Today’s Republican Party is different. McCarthy, following in Donald Trump’s footsteps, declared Social Security and Medicare and military spending sacrosanct. Republicans made no serious move to repeal Obamacare or slash Medicaid. They have confined themselves mostly to proposing cuts to nondefense discretionary spending — which accounts for only about a sixth of annual federal spending and is the part of the budget that is already projected to shrink in the coming years.
There is no obvious question about the country’s fiscal future that the Republican Party’s current policies propose an answer to. If you are worried about future deficits or the size of government and you don’t want to raise taxes, then you have to cut Social Security, Medicare and other health programs and military spending. But Republicans don’t want to do any of that.
When will Democrats wise up on the debt ceiling? In 2010 and 2011, the Obama administration negotiated over the debt ceiling in part because it wanted a debt deal. The administration had pivoted to austerity — wrongly, in my view — and it used the debt ceiling to trade with Republicans for policies, like defense cuts, it supported but couldn’t get any other way.
Biden’s position, at least rhetorically, was different. He swore he would never negotiate over the debt ceiling. But then he did exactly that. This deal is built out of Republican policy demands. It’s not a terrible deal, in the sense that the concessions are small. But what Biden and the Democrats got out of this was a debt ceiling increase. There was no attempt, as there was in the Obama administration’s negotiations, to find a bipartisan deal that achieved major administration aims.
Which is all to say that Biden proved something that Democrats should already have known. As long as the debt ceiling exists, there is no way to avoid negotiating over the debt ceiling. The various workarounds that have been proposed — the 14th Amendment, minting a multitrillion-dollar platinum coin, “premium bonds” — carry too much legal and market risk. The way to get rid of the debt ceiling is to get rid of the debt ceiling. Democrats should have done that when they held power in 2021 and 2022. They should prioritize it when they next get a chance.
Are bipartisan debt deals dead? Defenders of the debt ceiling will tell you that it’s often the forcing mechanism for bipartisan debt deals, and as such, does more good than harm. I suspect those days are over. Debt ceiling negotiations have become structurally unbalanced in a way that will make larger debt deals impossible.
Republicans see raising the debt ceiling as the main concession they’re offering Democrats. Because of that, they have no reason to bargain over a balanced policy package in which Democratic priorities, like tax increases, are part of the deal.