Shut up if you’ve heard it before: Two years after a Democratic president took office and pushed ambitious policies in Congress, Republicans have regained control of the House of Representatives. They don’t have the votes to nullify the president’s gains, but a quirk of US law — which requires a second vote in Congress to authorize borrowing under spending and tax laws already passed — appears to give them the opportunity , to blackmail and threaten to cause a financial crisis if their demands are not met.
However, they have never heard of it before. While there are some similarities to the debt ceiling crisis of 2011, there are also huge differences. The opinion of the elite has changed. The obsession with debt that gripped the very serious people about a dozen years ago is gone. Democrats also appear to be made of a tougher stuff and much more determined to resist blackmail. But the most important difference is that Republicans are not making coherent demands this time. It’s not at all clear what, if anything, they want in exchange for not blowing up the economy. Right now they are blackmailers for no reason.
Some of the reports I’ve seen on debt relief say that Republicans can’t agree on which spending cuts to make. This could give the impression that there are factions in the Republican Party with different priorities. But as far as I know, no influential member is proposing anything that would significantly affect the budget deficit, let alone the balanced budget Kevin McCarthy promised as part of the deal that made him Speaker of the House.
As always, the bottom line in budgeting is that the federal government is essentially an insurance company with an army. Social Security, Medicare, Medicaid, and the military dominate spending, and it’s impossible to do much about deficits unless you raise taxes — which is clearly not in the GOP script — or cut taxes.
In the past, Republicans have attempted to make changes to the programs that form the safety net, which would have resulted in virtually deep cuts. George W. Bush attempted to privatize Social Security. His party was close to reaching an agreement with President Barack Obama that would have lowered the Social Security cost-of-living adjustment and raised the age for access to Medicare. In 2017, Paul Ryan, then Speaker of the House, stated that he had “dreamed” about cutting Medicaid since he was a student.
But the Republican Party has become much more cautious. McCarthy has previously stated that cuts to Social Security and Medicare are “not on the table.” If your party ever gets around to making specific proposals, you’ll find that Medicaid, which still covers more Americans than Medicare, is hugely popular even among Republicans. Political caution isn’t the only reason Republican leaders are reluctant to attack the safety net, either. The base of the party has also lost interest in spending cuts and turned to Kulturkampf. As Nate Cohn recently pointed out, far more Republicans reported hearing about the decision in early 2021 to remove some of Dr.
Inevitably, there are Republicans trying to make the budget a Kulturkampf issue, claiming that enormous sums of money could be saved if waking-related expenses were eliminated. But what costs are you talking about? I’ve tried to find examples of federal spending that Conservatives believe fall into this category, bearing in mind that foundations and right-wing politicians have a strong incentive to find outrageous-sounding big things. The truth is that the results of my search were embarrassing. For example, the spending listed in a Heritage Foundation report talking about “monies for the conscientious” totaled $19 million, less than the federal government spends every two minutes.
So the bottom line of the debt crisis is that there is no bottom line: Republicans denounce overspending, but they don’t know what spending they want to cut. Even if the Democrats were willing to blackmail, which they are not, you can’t pay a blackmailer who doesn’t ask for anything specific. Unfortunately, the hollowness of Republican fiscal stance is no guarantee that we will avoid a debt crisis. If anything, you can make it more likely. Magaland — the land of Make America Great Again — may lack political ideas, but nihilism abounds. Republicans don’t know what policies they want, but what they definitely want is to see Biden fail.
So far, the administration’s strategy seems to have been to lure Republicans out of hiding, force them to propose concrete spending cuts, and then hold them back in the face of public outrage. There are also, I suspect and hope, contingency plans in place to avoid the crisis if that strategy fails. But it’s hard not to worry. It is dangerous when a political party is ready to set fire to everything if it does not prevail; and it is even more dangerous when the party only wants to see how everything burns.
Paul Krugman is a Nobel laureate in economics. © The New York Times, 2023. Translated from news clips
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