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McCarthy\u2019s role as the House Republican leadership team\u2019s motivator <\/b>and chief <\/b>vote counter in that first major debt limit confrontation <\/b>was largely on the periphery of the 2011 negotiations, which ended with Congress raising the limit at the last minute before the government defaulted on some of its obligations. The delay led to the first-ever downgrade of the nation\u2019s AAA credit rating and higher government borrowing costs.<\/span><\/p>\n Get Today in Politics<\/span><\/p>\n A digest of the top political stories from the Globe, sent to your inbox Monday-Friday.<\/span><\/p>\n<\/div>\n<\/div>\n A dozen years later, Republicans and Democrats are on a similar collision course with potentially disastrous implications for the US economy<\/a>. The United States officially hit its $31.4 trillion debt limit on Thursday and Treasury Secretary Janet Yellen began using accounting maneuvers known as \u201cextraordinary measures\u201d to allow the federal government to keep borrowing<\/a> to pay all its bills for several more months.<\/span><\/p>\n This time, McCarthy moves to center stage as House speaker, a job he narrowly won by promising far-right lawmakers he would not agree to a debt limit increase unless it was paired with significant fiscal reforms \u2014 changes that most likely would include major cuts to entitlement programs such as Social Security and Medicare. He\u2019s no longer just a salesman who needs to unite his troops. He\u2019s the top negotiator and required to master the policy details as well as the politics, a role that doesn\u2019t play to his strengths, said former Illinois Republican representative Joe Walsh.<\/span><\/p>\n \u201cKevin was the rah rah guy, the cheerleader, the motivator. He\u2019d show movie clips. He\u2019d put Vince Lombardi quotes up on the wall. He\u2019d do a ton of [stuff] like that. And those of us who were committed in opposition would just laugh at it,\u201d said Walsh, who was a freshman Tea Party member in 2011. \u201cTo anybody committed to an issue, Kevin can\u2019t move them.\u2026 It\u2019s just not his strength. He\u2019s not a policy guy.\u201d<\/span><\/p>\n McCarthy also has less room to maneuver. Republicans had a 49-seat House majority in 2011 under then-House Speaker John Boehner. Now, it\u2019s just 10 seats. In addition, House Republicans overall <\/b>are far more conservative and combative than they were 12 years ago and intent on using the debt limit \u2014 their greatest point of leverage with Democrats controlling the Senate and the White House \u2014 to reduce federal spending.<\/span><\/p>\n It\u2019s a perilous path, said Dave Camp, a Republican who chaired the House Ways and Means Committee in 2011.<\/span><\/p>\n \u201cThere\u2019s only so much leverage with regard to the debt limit,\u201d he said. \u201cThere\u2019s a point where if there is no agreement in the negotiations, what\u2019s the alternative other than extending the debt limit? … At the end of the day, default is not an acceptable outcome.\u201d<\/span><\/p>\n But Democrats and Republicans appear to have taken different lessons from the 2011 fight.<\/span><\/p>\n Republicans were able to get about $900 billion in spending cuts over 10 years and additional deficit reduction measures in exchange for agreeing to raise the debt limit. Now, with the national debt more than double what it was back then, Republicans say it\u2019s even more imperative to negotiate a deal that cuts spending.<\/span><\/p>\n \u201cWhy wouldn\u2019t we sit down now … set a path to get us to a balanced budget and let\u2019s start paying this debt off and make sure the future generation has as many opportunities as we do?\u201d McCarthy told reporters this past week.<\/span><\/p>\n Democrats, who watched as months of wrangling in 2011 ended with a credit downgrade even though the debt limit was raised just in time to avoid a default, have declined to cede any early ground. White House officials have been adamant they won\u2019t negotiate now over raising the debt limit, which they point out simply allows borrowing for spending Congress has already authorized.<\/span><\/p>\n \u201cThere will be no hostage-taking,\u201d White House press secretary Karine Jean-Pierre said this month.<\/span><\/p>\n Others predicted that just as in 2011, the need to raise the debt limit will eventually fuel the effort to reach a deal to reduce spending. <\/b>President Biden in particular should understand the need to negotiate, said former representative Eric Cantor, given his key role in talks back then as Barack Obama\u2019s vice president.<\/span><\/p>\n \u201cIt is unreasonable, at the very least, for this administration, especially for President Biden … to refuse to sit down with Republicans,\u201d said Cantor, who was majority leader in 2011 and is now vice chairman and managing director at investment bank Moelis & Company. \u201cMaybe they think that\u2019s a better negotiating posture, but I think it\u2019s pushing the whole thing closer to default.\u201d<\/span><\/p>\n The 2011 <\/b>credit rating downgrade by Standard & Poor\u2019s altered <\/b>the dynamics of subsequent debt limit debates, said Camp, now a senior policy adviser with accounting and consulting firm PwC. Although a downgrade was seen as possible back then, people weren\u2019t very worried about it, he said.<\/span><\/p>\n Another stalemate could lead to downgrades by the other two leading credit rating companies, Fitch Ratings and Moody\u2019s Investors Service, which would add to the already increasing interest costs on the federal debt.<\/a><\/span><\/p>\n \u201cThe whole thing was uncharted territory,\u201d Camp said of 2011. \u201cThe credit downgrade was certainly one of the possibilities. But I think many felt it wasn\u2019t likely, and now we know that it\u2019s a very real potential outcome of a failed negotiation.\u201d<\/span><\/p>\n But even if McCarthy can persuade the White House to negotiate and strike a deal, it might be difficult to get most House Republicans to approve it.<\/span><\/p>\n He probably would have to agree to cuts in defense spending, which some of his own members would oppose. Donald Trump on Friday warned Republicans not to cut Social Security or Medicare<\/a>, so any changes to those popular programs could cost votes from some of the former president\u2019s supporters as well as Republican moderates. And failure <\/b>to secure enough spending cuts could lead the most conservative House members to push for McCarthy\u2019s removal as speaker if he brings up <\/b>a debt limit bill that relies mostly on Democrats to pass it.<\/span><\/p>\n \u201cThis is a difficult vote for Republicans, because the argument is that, the money\u2019s already been spent, you need to raise the debt limit,\u201d Camp said. \u201cOn the flip side, Republicans are saying, look, we\u2019re spending too much, our debt is over $30 trillion, what can we do to make some of these programs sustainable for the long term?\u201d<\/span><\/p>\n In 2011, McCarthy and House leaders were able to persuade most Republicans to vote to increase the debt limit. The bill passed 269-161, with 174<\/a> Republicans in support and only half of the Democratic members. <\/a>Many Democrats were unhappy that the agreement did not include tax increases on the wealthy in addition to spending cuts. On the Republican side, 66opposed the bill, including some Tea Party members such as Walsh, who thought the deal didn\u2019t reduce spending enough.<\/span><\/p>\n \u201cWe were true believers back then. We would have not raised the debt limit and been absolutely fine,\u201d said Walsh, who was defeated for reelection in a redrawn district in 2012 and ran a short-lived campaign for the Republican presidential nomination in 2020. \u201cI don\u2019t believe the extreme MAGA folks are true believers in the policy end of this. It\u2019s about the power, it\u2019s about control, it\u2019s about going after the Democrats.\u201d<\/span><\/p>\n But that difference provides an opportunity for McCarthy to cut individual deals with House Republicans to support a debt limit increase, Walsh said. Although policy arguments aren\u2019t his strength, McCarthy\u2019s experience as the <\/b>House <\/b>whip \u2014 the job he held in 2011 \u2014 should <\/b>have taught him how to secure votes.<\/span><\/p>\n \u201cI think he\u2019s smart enough to know that he\u2019s got different members of his caucus now much more open to horse trading,\u201d Walsh said, noting that Congress no longer has a ban on pet projects known as earmarks that Republicans had put in place in 2011. \u201cThat\u2019s what he was born to do.\u201d<\/span><\/p>\n Jim Puzzanghera can be reached at jim.puzzanghera@globe.com<\/a>. Follow him on Twitter: @JimPuzzanghera<\/a>.<\/p>\n<\/div>\n
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