The Virtues of a Bipartisan Deal

If it happens, it would be good for the country

In my past two blogs on the debt limit, I have argued against President Biden opening debt-limit negotiations with Kevin McCarthy and predicted that such negotiations would be unsuccessful. However, Biden did open such negotiations and serious talks are now underway, so there is a possibility that I was wrong on both of these points.  

At this stage, if a bipartisan deal could be reached, it would, on balance, be best for the country.  I am rooting for it even though I still think this result is unlikely and would set a bad and damaging precedent for the future.

I come to this position reluctantly. 

I argued that Biden should stiff McCarthy on negotiations because doing so would reward the GOP for irresponsibly threatening the country with a catastrophic default in order to leverage policy victories out of proportion to the amount of political power the GOP gained in the 2022 election. If there is a bipartisan deal, that tactic will have been ratified, and it will become a permanent feature of American politics. And this budget negotiation framework will be very unfair to progressives who will find it difficult to use this tactic to their advantage.

But my strategy of calling McCarthy’s bluff on the debt limit only works if it is indeed a bluff and there is a credible alternative to default. Both of these might not be true.

There are now a sufficient number of anti-government nihilists in the GOP who appear to be willing to crash the US economy rather than authorize sufficient debt to fund the gap between legally sanctioned spending and taxation. Russian roulette is a dangerous game to play with people crazy enough to pull the trigger.

The only credible alternative Biden would have if Congress does not lift the debt limit would be to instruct the Treasury to ignore the law, as I discussed Monday, based on the constitutional duty to “faithfully execute” all the other spending, taxation, and debt-servicing laws passed by Congress. I can understand, however, why Biden would not want to place all his chips on this unproven, novel constitutional theory. Having served as a lawmaker for 36 years, Biden, in my view, would be uncomfortable with the concept of a president knowingly violating a law. He could also suffer an embarrassing defeat in the courts or the bond market might react poorly, sending a shock through the economy. All of this would be happening on his watch as president and while he is running for a second term. A big part of Biden’s appeal is that he is a steady hand guiding the country through turbulent times. The risky endeavor of ignoring the debt-limit law is counter to that persona.  And it would be difficult to explain why he didn’t at least try to cut a deal with the House, especially when the House did actually pass a debt limit extension, albeit with highly unreasonable conditions. 

In the end, it is a lot easier for armchair pundits to bark out pie-in-the-sky strategies than for those who hold positions of responsibility, and are accountable to voters, to put them into effect.  

That said, I will believe a bipartisan deal that can pass both the House and Senate is possible when I see it. Just as McCarthy will only bring a deal to his caucus if he has 95% of his members behind it, Biden can’t politically agree to a deal unless he has 40 or so Democratic votes in Senate. To do otherwise would alienate his own political base that he needs to fuel his reelection bid. I frankly do not see these two circles in a Venn diagram overlapping.  McCarthy would need to twist a lot of arms of his caucus-members very hard to get them to agree to anything Biden could possibly sign. I know he has gained strength as a leader since January, but this would be the first law with real world consequence he would be asking his members to vote for. Anything Biden could sign and would muster 60 votes in the Senate is going to fall far short of the aspirations these members articulated during the speakership battle.  And there is the agent of chaos and destruction -- one Donald J. Trump -- looming in the background to squelch any deal that does not advance his political interests. There is a long way to go from “serious talks” to a signing ceremony.

But let’s say for a moment that such a compromise is achievable.

Substantively, it would most likely include a debt limit extension until after the 2024 election and spending caps for the next two years that are lower than what Democrats would want. Those spending caps, however, are the inevitable result of having lost the House in 2022 and ultimately will have to be negotiated to keep the government running after September 30, 2023 anyway.  Unspent COVID spending would be clawed back. The GOP would get some policy victories – perhaps some of the noxious work requirements on Medicaid and food stamps upon which they are insisting. I believe in health care as a right of citizenship and that no one should go hungry in a wealthy country such as ours – so this would be a horrible result, but hardly unprecedented in U.S. politics. Democrats would use these issues and the other spending cuts that the GOP is advocating for on veteran’s benefits, public safety, and transportation as election issues. To stave off even worse results, they would argue, you need to elect us to the House in 2024. In the end, elections matter, and the poor would be the victims of the Democrats losing the House.d The deal ought to have some sweeteners for Democrats too; if it doesn’t, this is evidence of really bad negotiating by the Biden team.

Would I be happy with this result? No. But would I vote for it if I were a member of Congress? Probably.

Putting aside the substance, a bipartisan deal on something as important as this would be salutary for the country. Our politics has been unpleasant and bitterly divisive since the debate over Obamacare in 2009 with almost all major legislation jammed through on a 100% partisan basis (emergency pandemic funding is the major exception to this).  Biden’s infrastructure and CHIPS bills were passed with some Republican support, but over the objections of the GOP right flank. 

A Biden-McCarthy deal would be different. In an era defined by “negative partisanship” – that is, the idea that you must oppose anything favored by your opponent – a coming together on a two-year fiscal plan that kept the government running, avoided default, and lowered the deficit would be a substantial achievement. Of course, politicians would continue to demonize their opponents, but it is harder to do, and rings even more hollow, if you have just reached an agreement on something so important that you were willing to put the country into default to achieve.

Bipartisan deals make almost no one completely happy, but they are the stuff of normal politics in a country that has seen very little normalcy of late. We will still be a highly politically polarized country after such a deal is enacted, but maybe a smidge less harsh and bitter.  That might be the best we can do these days.

I continue to believe a Biden-McCarthy signing ceremony in early June is unlikely, but it wouldn’t be a bad result.