The Congressional Democratic leadership, in its never-ending quest to Get Something Done, has reportedly reached a deal with the Trump administration and its Republican counterparts on a budget. In doing so, Nancy Pelosi—the Speaker of the House, and the lead negotiator opposite Treasury Secretary Steven Mnuchin—both missed a golden opportunity to kill the debt ceiling once and for all, and kicked the can down the road just long enough to potentially allow Republicans to destroy the agenda of the next Democratic president.
Trump, of course, gloated about this:
The deal, according to the New York Times, calls for $320 billion in spending above existing debt ceiling caps, which would ensure that we don’t have to deal with this for the next two years. The deal also still has to pass Congress, and House Republicans are already making noise. But before we get into that, though, a brief explanation of what the debt ceiling is: an arbitrary number for the maximum national debt set by Congress that, if reached without a concurrent rise in the spending limit, could eventually result in the United States defaulting on its debts and bringing the entirety of the world economy down with it. Yes, you’re right: this does sound incredibly fucking stupid.
If you recall 50 years ago when Barack Obama was president, when the Republicans held the House and nothing else—a mirror image of what we have today—the GOP was able to shut down the government not once but twice over the debt ceiling. They did this not in a time of a booming economy, but in the middle of the Great Recession, when the U.S. defaulting on its debts would have surely snowballed into the worst economic crisis the world has ever seen.
Their reason, the second time, was because they wanted to kill Obamacare before it got off the ground. And while public opinion showed a clear pattern that Americans blamed Republicans more than Obama for the shutdown, it ultimately didn’t hurt them one bit in 2014, when they captured the Senate and effectively ensured that Obama’s legislative agenda was good and dead.
Shifting back to the present day: a Democratic source close to the talks said that while the possibility of ending the debt ceiling came up and “interest was expressed,” it was decided that it was “too difficult” to do in this particular agreement. In the end, the agreement was to raise the debt ceiling until the end of July 2021. Given the “extraordinary measures” that the Treasury is able to take to keep the government running without a rise in the debt limit, the point of default would likely come at the end of 2021 or 2022 if Congress isn’t able to raise the limit again.
Either way, the point where the debt ceiling would be breached, according to Mnuchin, wouldn’t have been until September. Would it have been unpopular to demand an end to the debt ceiling as terms for raising it now? Maybe. But it was, and still remains, the responsible thing to do—the American (and world) economy shouldn’t rest on the ability of Congress and the president to get together every year or couple of years and pull a random big number out of a hat.
And to reiterate: if the eventual Democratic presidential nominee defeats Trump in 2020, this will be one of the things they have to deal with in their first year in office. If you really listen, you can almost hear Ted Cruz yelling on the floor of the Senate that Congress shouldn’t raise the debt limit by one more dollar unless President Bernie Sanders promises to drop his demand for Medicare for All—or conversely, unless President Joe Biden promises not to sign a public option with work requirements for people whose names begin with the letter ‘M’. (Candidates are already expressing their fear about exactly this scenario.)
The biggest win of Pelosi’s second stint as Speaker so far was holding the line on the government shutdown earlier this year. So, Pelosi knows how to use leverage; she just didn’t push hard enough this time, for whatever reason. And while she might have saved us an iota of political drama this time around, we’ll be all the worse off for it if it kills the next president’s agenda before it even has a chance to get off the ground.