Get Ready: Republicans Are Flirting With Detonating The Global Economy…Again

A Democrat sits in the White House. Republicans seem well-positioned to take back the House in a midterm election that historically disempowers the President’s party. 

So, like clockwork, Republicans have begun fleshing out their plans for a tried and true tactic: threaten global economic catastrophe in order to extort political concessions from the President. 

This Republican legislative terrorism has become so habitual that it’s just the particulars that change. Each time, GOP members say they won’t vote to raise or suspend the debt ceiling, the amount of money the government is authorized to borrow to meet its financial obligations. If that level is not lifted, the United States will default on its debts, sending shockwaves through the global financial system and triggering an economic crisis. 

In 2011, Tea Party Republicans held the debt limit hostage, ostensibly to extract a deal that would reduce the national debt — except not through tax increases. It was a demand for debt reduction entirely on the Republicans’ terms, through slashing government programs. By 2013, they’d warmed to the tactic but switched out the ransom from narrowly defined debt reduction to the trifling request that then-President Barack Obama defund the Affordable Care Act, his signature legislative achievement.

This time, Republicans are laying out plans to strap a bomb to the U.S. and global economy to demand cuts to Medicare and Social Security, programs that are massively popular particularly with older Americans.

Rather than pursuing these cuts for the two years Republicans had unified control under then-President Donald Trump — under whose administration they suspended the debt ceiling thrice without a fuss — Republicans are preparing to demand them from President Joe Biden. And if he won’t comply? The country’s resulting default on its debt will somehow also be on Biden’s head. 

“If Republicans are trying to cut spending, surely he wouldn’t try to default,” Rep. Jason Smith (R-MO), a contender to chair the House Ways and Means Committee in the case of a Republican flip, told Axios.

Republicans have never pulled the trigger: in the most recent iteration of this hostage-taking last year, Senate Republicans capitulated to a filibuster carveout that allowed Democrats to raise the debt ceiling by themselves. And polls show that Republicans have paid for forcing this kind of government dysfunction.

But they clearly still think it’s a winning strategy, allowing themselves to claim the mantle of “fiscal responsibility” (while holding a lit match to the fuse of financial collapse) while foisting a crisis upon a Democratic administration at the same time. 

As dubious as the GOP politics are, their arguments are worse. Republicans disingenuously link the debt ceiling to future spending — that refusing to raise its level will handcuff the government from wanton spending in the months to come. But that’s not what the debt ceiling is. It’s more akin to paying a credit card bill, making good on money that has already been appropriated.

So Republicans are directly responsible for the debt that they decry, especially due to the Trump tax cuts of 2017 that ballooned deficit spending. The truth is, both parties add to the debt when they’re governing — but only Republicans decide that it’s an unbearable state of affairs, as soon as a President they oppose is wielding power. 

The hollowness of the reasoning and conviction doesn’t dilute the danger. The MAGA-fication of the Republican party only makes these threats scarier, only increases the likelihood that they’ll pull the trigger, consequences be damned. The presumed House Speaker in this scenario, Kevin McCarthy, has shown very little desire or ability to control the most extreme members of his caucus. 

And even feigning like they might pull the trigger has consequences: In 2011, the government lost its triple-A credit rating from Standard & Poor’s, and experts say that it hobbled the country’s economic recovery from the Great Recession. 

As usual, Democrats are called upon to be the adults in the room to avert this Republican-inflicted potential disaster. But even well-intentioned Democrats will fail to defuse the bomb if determined Republicans decide to let it explode. 

There is still a way out. Democrats could unilaterally defang the debt limit, no matter how the midterms go. They could raise it through reconciliation to some mind-numbingly enormous number, ensuring, at the very least, a many years-long buffer. That’s what Denmark, the only other advanced nation still dealing with this arbitrary and dangerous limit, has done. 

Last time the issue arose around this time last fall, various Democratic senators expressed their enthusiasm to remove the debt ceiling from Republicans’ arsenal. But there wasn’t much consensus or energy around actually doing it. Sens. Brian Schatz (D-HI), Chris Coons (D-DE) and Michael Bennet (D-CO) have a bill that would repeal the debt limit altogether, but it would require a filibuster carveout. And for the perhaps more realistic reconciliation tack, Democrats would need to muster the support of Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ), the former of whom in particular often swallows even baseless Republican economic talking points.

If Republicans win the House, they’ll tee up a slate of legislative priorities that Democrats will find unpleasant and enraging: endless hearings to investigate everything from Hunter Biden’s very presence on this Earth to the Afghanistan pullout, dead-on-arrival, red-meaty bills targeting transgender children or banning abortion. They’ve telegraphed plans to impeach Biden — and maybe some Cabinet members to boot. 

But none of those things, most of which could be ultimately stymied either by a Democratic Senate or Biden’s veto, would wreak the universal devastation of the United States defaulting on its debts.