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National Review
National Review
1 May 2023
Yuval Levin


NextImg:The Corner: Reading the Tea Leaves on the Debt Ceiling

On its face, the fight over raising the debt ceiling is now stuck in a pretty confusing place.

President Biden first said he would not negotiate over raising the ceiling, but after he proposed a budget in early March (as required by law) he insisted that he had put a proposal on the table and was just waiting for Republicans to do the same. House Republicans have basically given up on passing a formal budget of their own this year, but last week they passed a bill that wasn’t a budget but would raise the debt ceiling in return for a variety of spending cuts and policy reforms that are unlikely to get any Democratic support. So are the two sides inching toward talks, or are they just posturing past each other?

I’ve been moderately pessimistic about how this process would go, and I still am. But I think most of what we’ve seen so far this year should actually count as modest progress. Here are five reasons to see it that way.

First, Kevin McCarthy looks stronger than he did in January. One key reason why this year’s debt-ceiling fight has looked more dangerous than usual is the narrowness of the Republican majority in the House, which would make it hard for Republican leaders to get enough of their members to support a deal when the time comes. They just lack the maneuvering room and the spare votes to do anything complicated. The way he became speaker suggested McCarthy’s situation could be too precarious for him to have any real leverage over his members too. That could still be true, but McCarthy has strengthened his position quite a bit since January. He is well liked in his conference, and his conciliatory and attentive style of leadership (no doubt a result of those early difficulties) has been well received. He has not made enemies yet, as the past several Republican speakers did pretty quickly. He hasn’t really been tested with a must-pass bill, to be sure. But so far, he has played his very bad hand pretty well. That’s worth pricing into your expectations for the debt-ceiling fight.

Second, the concessions that McCarthy made to House Freedom Caucus members to win the speakership in January may actually provide more flexibility to the speaker and his team. That probably sounds counterintuitive. McCarthy gave up some real power — most notably seats on the Rules Committee, which thesSpeaker normally monopolizes — to members who aren’t particularly known for cutting the leadership any slack. But bringing those members into the process has worked out well so far. I thought at the time that their demand for Rules Committee seats would be good for the House, and to this point that has been borne out. You could see that in the process by which the debt-ceiling bill that passed last week took form. The Freedom Caucus members of the Rules Committee used their newfound power to do just what they have always accused party leaders of doing: They negotiated the details of a bill behind closed doors and then put it up for a vote. Negotiations basically have to happen behind closed doors. And by broadening the circle of people who are behind those doors, McCarthy’s concession allowed House Republicans to negotiate more effectively among themselves. That doesn’t necessarily mean it will make negotiating with Democrats easier too. Those Freedom Caucus members of the Rules Committee may blow up that process instead. But having them on the inside improves the chances of an agreement that could win enough support among House Republicans.

Third, the strategies that both sides have been pursing on the debt ceiling so far this year have readied the ground for a bargain. Intentionally or not, the president’s unwillingness to talk has helped House leaders prepare their members for an eventual deal: By attacking Biden for refusing to negotiate, McCarthy has socialized among his members the idea that their goal is to negotiate — which, to put it mildly, is not how all of his members have always thought about their goals.

Fourth, we are clearly entering the next phase of this process. The dynamic by which House Republicans demand talks and the White House demands that they put concrete ideas on the table first reached its logical conclusion last week when Republicans put a set of concrete ideas on the table. These were not plausible ideas, to be sure. Very little in the package that House Republicans passed — maybe nothing except the rescission of unspent pandemic-response money — could actually be part of an ultimate deal with the White House. And their proposal wasn’t a traditional budget, either, as they seem unable to agree on one. But it was enough to render Biden’s existing strategy no longer tenable. McCarthy also showed that his conference can pass a debt-ceiling proposal, and therefore that Republicans are at least willing to unite behind some strategy for pushing the debt-ceiling fight forward. The phase of this process that we have been in since early March is now over, even if the shape of the next phase remains unclear.

Fifth and finally, the fact that the White House has now proposed what it calls a budget while Republicans have proposed what they call a debt-ceiling bill is an interesting wrinkle, and potentially a cause for hope. It means that, although the two sides seem pretty intransigent, they have actually opened up a little space for one another to save face. It is now possible to imagine an outcome that the Democrats would describe as a budget deal that includes a debt-ceiling increase and the Republicans would describe as a debt-ceiling deal that includes negotiated spending levels. That is the closest thing I have seen to a plausible end-game that doesn’t involve breaching the debt ceiling.

If all of that seems reassuring, you’re reading it wrong. These are reasons think some bargain could be struck, and that the tiny steps both sides have taken so far have basically been in the right direction. But getting from here to a deal would still require a series of moves that will not be easy for anyone to make. If you want something realistic to hope for, hope that we won’t reach the debt ceiling until the fall. Maneuvering in narrow channels is best done slowly.