the White House.

Megan McArdle argues that the Democrats had the whip hand in these negotiations because America has become so addicted to saving that any attempts to force a Cold Turkey solution on the economy would have led to a “lose-lose” catastrophe with the Democrats taking a lot of blame for the withdrawal but the Republicans taking even more. Essentially the McConnell gambit will leave the dope, syringe and fixings on the table and let the President mainline the financial cocaine in front of everybody. That was going to happen anyway, McArdle seems to argue, and now the GOP has stopped pretending it wasn’t.

But McConnell’s strategem swaps conflict avoidance in the short term for inevitable strategic armaggedon is the longer term. The problem with leaving the dope on the table is that the public addiction to government money can only get worse as time goes by. If the habit can’t be kicked in 2011, why in 2012? Why in 2013? Will not the electorate be reduced to the state of a pitiful crack w***e simpering at the feet of a monstrously empowered President? Sooner or later the fatal moment comes.

That shifts directly to the counter-argument that the McConnell gambit inevitably leads to an oblique gambit where has no choice but to be sucked into the refused flank. If he wants the money he has to stick his hands into the monkey trap. According to this scenario, the time to snap the trap shut isn’t just now but some time in 2012. Meanwhile the best the GOP can do is pull the President forward into the killing ground. But that assumes they’ll have the nerve to spring the trap on Der Tag.

It’s a truism that you have to be willing to die to destroy the opponent. So far the GOP has shown a distinct disinclination to mortal risk. There’s no a priori way to tell whether or not the McConnel strategy will work for the Republicans. If it backfires, the Republicans will have given away the store to Barack Obama. If it works, Barack Obama will be like a mastodon in the La Brea tarpits by this time next year. Toast on tar. A political system used to kicking the can down the road has done it again.

About all one can say with certainty is that road is running out. In a few short months the iron dice will roll beyond anyone’s ability to suspend the game. The ante has been upped. All that means is that when the card is finally turned, it will be winner take all.