Obama was confused. “When you say it looks like they will have significant influence on the White House, what do you mean?” He asked.
“Just in the sense that they’re basically going to say we’re not going to go through with it unless the White House is able or willing to go along with major spending cuts across the board,” Ambinder replied, “which will probably more far and farther than you are willing to go.
Obama rejected the idea. “I will take John Boehner at his word,” he said, referring to the new Speaker of the House, “that no one, Democrat or Republican, is prepared to see the full faith and credit of the United States government. collapse, that would not be a good thing to happen.
Obama was wrong. Ambider was right.
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It’s been nearly 12 years since that interaction and Ambinder’s assessment of the political utility of the limit has only gotten better. Over those 12 years, the once reluctant but routine practice of raising the limit as debt approaches has turned into a series of fights over whether it should be raised.
The debt limit does not do what many people assume. It is not a question of limiting expenses, but of paying for expenses that have already been approved. The theory behind many debt ceiling struggles is that by capping the amount of debt that can be accumulated, you will limit spending by working backwards.
But that’s not how it works in practice, as you can see below. Instead, Congress is spending money with a deficit and ever-growing debt to give it breathing room. The debt ceiling does not affect debt; the debt affects the debt ceiling.
The graph dates back to 1994, the first term of President Bill Clinton. About halfway through, you can see this 2010 press conference marked with a black line. It was then that Ambinder predicted that the debt ceiling would be used for political blackmail. And it was. Notice the small black box in the center. The purple line indicating the amount of accumulated debt becomes flat for a while; Congress did not raise the debt ceiling and therefore the amount of debt did not increase. It was early 2011, and it set a pattern for the next 11 years.
Prior to 2010, there were no significant periods when the debt line remained stable, no times when the debt limit was not increased to account for debt growth. Nor are there white spots, periods when the debt ceiling was simply suspended to avoid fights over raising it. In fact, since 2010, there have been relatively little periods when the debt ceiling was both above the debt and in place.
It’s worth revisiting all of this because of a report from Axios on Wednesday afternoon. He suggested that if Republicans regain the House in November, as planned, they could again use the debt ceiling as a pressure point on the Biden administration.
Alayna Treene of Axios spoke with Neil Bradley, director of policy for the American Chamber of Commerce, who told her that “the debt limit turning into a ‘political football’ became a ‘model of divided government’ “, especially with a Democratic president”.
The use of “particularly” is what we in the writing world call an “understatement”.
Since 2010, there have been four years in which there has been a Republican president. Of those four years, two overlapped with the unified Republican control of Congress. So if we’re talking about a divided government under a Republican president, we’re talking about 2019 and 2020.
In March 2019, a suspension of the debt ceiling that had been voted in early 2018 on a bipartisan basis ended. A new limit has come into effect on the amount of debt accumulated by the government.
It is worth pointing out, of course, that being willing to suspend the debt limit largely betrays the game: if the limit is exceeded, there is no putative control over the debt. It is a tacit recognition that the purpose of the debt limit at this point is not really to control debt but to use debt as leverage.
The Treasury Department announced that it could still continue to pay its bills for a few months using what are called “extraordinary measures”. In July, he pushed back the timetable: Congress had until early September to increase the limit or the government could default on its debts. Less than two weeks later, Congress passed a bipartisan bill suspending the limit again — with most Democrats supporting it and most Republicans opposing it.
In other words, claims that the debt limit is a tactic used by the party that controls Congress but not the White House are lacking. The only time that happened under a Republican president in the blackmail era, it was the Democrats who pushed to suspend the limit, not the Republicans.
The rest of the Axios article is more direct on this fact. It hinges on the idea that a Republican House will use the limit as leverage, part of a now-familiar toolkit for lobbying a Democratic president.