tip off

Debt ceiling crisis over, for a while

Congressional Republicans give in and vote to suspend America’s debt ceiling for three months. So where’s the next crisis?

As I had tipped, Barack Obama just needed to stand firm on the American debt ceiling increase and the Republicans gave in. This morning the House of Representatives passed a bill to suspend the debt ceiling for three months, without getting any spending cuts or other concessions in return.

The measure passed with mostly Republican votes; the New York Times reports that “Democratic leaders tried to persuade their members to vote against the deal, so as to force as many Republicans as possible to vote to do something most said they would never do.”

Three months might not seem like a long time, but the importance of it is that the issue won’t come up again until after two other deadlines: 1 March, when the “fiscal cliff” automatic spending cuts kick in (the ones that were deferred from 1 January), and 27 March, when the current authorisation for the government to spend money runs out. Both occasions give the opportunity for the Republicans to have the fight over spending cuts that the president refused to buy into this time.

This probably marks the end of the strategy of using the debt ceiling as a bargaining chip. While the Republicans could just keep on passing short-term extensions, that only becomes more and more embarrassing for them if they can’t extract anything in return. As Jon Chait said last week, “Once they’ve recognized that the debt ceiling isn’t leverage, they have no reason to keep taking painful votes that expose their members to attack ads.”

The vote on the debt ceiling did contain one other provision: a suspension of pay for members of either house of Congress that fails to pass a budget resolution by 15 April. The Senate hasn’t passed a budget since 2009, but it doesn’t have to; expenditure continues to get authorised by appropriation bills and by interim measures called “continuing resolutions” (that’s what runs out on 27 March).

So the demand for Senate Democrats to pass a budget (any budget, not necessarily the same one the House passes) is basically a piece of political theatre. But the provision has another problem – it’s apparently unconstitutional.

The 27th amendment, approved in 1992, provides that the pay (“compensation for the services”) of Senators and Representatives shall not be varied until there has been an intervening election. It was designed to stop Congress increasing their own pay before the voters have had a chance to pass judgement on the idea, but it applies to reductions as well. On my reading, suspending someone’s pay is clearly a means of varying it.

(The 27th amendment has a very interesting history: it was originally proposed with the first ten amendments, which we now know as the Bill of Rights, in 1789, but failed to be ratified in enough states to take effect. It was rediscovered in the 1980s, and a further 32 states ratified it, helped by a bunfight over underhanded pay increases in 1989. More recent amendment proposals include time limits within them to stop this sort of thing happening again.)

So the main budget contest is probably going to happen in March. Republicans still say they want spending cuts, but seem as far as ever from actually specifying what they would cut. Once you’ve quarantined both military spending and benefits for rich old folks, plus of course ruling out revenue increases, it makes balancing a budget pretty hard. And in Ed Kilgore’s words, “A hostage-taker who’s not sure what ransom to ask isn’t usually real successful.”

In the meantime, Obama has shown that he’s not resting on his inauguration laurels by bringing forward a plan to allow women to serve in combat roles. No doubt this is the sort of thing that the Republicans meant when they said that he’d signalled the pursuit of an “unabashedly far-left-of-center” agenda.

Don’t believe them when they tell you “It’s the economy, stupid.” It’s really still the culture war.

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