By Philip Klein
Thursday, February 02, 2023
In February 2018, a budget deal sailed through the Republican-controlled House and Republican-controlled Senate before being enthusiastically signed into law by President Trump. Not only did the pact suspend the debt ceiling, but it eroded the spending restraints that had been the crowning achievement of the Tea Party era and the legacy of the 2011 debt-ceiling fight.
Then–House speaker Paul Ryan, who rose to fame warning of the devastating consequences of the nation’s unsustainable fiscal path, hailed the “bipartisan compromise” as a “great victory” for members of the military, while Trump tweeted that “Republicans and Democrats must support our troops and support this Bill!” Representative Kevin McCarthy also backed the 2018 deal, praising its increase in military spending, the boost in money for disaster relief, and the “funding to address domestic challenges from the opioid crisis and rare diseases to reform at the Veterans Administration and fixing our crumbling infrastructure.”
Five years later, Republicans control neither the Senate nor the presidency, but they promise to take advantage of their narrow House majority to demand spending concessions in exchange for passing a debt-ceiling increase. McCarthy, who agreed to make a fuss about the debt limit to secure his speakership, is now talking solemnly about the federal debt that Republicans allowed to explode during the Trump era — even before Biden added to it. In a recent press conference, he spoke about how it would be irresponsible to raise the debt limit without confronting the underlying federal-debt problem, which he called “the greatest threat to this nation.”
As Washington gears up for another protracted battle over the debt ceiling, the question conservatives should be asking of Republicans is: Do they actually care about lowering the federal debt, or do they just want to fight?
These are very distinct things. Recent decades offer plenty of examples of Republicans’ gaining partial power in Washington and using maximum leverage to pick dramatic fights over federal-spending levels. Yet the epilogue of those battles has involved Republicans’ gaining full control of Washington and embracing higher spending.
In 1994, Republicans were swept into power in a small-government wave propelled by backlash against President Clinton’s push for national health care, delivering them control of both chambers of Congress for the first time in 40 years. Initially, then–House speaker Newt Gingrich put up a big fight about spending, triggering a standoff that led to two government shutdowns. But by the time George W. Bush was elected, the desire to contain spending had waned.
Bush ran as a “compassionate conservative,” and even though Republicans enjoyed full control over Washington for most of his first six years in office (besides the 18-month period when Jim Jeffords’s party switch gave Democrats temporary control of the Senate), Republicans used their power to expand government. Bush was not able to reform Social Security to allow people to divert a portion of their contributions into personal accounts, but he did succeed in passing the largest expansion of entitlements since the Great Society, in the form of the Medicare prescription-drug plan. Spending soared.
By the end of the Bush era, conservatives had become disillusioned with big-government Republicans — a sentiment that grew with the Wall Street bailout just before Bush left office and sprouted wings early in Barack Obama’s presidency. The Tea Party took off from opposition to Obamacare and alarm over the ballooning national debt.
During the Tea Party era, Republicans were willing to pick big fights and grab third rails. They took the debt ceiling to the brink, eventually forcing Obama to accept what in theory was supposed to be $2.4 trillion in spending cuts as the price of raising the limit. As chairman of the Budget Committee, Ryan released a sweeping plan to overhaul Medicare and Medicaid and put the nation on a sustainable fiscal trajectory — and it actually passed the House. Republicans also made an ill-fated attempt to defund Obamacare in 2013 despite controlling only one-half of the legislative branch. They also passed dozens of bills repealing part or most of Obamacare.
When Trump took over the Republican Party, his supporters said it was because “he fights.” But his populist brand of fighting eschewed entitlement reform and fiscal restraint. He did not achieve spending cuts or enact reforms to offset his policies that added to deficits, which included cutting taxes and increasing the military budget. Republicans went along.
Trump’s presidency reversed any gains made during the Tea Party era. This is true even if you look at his record only up until 2019 and don’t include the trillions of dollars in spending passed in response to the Covid pandemic during the last year of his presidency. In January 2012, after several high-profile battles between Obama and the Republican House, the Congressional Budget Office projected that the annual deficit would be down to $258 billion by 2019. By January 2017, the month Trump was sworn into office, the projection had swollen to $601 billion. The actual 2019 deficit, after two years of unified Republican control of Washington, turned out to be nearly $1 trillion.
It isn’t fair to pin everything on Trump. Republicans were more than merely complicit. For example, Trump was perfectly willing to sign any piece of legislation that could plausibly be said to repeal Obamacare — and yet Republicans caved, despite having vowed to repeal the law for four straight election cycles, having shut down the government in an attempt to defund it, and then having repeatedly voted to repeal the law only when a Democratic-controlled Senate or Obama’s veto pen was around to block them. When they had a chance to really do something about Obamacare, Republicans left intact the central aspects of the law (its regulations, Medicaid expansion, and health-insurance subsidies).
So, in this year’s confrontation over the debt ceiling, it is reasonable to ask what Republicans want other than a fight. It is clear that the current fiscal course is unsustainable — debt relative to the size of the economy is at its highest level since World War II and on track to smash that record by the end of the decade. But it’s hard to take House Republicans at face value. In 2011, Republicans held their ground for months and unnerved financial markets only to squander their hard-fought gains once they had real power. This time, Republicans have an even slimmer majority and will have a harder time extracting concessions from Democrats, who still feel stung from the last major debt-ceiling showdown and have little appetite for negotiation.
Statements from House Republicans so far have included lots of tough talk about taking a stand but very little in plausible long-term strategy to meet the nation’s very real fiscal challenges. In the absence of a plan, refusing to raise the debt limit indefinitely will only exacerbate the problem by risking default or, short of that, a rise in interest rates. This would increase the amount that the federal government would have to spend purely on servicing its debt, before a penny is spent on other priorities.
Representative Jim Banks is a perfect example of why it is difficult to view House Republicans as sincere. He voted for the 2018 budget agreement, citing the increase in military spending — even though securing that increase meant suspending the debt ceiling and blowing up the Tea Party–era caps that had also limited nondefense spending. Now he is running for Senate in Indiana as a conservative warrior (he contrasted himself with “spineless Republicans” in his campaign-launch video) and is fully on board with using the need to raise the debt ceiling as leverage to extract spending cuts.
In a recent interview with CBS, Banks invoked his three daughters to make a passionate case that lawmakers couldn’t continue to do what they were doing and transfer more debt to future generations. “We have a duty to use that majority that the American people gave us to address real spending reforms,” he said. He added, “The debt limit sets up an opportunity for us to have a serious conversation.” Yet without missing a beat he then claimed to speak for a “vast majority” of Republicans and stipulated: “I don’t think any of us want to touch Social Security, Medicare, Medicaid — programs that seniors and others are relying on today or who will soon rely on those programs. There’s an adamant push as much as I’ve ever seen in the Republican Party not to touch those programs.”
There is simply no way to achieve “real spending reform” or have a “serious conversation” about it while remaining “adamant” about not touching the three biggest entitlement programs. In 2023, the CBO projects, the U.S. government will collect $4.9 trillion of revenue. Medicare, Medicaid, and Social Security alone absorb $2.8 trillion of that — well over half. If you add in $795 billion in defense spending (which most Republicans are reluctant to cut) and $442 billion in interest payments (which won’t be significantly reduced until there are substantial reductions to the overall debt), then about 82 percent of federal revenue is already spoken for.
Failure to contain the growth of entitlements makes the math much more daunting over time. Let’s assume that Republicans wanted to balance the budget over the next decade. In 2032, the three off-limits programs (Medicare, Medicaid, and Social Security) are projected to absorb more than two-thirds of tax revenue, thanks to rising health-care costs and an ageing population. Unless something else drastically changes, by 2032 lawmakers could eliminate the entire federal budget save for Medicare, Medicaid, Social Security, defense, and interest payments — and still run a deficit of about $100 billion.
Banks is far from alone in his unseriousness. As reported by Politico, Trump recorded a video message in which he urged that “under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security.” He added, “Cut waste, fraud, and abuse everywhere that we can find it and there is plenty, there’s plenty of it.” In an appearance on Donald Trump Jr.’s podcast, McCarthy agreed with this sentiment, declaring, “We won’t touch Medicare or Social Security.” He reiterated in an appearance on Face the Nation that cuts for those programs will be “off the table,” while making a vague reference to “strengthening Medicare and Social Security.”
It’s quite easy for a group of House Republicans to beat their chests about the debt limit and go home to their safe districts and boast that they’ve fought Biden and the weak-kneed Republican establishment. They do this in the knowledge that at some point an actual crisis will be averted because a bipartisan deal is cobbled together that allows them to portray the Republicans who voted for it as gutless. But the cowardly approach to governing is actually theirs. If they had actual political courage, they would level with voters about the fiscal crisis the nation will face unless lawmakers overhaul Medicare, Medicaid, and Social Security.
Conservative policy failures over the last several decades are the results of an asynchrony between when Republicans have power and when they are willing to fight. They tend to be willing to fight when their power to realize change is limited, only to back off when they have the power to achieve their supposed ambitions. To succeed, they will have to reverse this tendency. Republicans should approach the next two years with a healthy perspective on the limitations of controlling only one-half of the legislative branch, and by a narrow margin, but they should also plan for huge confrontation once they have the power to make real change.
Specifically, what this would mean is using their House majority to make sure any new legislative proposals from Biden and the Democrats are dead on arrival. Instead of engaging in a counterproductive fight over the debt ceiling, they should release their own budget and use the standard government-funding process to fight for lower spending levels than those proposed by Biden and Senate Democrats. And in the meantime they should speak honestly about the threat posed by the growth of entitlement programs and rising health-care costs. They should build consensus among themselves about how to reform Medicare, Medicaid, and Social Security — and how to reform the nation’s broken, government-dominated health-care system. And then, if they are back in control of the Senate and the White House, they should fight like hell.
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