Jonathan Chait is a senior editor at The New Republic. He writes the magazine's TRB column. He is also the author of The Big Con: Crackpot Economics and the Fleecing of America. He has worked at The New Republic since 1995.
Monday morning, Mitch McConnell gave away a key tell when he said he had a contingency plan to ensure the debt ceiling gets lifted. Yesterday he showed his hand and it's a fold. The plan announced by McConnell yesterday is highly, and intentionally, convoluted, but the details don't really matter. The essence of it is to abandon efforts to force policy concessions in return for lifting the debt ceiling, and instead set up a bunch of show votes to embarrass the Democrats. In other words, it's a reversion to the old status quo, before President Obama and the Congressional Republicans turned the debt ceiling vote into a high stakes hostage crisis.
We don't know how this gambit will turn out. John Boehner's spokesman is definitely not ruling it out. At the very least, McConnell's capitulation will pressure House Republicans into going along. They may refuse. But assuming this winds up being the mechanism to increase the debt ceiling, it's a staggering turnaround.
If you told me last week that we might get a debt ceiling hike without Obama making policy concessions to Republicans, I wouldn't have believed you. What happened since then? Well, Obama called the Republicans' bluff. He turned the debate from a generalized question of cutting spending, where the public sides with Republicans, into a debate over specific policy priorities, where the public overwhelmingly supports the Democrats. Most people want a balanced package of revenue increases and spending cuts, in contradiction to the GOP's all-cuts-or-die stance. The public strongly favors higher taxes on the rich and strongly opposes entitlement cuts. Obama smoked out the GOP's actual policy choices. And he smoked out the Republicans' refusal to compromise on its unpopular priorities, establishing himself as the one party who was willing to make the kind of compromise that was the only plausible avenue to deficit reduction.
More recently, Obama said that if the debt ceiling is not lifted, he won't be able to send out Social Security checks. Imagine how that one would play out for Republicans. In general, he demonstrated yet again that it's very hard for Congress to win a public relations fight against the president. Meanwhile, the business lobby was no doubt pushing hard behind the scenes, and the business lobby usually wins.
Many conservatives are understandably furious with McConnell. (One Republican Senate aid calls it "a full surrender, white-flag approach.") But it's amusing to watch a handful of them present this retreat as a victory. Jennifer Rubin, who leaked the plan from McConnell, says it puts Democrats "in a bind," as if having to cast a vote to raise the debt ceiling — which Congress has been doing for years on end — is a worse bind than choosing between large-scale spending cuts or catastrophic default. (I wonder if Rubin's gullibility recommended her as the messenger for the leak.) Fred Barnes pushes the frontiers of propaganda to new limits by describing McConnell's plan as "a bold offensive."
I've been lambasting Obama's strategy pretty much on a daily basis. It appeared that Obama blundered into a hostage crisis he didn't need, and then wound up offering Republicans an absurdly generous deal, trading away major entitlement cuts in return for a pittance of revenue — no higher than what will be raised if the Bush tax cuts expire on schedule.
So those were the options as of last week: A massive policy giveaway that won Obama some centrist credibility at immense substantive cost, or else let the economy get killed. Instead, Obama has reestablished credibility on the deficit at zero substantive cost. (He can always cut a deal without a gun to the economy's head.) Either the administration is run by pure political geniuses, or they're the luckiest sons of guns who ever lived.
Obviously, the House could revolt and refuse to go along. They'd be splitting off from their Senate Republican counterparts, and isolated as the party willing neither to make a bipartisan deficit deal to raise the debt ceiling, as Obama is, nor to just let the ceiling get lifted, as McConnell is. Obama can keep pounding the House Republicans for being crazy, and then wait and see what they do when the Social Security checks don't come in the mail. The worm has turned.