Members-Only Article
We’ve been waiting to hear what secret agreements now-Speaker Kevin McCarthy had to make with the Freedom Caucus to become speaker. Yesterday we learned one key condition. McCarthy agreed to pursue something called “prioritization” as part of their plan to push debt default later this year. On its face, prioritization is a scheme by which the U.S. government will simply stop doing various functions — food and safety, Medicaid, roads, school lunches, air traffic control, border security — to prioritize only debt interest payments and likely Social Security and the military. In other words, there’s no need to default on the debt, the argument goes. You basically just default on the U.S. government.
In addition to the reality of having a big chunk of economy shut down because the U.S. government stops functioning, there’s a basic problem with this “plan.” We’ve been through this idea back in 2011. The U.S. government isn’t equipped technologically to pay some bills and not others on the fly. The U.S. government makes millions of payments every day. It also probably wouldn’t avoid the kind of financial crisis that full default would. And finally, this would only happen if the Senate passed such a “prioritization” bill and President Biden signed it. Obviously those things aren’t going to happen.
This gets us to the real gist of the matter. The Post calls this an “emergency plan for breaching the debt limit.” But it’s not. It can’t work. It couldn’t pass into law even if it could work. This isn’t actually a plan to avoid default. It’s a messaging plan aimed at being able to blame the White House for the federal debt default and the ensuing financial crisis after it happens. House Republicans want to be able to say, we offered this prioritization plan and you rejected it so obviously this is on you.
The real import of this revelation is that it shows how serious House Republicans are not simply about threatening a U.S. debt default but actually forcing a default. That’s the real story. They got McCarthy to agree to put in place the plan, really a messaging plan, that assumes they will force the country to default on its debts later this year.
