Speaker of the House, John Boehner called the play in the huddle. Boehner told all of his House Republican Caucus on a conference call that there will not be a shutdown of the federal government in order to defund The Affordable Care Act, aka ObamaCare. In any normal time, such a direct statement from the Speaker would mean there will not be a shutdown of the federal government in order to defund ObamaCare, but these are not normal times and the question remains: Does the Speaker have enough clout and enough votes to enforce his decision?
Boehner was making a statement designed to signal his resolve but it came amid other statements of resolve to oppose him from several leading Republican senators including Ted Cruz and Marco Rubio, as well as influential organizations like the Club for Growth and Heritage Foundation. And (here is Boehner’s problem) 80 Republican Congressional Representatives signed a letter urging Boehner to use the budget to defund ObamaCare.
We are watching the Republican Party teetering on the brink of a full on civil war as the establishment finally realizes it has to confront and control its Tea Party Wing. There is zero doubt that the establishment Republicans are right that a government shutdown would be disastrous for the GOP, but they may not be able to head off the insurgency before they wreak havoc on what should be routine government actions, potentially spooking financial markets or worse, inflicting real harm on the global economy.
Boehner’s statement to his caucus that he would not use the budget to advance the battle against Obamacare but would instead support fighting to delay its implementation during the debt ceiling negotiation reflects the dawning awareness throughout the Republican establishment that a government shutdown would likely go very badly for their side. There are now dozens of leading Republican voices including Senators John McCain, Richard Burr and Tom Coburn, Newt Gingrich who was Speaker of the House during the 1995-1996 government shutdowns and Karl Rove to name just a few. Most of them are not yet aware that the Republicans would fare even worse in a showdown over the debt limit.
A possible government shutdown will likely end very badly for the GOP but the worst scenario imaginable for Republicans would be for them to be seen as causing a default of the US Treasury, roiling markets and threatening another global economic collapse, only to have to crawl back to the bargaining table to admit that they were not able to get anything in return for ending the stunt.
Either the budget showdown or the debt ceiling fight scenario would not only alienate the independent voters who moved closer to the Democrats in the 2012 election but cannot be counted upon to vote in the non-presidential 2014 congressional election; it would also be demoralizing to base conservatives whose enthusiasm is critical to GOP plan for holding onto the House of Representatives. It is not the taking a stand part that is the problem for the base, it is the nearly inevitable folding with nothing to show for it that would brand these firebrands with the “L” for losers in the eyes of their base. In essence this could make the impossible — the GOP losing control of the House of Representatives in the 2014 election — enter the realm of possibility. Still despite the warnings from established Republican leaders, either of these scenarios seems more likely than less destructive alternatives.
Republicans Have Zero Leverage in the Budget and Debt Limit Negotiations
Democrats in Congress and in the White House can be expected to be, and should be, ruthless in refusing to offer life lines by accepting compromises that would have been progress if the Republicans had agreed to them in 2011 or 2012. Whether the Republicans realize it or not, all of the leverage in the negotiations has shifted to the Democrat’s side in the budget negotiations and especially in any future standoff over the debt ceiling. Here we are defining leverage simply: One side has leverage when it realizes that “no deal” is an unacceptable outcome to the other side.
Generally, leverage is an all or nothing proposition. If you are buying a car or a house but are truly willing to walk out of the showroom or take the offer off of the table, then you have leverage in the negotiation unless the other side is equally willing to see the deal fall through. If either side is unwilling to say, “no deal” they will signal so by making a concession. Usually the side that makes the first concession is the side that is going to make all of the substantive concessions. This is the side with no leverage.
Barack Obama was on this side in the first debt limit fight in 2011. Heading into an election year, the President simply could not accept the major negative shock the economy would suffer if no deal was reached (even if Republicans would take most of the blame) so he created the best deal he could — accepting in turns: deep cuts in spending, the “Super Committee,” and the Sequester — and was roundly criticized from the left for lacking “backbone” in the negotiation. It turns out “backbone” comes with leverage, and is necessary for taking advantage of leverage, but it does not create leverage which is defined by the circumstances facing the other side. In 2011, “no deal” was completely unacceptable to Barack Obama, so he had no leverage on the debt ceiling.
Now we are seeing the postponed day of reckoning approach and Boehner is bargaining for more time, suggesting the debt ceiling could be a better battlefield for a fight. But something important has changed since 2011 and with it a complete shift in the leverage of a debt limit fight. The change is Barack Obama, no longer facing a re-election campaign, may be, and should be, willing to see the Republicans that have blocked his every initiative to strengthen the economy, take the blame for breaking the economy for a second time in less than a decade.
Beyond just listening to the Republicans that are saying so, if you want to understand the degree to which Democrats have gained all the leverage, simply imagine what the world would look like if Republicans fail to allow a vote to increase the debt ceiling, the financial markets are tumbling while the Democrats are united in defending their only major legislative accomplishment in two terms in the majority, ObamaCare. Republicans are divided over whether to make a deal that doesn’t include defunding Obamacare. And with so many Republicans on both sides of the conflict, even Fox News would have to cover this as a split within the Republican Party.
In the current fight over the budget, leverage has been reversed with Republicans holding the weak hand for an important and durable reason. As the Democrats understand and many Republicans have learned since the budget shutdown battles of 1995 and 1996, even if the public bemoans and distrusts government in the abstract as has been shown in numerous public opinion polls, the public strongly supports a lot of the specific things government does. People can agree that “Government is not the solution to our problem, government is the problem” as Ronald Reagan pronounced during his 1981 Inaugural Address, but they want Social Security and Medicare checks processed, and air traffic controllers, food safety inspectors, firefighter, teachers, police and park rangers on the job.
There are 80 Republican Representatives signed on to a letter to Boehner who cannot pass a budget with only Republican votes if he loses 15 votes from his caucus. If Boehner can’t reach the magic number 218, as he has failed to do several times [including his New Years 2013 proposal and more recently the first attempt at a Farm Bill and a failed Transportation Bill] he would then need votes from Nancy Pelosi, and the 2014 budget may come to resemble Barack Obama’s first 2009 budget.