Math Is Hard, Kevin

Photo: Brendan McDermid / Reuters

Speaker Kevin McCarthy has a very big problem, and he’s trying desperately to make it ours. In exchange for securing the votes, after an embarrassing 15 attempts, to finally elevate him to Speaker, McCarthy promised members of the far right, including the powerful “Freedom Caucus,” that he would not raise the debt ceiling cleanly. Instead, he promised them he would demand steep spending cuts as a precondition to raising it.

That’s a non-starter for the Biden Administration, which has made that clear from the get-go. The nation pays its debts, and we should never gamble with the faith that borrowers have in that inviolable promise. To do so risks global financial catastrophe.

And yet.

McCarthy has a very big problem. Members of his own party may not agree to his cost cutting plan, or to raising the debt ceiling while not touching certain programs like Social Security or Medicare. 

As the deadline to act approaches, McCarthy faces a key test today in a scheduled GOP conference, where the question of his proposal on the debt ceiling will be put to the Republican House members. 

Let’s take a look at what McCarthy is proposing and how he plans to get 218 votes in favor. Failure to rally his conference behind his plan will mean he still has nothing to offer the White House, which has been asking for months to see his budget proposal. Without one that he can even get his own members to back, McCarthy would be significantly weakened—or even removed as Speaker.

But first, a quick reminder of what we’re talking about with the debt ceiling, to get us all on the same page.

The deadbeat limit

We are all probably somewhat familiar now with the debt ceiling, but here’s a quick primer. The nation has a budget deficit, as it has had for many years, and so to pay the bills it has already incurred, including things like government paychecks and Social Security checks, it has to borrow more money. 

I have referred to the debt ceiling in the past as a “deadbeat” limit. This is because it’s not so much about raising a “debt” ceiling as you would a credit card limit, but rather fulfilling an obligation to pay, as you would your car payment. As I wrote back in January,

With Republicans in charge of the House, the question is whether the GOP will turn the U.S. government into a deadbeat debtor. Deadbeats, if it even needs to be spelled out, are people who don’t pay the debts they promised to pay. And that’s what this is really about. You see, Congress already voted to pay for all the paychecks and programs that are supposedly now on the GOP chopping block. So by threatening to not pay them after the fact, they are trying to get two bites at this apple. 

McCarthy wants to attach conditions to the debt ceiling raise. As I noted earlier,

It would be as if you ran a big company and signed a lot of employee and vendor contracts, and then the next year you claimed, “Well, I know I said I’d pay you, and I have that legal obligation, but I’m just not going to do that. Not unless you agree that I can either not pay you anything or pay you a lot less, now that you really need that money!”

It’s worth mentioning that this is exactly how the Trump Organization has screwed small contractors out of their money for decades.

Under law, Congress has to raise the debt ceiling when the amount available to borrow isn’t enough. It has done this some 12 times in the past 25 years, including three times without incident during the Trump years. McCarthy himself voted to do it all three times, and cleanly. Now, we’re about to bump up against this ceiling, likely sometime later this summer, and he’s changing his tune.

McCarthy’s “plan”

On Monday, McCarthy floated his idea of agreeing to raise the debt ceiling through to 2024 if federal domestic, non-defense spending is rolled back to 2022 levels, all without touching Social Security or Medicare. While this might sound superficially appealing, a quick dissection reveals why it’s a non-starter.

I’ll give just one example. The GOP has its own energy package, expressed in a bill passed in the House called HR-1, that would increase U.S. energy production while undoing all of Biden’s climate policies. That bill will go nowhere in the Senate, but now House Republicans want to ram it through as part of the debt ceiling negotiation. Remember, Biden’s hard-fought budget, passed by Congress in 2022 on a party line vote, makes historic investments in climate change while raising taxes on the wealthy and on big corporations. McCarthy’s proposal would undo all of that.

It’s worth noting that McCarthy’s plan doesn’t even yet have the backing of his own party. On Monday, when pressed, McCarthy would not say if he has the votes to pass it, only that he believes he does. The Freedom Caucus has its own plan, however, which the Biden Administration has assailed for its across-the-board cuts in police funding, train safety, healthcare, and incentives for manufacturing—all while clawing back investments in climate change and IRS enforcement, increasing work requirements for welfare recipients, and ending student loan forgiveness. Biden’s plan would keep all these programs but raise revenues from those most able to afford the tax increases.

The math

We already know McCarthy is pretty bad at counting votes. We also know that he plows ahead anyway, doing the same thing over and over, while gradually ceding more and more concessions to hardliners, until he hopefully gets what he wants. That’s how he became Speaker, after all.

On the debt ceiling raise, he can only lose four GOP votes before the whole effort falls apart. But last I checked, there are 16 members of the GOP who have never voted to raise the debt ceiling, even under Trump. These 16 include the three GOP holdouts—Reps. Matt Gaetz (R-FL), Andy Biggs (R-AZ) and Ralph Norman (R-SC), who for 14 votes refused to back McCarthy for Speaker, demanding assurances of spending cuts. These hardliners are angry about the idea of any kind of federal spending, so you can imagine how they feel about big investments in climate change and IRS enforcement, two pillars of the Biden budget passed last year.

If in the Tuesday GOP conference, or in the weeks to come, it becomes clear that McCarthy can’t please the hardliners enough to win over at least 12 of them to his plan, he will be stuck. With no proposal to even take to the “negotiating table” with Biden, he will look pretty silly and ineffectual. 

So, what now?

If he currently lacks the numbers to pass his plan, McCarthy could simply try holding successive votes, just as he did to win the speakership. But that tactic isn’t going to work with the debt ceiling. First of all, the nation and global markets don’t have the time to watch McCarthy flail around trying to win support for his plan. Those markets could begin to react very badly to his failures. Second, whatever plan he does come up with is DOA at the Senate, which simply won’t allow the House to undo key Biden budget bills by holding the economy hostage and attempting to seize a power it does not have. 

This last point reveals that this is all performative nonsense and fairly pointless. Anything containing radical spending cuts would face an impossible hurdle in the Democratic-controlled Senate. And Majority Leader Chuck Schumer isn’t going to negotiate with an economic terrorist. In Schumer’s view, shared by the White House, McCarthy must raise the debt ceiling cleanly. He warned, “I’ll be blunt: If Speaker McCarthy continues in this direction, we are headed toward a default.” 

But McCarthy has painted himself into a tough corner. He promised hardliners he would attach spending cut conditions to the debt ceiling to win their support, but that’s a no-go from the Senate and the White House. If he tries to pass a clean debt ceiling raise, the extremists could move to remove him as Speaker. 

But if he doesn’t pass a bill to raise the ceiling, he could drive the economy off a cliff. And if the Democrats try to work with less radical GOP members to forge a plan, hardliners could block their bills from coming to the floor in the Rules Committee, which is dominated by extremists appointed by McCarthy as part of his bargain with them.

It’s quite a puzzle. And McCarthy, while doggedly determined, is not known for being terribly bright or strategic. He’s running out of time, but there is little that Democrats can do to speed the GOP along. After all, the White House has been asking for McCarthy’s plan for months, and with just weeks to go before default, he still doesn’t have one backed by 218 of his own party members.

Math is hard, Kevin.