Republicans are failing at debt ceiling hostage taking

The deadline is looming for the debt ceiling to be raised to avoid the US government going into some sort of default, never a good thing. The early deadlines have already passed with some accounting devices being used to avoid default so far but June 4th is said to be the final deadline for getting the ceiling raised.

Republicans in the House of Representatives, ostensibly led by speaker Kevin McCarthy but actually by the nutter caucus of the party, have demanded that Joe Biden agree to negotiations on spending cuts before they will raise the ceiling. But Biden has said that while he is willing to negotiate on the budget, he will not do so as part of the debt ceiling. Biden has released his own budget and asked the Republicans to do the same before any negotiations can begin but so far they have not been able to come up with a budget that will satisfy the disparate elements of their caucus, especially the nutters who are now so dominant.

The problem for Republicans is that many of the programs they want to cut are those that the public wants to preserve.

In the federal budget standoff, the majority of U.S. adults are asking lawmakers to pull off the impossible: Cut the overall size of government, but also devote more money to the most popular and expensive programs.
Six in 10 U.S. adults say the government spends too much money. But majorities also favor more funding for infrastructure, health care and Social Security — the kind of commitments that would make efforts to shrink the government unworkable and politically risky ahead of the 2024 elections.

Biden this month proposed a budget that would trim deficits by nearly $3 trillion over 10 years, but his plan contains a mix of tax increases on the wealthy and new spending that led GOP lawmakers to declare it dead on arrival. House Speaker Kevin McCarthy, R-Calif., is insisting on budget talks with the White House but has not produced a plan of his own to cut deficits, which Biden has said is a prerequisite for negotiations.

Roughly 6 in 10 adults say the government is spending too little on education, health care, infrastructure and Social Security, as well as assistance to the poor and Medicare. About half say government is spending too little on border security, child care assistance, drug rehabilitation, the environment and law enforcement.

Kevin Drum also points to polls that show that Americans are pretty satisfied with the current spending priorities, and sums up the general sentiment.

Overall, the primary message of this poll, and others like it, is that status quo bias is strong. The American public has consistently said that:

  • They don’t want to cut anything serious and are willing to increase spending a bit for only a few things.
  • They don’t like big deficits.
  • They want to close the deficit by increasing taxes on rich people.

Jonathan Chait says that Republicans are failing at hostage taking 101.

Republicans are responding to this failure by publicly begging Biden to negotiate with them, even without passing a plan of their own. But that is not how it works.

Biden has a proposal to lift the debt ceiling. His plan: vote to lift the debt ceiling.

Republicans reject that plan. They say they won’t lift the debt ceiling without also cutting spending. Biden’s response, quite naturally, is, Okay, what spending cuts are you demanding in return for lifting the debt ceiling?

Republicans have spent most of the year trying to come up with a set of spending cuts they will demand. They are obviously failing. So now they are asking Biden to negotiate even without a counteroffer.

“Why do we have to have a budget out to sit down and talk about the debt ceiling?” Speaker Kevin McCarthy pleaded at the House Republican retreat last week. Arrington told the Journal that Republicans “want to start talks immediately on a shorter list of demands for this year, without a formal budget in hand.”

But Biden has no incentive to agree to concessions if Republicans can’t even demonstrate those concessions would pass the House.

Biden has publicly stated he won’t pay a ransom in return for lifting the debt ceiling.

Republicans are insisting on getting a ransom anyway, but they don’t seem to understand the basic constituent elements of a hostage-taking scheme. They are as follows:

1. Take a hostage
2. Promise to release the hostage in return for specified concessions
3. Threaten to kill the hostage if the demands aren’t met

Republicans are doing Nos. 1 and 3, but they are skipping the crucial second step in the process. And, of course, both sides understand Biden is going to reject the demand and insist the hostage be released. But we can’t get to that step in the process until Republicans name some demands. Begging Biden to meet with them and help them come up with demands isn’t how this process works. He isn’t going to put demands of his own on the table, because he doesn’t agree with them in the first place.

For budget policy wonks, the Congressional Budget Office provides budget charts that provide the historical, current, and projected budget figures.


  1. JM says

    It isn’t by accident that the Republicans have skipped producing their own budget. The party leaders know full well that their position is impossible to sell to the public. Heck, it’s so illogical about tax cuts and the programs cuts so unpopular that it probably can’t be sold to the Republican party if stated clearly. They want to cut taxes on the wealthy and corporations then pay for it by cutting popular government programs plus increase spending on military and a few other programs that transfer a lot of money to companies. The only way that works is to get Biden to negotiate first, produce a plan that Democrats and Republican agree to and then claim it’s the only viable position.
    The Republicans need to be able to go to the press and claim that the unpopular cuts had to be done to get the budget under control and reducing tax was necessary to get the economy going, and everybody in Congress has already agreed to this position so the public really just has to accept the wisdom of those in Congress. With the really ugly parts hidden in the thousand pages+ of the budget. The Democrats, having already agreed to this budget, can’t come out and say it’s a bad idea, the worst they can say is that it was a comprise to get it past the Republicans.

  2. sonofrojblake says

    the majority of U.S. adults are asking lawmakers to pull off the impossible: Cut the overall size of government, but also devote more money to the most popular and expensive programs

    And it never occurs to anyone to think “maybe life would be cheaper if we didn’t require ourselves to be equipped with enough “defence” capability to simultaneously fight a land war in Asia AND Africa while maintaining bases in half the countries of the world.”

  3. says

    I wish economists did a better job of explaining modern monetary policy theory, instead of letting certain bands of idiots get away with debunked supply-side theories. Giving the rich tax breaks creates jobs, but mostly shitty jobs of the sort nobody wants -- polishing some guy’s lamborghini or mowing their lawn. What stimulates job creation? Starting businesses in any and all sectors. Not giving tax breaks to foreign businesses that will produce products locally but export the profits, which seems to be another favorite feature of republican economics.
    Well, you sure can see one advantage of having an ignorant electorate.

  4. ardipithecus says

    There is only one thing that creates jobs: People with a desire for something they don’t have and the means to pay for it.

    It doesn’t matter how much investment there is if people don’t have a means to pay for the product or service.

    Tax breaks for the wealthy don’t create jobs, they encourage hoarding. The vast majority of surplus income goes into tax havens or investments that only create wealth for the already wealthy such as derivatives. Increasing their wealth via tax breaks only increases the hoard. Less than 1% of investment in the US goes into things that create jobs. The wealthy already have vastly more available for investments that grow prosperity than they are willing to put to good purpose.

  5. flex says

    Some things which would also create jobs which republicans are against:

    Fully-funded education -- educated people are more likely to innovate and/or start businesses. Educated people also make better and more efficient workers, able to spot problems and improve quality as well as suggest improvements.
    Universal health care -- reduces business risk and encourages people to start businesses.
    Infrastructure improvements -- better roads means cheaper transport means more profit means more workers means more jobs.
    Uniform justice -- when big corporations or the wealthy are unable to bully smaller companies or individuals into giving up their ideas and rights, more people will be willing to risk starting a business.

    All those suggestions to grow an economy were suggested by Adam Smith in The Wealth of Nations

  6. jrkrideau says

    debt ceiling
    Oh it’s that time in the US election cycle. Interesting how these quaint native customs persist.

    I think I’ll go back to the shocking news that Megan may not attend Charles’s coronation.

  7. Pierce R. Butler says

    The whole debt-ceiling hostage ploy always befuddles my little mind.

    That sort of thing seriously threatens Wall Street and the entire financial sector, the CEOs of which surely have the personal numbers of all major Republican leaders on speed-dial. What do they get from these games of chicken that lets them even tolerate the uncertainty and associated costs & risks that go with them?

  8. jenorafeuer says

    @Pierce R. Butler:
    Presumably they get the expectation that this will always end the way they want it because the Democrats care about actually governing (even if not necessarily doing it well) while large swaths of the Republican party absolutely will start throwing bombs because they don’t believe they’ll actually be hurt by them.

  9. Pierce R. Butler says

    jenorafeuer @ # 8 -- Still seems like a high-risk gamble, by people who otherwise always only bet on rigged games.

  10. GerrardOfTitanServer says

    The debt ceiling fiasco is the responsibility of both parties. It exists because they decided that they must pass a budget resolution each year to avoid a government shutdown. That’s a choice that they made. Instead, they could have made the choice of passing a budget law that includes a provision which says “and if congress fails to pass another budget next year, then this budget shall continue indefinitely until such time that a new budget is passed”.

    PS: I know that the constitution requires a budget at least every 2 years for the military. Fine. They can have a showdown for military shutdowns (ha!) instead of total government shutdowns.

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