Friday, September 20, 2013

Revisiting Democratic Mistakes: Debt Limit

You know what the "Gephardt rule" was? Majority House Democrats back in the 1970s automatically linked the debt limit to the deficit that Congress passed, so that there didn't need to be a separate vote. Then when Republicans took control of the House in 1995, they scrapped it.

And then when Democrats regained control in 2007, and had unified government with (briefly) 60 Senators in 2009, they...well, they didn't do anything at all. They didn't even pass a debt limit increase that would have at least meant that it wasn't an issue in 2011-2012 leading up to the presidential election.

Mainly, however, they failed to simply scrap the whole thing. I don't know whether they failed to anticipate that it would be a problem if Republicans took the House in 2010, or if they didn't have the votes to act because some Democratic Senators though it would be a tough vote, or if they just overlooked it entirely. Whichever: it was a clear mistake then, and they've paid for it ever since.

To be sure: one must be careful when second-guessing 2009. Remember that there were only 58 Democrats at the beginning of the historic 111th Congress, and one of those (Kennedy) wasn't always available. Not only that: intense partisan pressure to pass things as fast as possible might have upset the process that brought Arlen Specter into the Democratic caucus, giving them 60 and the ACA (and more). Still...I do think that tossing a debt limit elimination onto some law passed over those two years probably could have been done, and wasn't.


  1. One thing the Dems had to be careful about in 2009 was not playing too much to type. So the Dems didn't immediately undo the Bush tax cuts for the wealthy or on capital gains/dividends. If they had done that right away, they would have looked way to eager to raise taxes--in line with their not-so-pleasant reputation.

    Maybe it's the same with eliminating debt ceiling votes. The Dems may not want to carry about the burden and political costs of being the ones who raised the government credit limit to infinity.

    Many people will say that the reputation is unfair, and the GOP has done a lot of borrow and spend too. That's true, but the GOP also lines up to vote for a balanced budget amendment.

    If the Dems want to improve their reputation AND be able to point at the GOP for not being fiscally prudent, they can't really be getting rid of the debt limit, or be seen as totally against any budget discipline.

    1. I don't know. It seems plausible that re-coupling spending and the debt limit could be made with an argument that this was fiscal prudence. There's a household-analogy style to it which might not cheese off moderates, a "if you put it on the bill, you have to pay the bill." Hardline Republicans would call that being irresponsible, but what matters is how it'd play to moderates/independents.


      More broadly, it could have been done, but to what extent had they considered that this whole debt limit thing would even be an issue? My understanding is that Republicans decoupled spending and debt limit increases, but never really did anything with it. I may very well be wrong, but was there a credible fear that it would be used like this? I can't fault people greatly for not preparing for a circumstance which seemed wacky. KC managed to defend the Swinging Gate last night, but I wouldn't fault them for not having practiced it during the week.

    2. MP, I think that there is also a presumption on the part of Democrats, which turned out to be wrong, that the Republicans:

      1. Actually care about the future of the country and economy more than scoring cheap political points


      2. Understand basic logic, economics, and cause and effect.

      This forlorn hope, that Republicans are not actually trying to *destroy* the middle class, has certainly led Democrats astray. And everyone blames the Dems for it!

  2. Now, this is what I call Monday morning quarterbacking!

    Remember that one reason the first debt ceiling showdown event so poorly is because it was seen as radically new. What do you think democrats should have known in 07 or 09 that would make them think the debt ceiling would become a problem?

    Not going for DC statehood was a mistake. This was simply a complete absence of information.

    Also, I know you don't mean it this way but when you talk about it like this it sounds like you're absolving the republicans for playing games with the economy and blaming the situation on dems for not fixing the problem in advance.

  3. Whichever: it was a clear mistake then, and they've paid for it ever since.

    "A clear mistake then"? Can you provide a link to your c. 2007-2009 post imploring the Dem majority to abolish the separate debt limit vote?

    Otherwise, what you really mean is: "it was a clear mistake with the benefit of 20/20 hindsight"

    1. I mostly didn't, although I criticized them for not taking dealing with it during the 2010 lame duck session (and I can't be blamed for ignoring it before July 2009, since I wasn't here yet).

      I'm okay with calling it an understandable mistake, but yeah, I think they should have seen it then and acted on it.

  4. I don't think anyone anticipated losing Kennedy's seat in early 2010, so the expectation was that these sorts of things could be done after health reform and Dodd-Frank were put through.

  5. The other thing the Democrats should have done was pass their signature health-care reform while they had the votes for it, so that even if they lost one of the houses of Congress, those gains would be locked in and safe.

    Wait, what?

  6. I disagree--too easy to demagogue the issue, which is why we have it in the first place. I think repealing it in 2009 would have been death for Senators like Lincoln and many of the blue dog Democratic congresspeople Rahm had gotten in. Of course, in hindsight those people were going to lose in 2010 anyway, so they might as well have taken the hit.


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