Americans may never know all of the details about the assorted side deals Kevin McCarthy struck to become House speaker, but The Washington Post reported over the weekend on one of the more dangerous promises the Republican agreed to with some of his far-right members.
House Republicans are preparing a plan telling the Treasury Department what to do if Congress and the White House don’t agree to lift the nation’s debt limit later this year, underscoring the brinkmanship newly empowered conservatives will bring to the high-stakes negotiations over averting a U.S. default, according to six people aware of the internal discussions.
According to the report, which has not been independently verified by MSNBC or NBC News, McCarthy reached a “private deal” on this debt-ceiling plan as part of the negotiations that allowed him to gain the speaker’s gavel.
And the closer one looks at the details of the plan, the more ridiculous it becomes. From the Post’s report:
In the preliminary stages of being drafted, the GOP proposal would call on the Biden administration to make only the most critical federal payments if the Treasury Department comes up against the statutory limit on what it can legally borrow. For instance, the plan is almost certain to call on the department to keep making interest payments on the debt, according to four people familiar with the internal deliberations who spoke on the condition of anonymity to describe private conversations. House Republicans’ payment prioritization plan may also stipulate that the Treasury Department should continue making payments on Social Security, Medicare and veterans benefits, as well as funding the military, two of the people said.
I can appreciate why such talk about budgetary policy might make some readers’ eyes glaze over, so let’s take a step back and provide some additional context.
The whole point of raising the debt ceiling is to do precisely one thing: allow the United States to pay its bills. That’s it. That’s why this has to happen. Republicans are preparing a hostage crisis in which GOP lawmakers will only allow the United States to pay its bills if Democrats agree to a series of demands set out by Republican leaders.
If Democrats refuse to go along with the extortion scheme, the U.S. government will default on its obligations for the first time, creating economic chaos.
What the Post’s report is describing is some kind of prioritization scheme: Republicans are prepared to tell the Treasury Department, in effect, “If we refuse to do our jobs, you won’t be able to pay all of the nation’s bills, but you will still be able to pay some of the nation’s bills, so you should first pay for Social Security, Medicare, veterans benefits, the military, and interest on the national debt.”
The first reason this is stark raving mad is that the Treasury Department would be under no obligation to follow such instructions, since the plan would have no force of law. It would represent little more than a suggestion from the hostage takers about what they’d like to see happen after they shoot their hostage.
The second reason this is stark raving mad is that it would create an obvious political nightmare for the Republicans who support such an approach. As the Post explained, “A hypothetical proposal that protects Social Security, Medicare, veterans benefits and the military would still leave out huge swaths of critical federal expenditures on things such as Medicaid, food safety inspections, border control and air traffic control, to name just a handful of thousands of programs. Democrats are also likely to accuse Republicans of prioritizing payments to U.S. bondholders — which include Chinese banks — over American citizens.”
The article quoted a senior Democratic aide who said, “Any plan to pay bondholders but not fund school lunches or the FAA or food safety or XYZ is just target practice for us.”
The third reason this is stark raving mad is that it can’t happen. I don’t mean that in a figurative sense; I mean the idea literally cannot work.
We know this for certain because we’ve been down this road before: When Tea Party Republicans helped create the first debt ceiling crisis 12 years ago, there was similar talk about “partial” default and “debt prioritization” schemes in which the country would pay some bills while ignoring others.
What we learned at the time — or rather, what some of us who are not currently in the House Republican conference learned at the time — is that our government simply doesn’t have the mechanisms to execute such a plan.
As Politico noted, “Besides the obvious political headaches, debt prioritization poses some practical complications, as well. When the notion was floated a decade ago, the Obama Administration argued that such a plan was unworkable given that government computers automatically make millions of payments every day.”
And finally, the fourth reason this is stark raving mad is that even if the Treasury Department were to take the GOP’s suggestion seriously, it wouldn’t prevent the dire economic consequences: Republicans would still cause a crash.
So, the bad news is the new House GOP majority has apparently come up with one of the worst ideas in the history of bad ideas, and the new House speaker privately promised to pursue it. The worst news is that the radicalized Republican Party is so serious about its hostage crisis that it’s already working on plans related to the plot.
The nation will hit the debt ceiling on Thursday, and congressional action will be necessary by early June. Watch this space.