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The GOP’s march of folly on the debt ceiling

House Republicans' bill is about as subtle as a ransom note tied to a rock thrown through a window

Speaker Kevin McCarthy, R-Calif., and other House Republicans during a March 30 press conference.
Speaker Kevin McCarthy, R-Calif., and other House Republicans during a March 30 press conference. (Tom Williams/CQ Roll Call)

There is no summary of World War I that makes the cataclysmic event seem rational.

But in early August 1914, Germany declared war on Russia and then France; Great Britain entered the conflict when Germany invaded Belgium; and Austria-Hungary was soon fighting France, Britain and Russia.

This march of folly triggered a surge of patriotism all over Europe. The common assumption in every capital was that victory was assured for their side and the war would be over by Christmas.

Instead, more than 8 million soldiers died in the trenches and in the military hospitals over the next four years. An entire generation of young men were decimated, the war wounded were everywhere, much of Europe was impoverished and the seeds were sown for World War II.

We are on the cusp of another march of folly — the U.S. government will be unable to pay all of its bills because of the debt ceiling by the beginning of June or slightly later.

In 2021, Moody’s Analytics estimated the economic effects of a monthlong debt ceiling crisis: Economic output would decline by 4 percent, an estimated 6 million jobs would be lost and the stock market, at its low point, would lose one-third of its value as $15 trillion disappeared into smoke.

Yet House Republicans, in particular, have been seized by the delusional belief that a glorious victory is just around the corner.

Speaker Kevin McCarthy managed to hold his fractious caucus together last week to pass a debt ceiling bill that would grant the government an extra $1.5 trillion in borrowing authority in exchange for severely limiting federal spending over the next decade.

The Republican plan — the ungainly named and comma-filled “Limit, Save, Grow Act” — is about as subtle as a ransom note tied to rock thrown through a window. It would force Democrats into a budgetary straitjacket in exchange for extending the debt ceiling to no later than March 31, 2024.

Nothing is less serious than a proposal that would force the Biden administration to face another debt ceiling crisis just as America enters into presidential election season.

McCarthy has all but conceded that the “Limit, Save, Grow Act” is an opening bid in negotiations with the White House. But there is a right-wing contingent of House Republicans that will not accept anything but total surrender from the Democrats.

Last week, just before the McCarthy plan passed by a two-vote margin, Virginia Republican Bob Good told The Washington Post, “Speaker McCarthy has to convey … to Sen. Schumer and President Biden that this is the deal, and he cannot get to 218 with changes to this deal.”

The underlying message in the cuckoo world of House Republican politics is that any compromise offer by McCarthy will now be seen by the far right as a sellout to the Democrats. As a result, many House Republicans will be paralyzed by fears of a primary challenger who would attack them for attempting to act rationally in the face of impending default.

While Biden soon will be meeting with congressional leaders, including McCarthy, on the debt ceiling, it is hard to see the upside for the president.

Nothing that Biden can offer (short of resignation) could win the approval of a majority of House Republicans. And McCarthy has little incentive to make a workable proposal. So, in essence, Biden would be negotiating with himself.

But the Democrats can easily win the short-term messaging battles and lose the larger war.

At the White House Monday afternoon, Biden called the McCarthy bill an “extreme MAGA plan” that “would cut critical funding from education, public safety … [and] take health care and food assistance away from millions of working families.”

But the inescapable problem for Democrats is that if the intransigent House Republicans force a default by overplaying their hand, the Biden administration (fairly or unfairly) will share in the brickbats.

This is the unalterable truth of politics: The president gets the blame or the credit for everything that happens while he is in the White House.

It would be Biden’s Treasury Department that would have to make the unpalatable decisions about who gets paid if the government (because of the debt ceiling) cannot pay all of its bills.

A failure to pay the full principal and interest on Treasury securities would risk a massive financial collapse. But the political ramifications for the White House might be worse if they instead delayed or only partially paid monthly Social Security benefits.

As the financial abyss draws closer, there will be increasing talk about how the administration could avert the crisis through gimmicks like minting a $1 trillion platinum coin or challenging the constitutionality of all debt ceiling legislation.

The downsides of these approaches are, alas, unavoidable.

There is no guarantee that bondholders would be appeased as the Biden administration’s maneuvers faced court challenges and an uncertain outcome. Such financial gamesmanship might also feed the conspiracy theories that are already poisoning American political discourse.

Optimists retain touching faith that a deal can be cut, perhaps with a combination of House Democrats and most of the 32 Republicans belonging to the bipartisan Problem Solvers Caucus. Perhaps the agreement might combine lifting the debt ceiling with creating a commission to develop long-term approaches to reducing the national debt.

But more likely, just like in the early days of World War I, the House Republicans are going to march off to battle, with flags raised and spirits high, oblivious to the devastation that will follow their impetuous actions.

Walter Shapiro, who has covered every presidential campaign since 1980, is a staff writer for the New Republic and a lecturer in political science at Yale.

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