16 October 2013

Accordion: Shutdown and the Debt Ceiling

This post is an accordion: just click a link to go to an expanded discussion of that topic.

Well, the government shutdown (1) is over, and the debt ceiling (2) will not be breached. Outside of an actual election, you almost never see such a decisive victory in politics. The Republicans not only failed to defund Obamacare (3), delay it wholesale, delay the individual mandate (4), or delay the medical devices tax (5), but they did enormous damage to their image (6). The final result: a clean CR (7) that ends on the Democrats' preferred date, a clean debt limit that lifts the debt ceiling as much as Democrats' wanted, the Republicans will finally have to agree to the budget conference that Democrats have been demanding (8), and a pair of semantic tweaks to Obamacare that Democrats would have willingly passed anyway (9).

It's interesting to reflect that while everyone involved was responding to perfectly sensible incentives (10), the epistemic closure (11) of extremist Republicans prevented them from actually understanding the situation or understanding the consequences of their actions. When you willfully ignore reality, it's not surprising when you fail to succeed. The winners of the conflict are clear: Democrats, Senator Cruz (12), Senator Reid (13), and Speaker Boehner (14).

It's hard to celebrate a victory that never should have been necessary, especially when it came at the cost of billions of wasted dollars and quite a bit of our international prestige.

NOTES

1. Congress has to allocate money to each government services every so often - so much to defense, so much to food stamps, etc. When they fail to do so and the money runs out, then the government has to stop spending money. Many essential services remain (air traffic controllers, some soldiers, etc.) but an enormous amount of important government activities have to stop - a government shutdown. This lasts until Congress passes another bill and authorizes more funding. (back to top)

2. Essentially an artifact of history, the debt ceiling is the total amount of money the government is authorized to borrow to pay its bills. It has a scary name, so people think that a vote for the debt ceiling is a vote to spend more money, but that's really not the case - it's a vote to pay the money that was already spent. The usual metaphor is a restaurant: Congress already ordered and ate the food, and they don't get to negotiate whether or not they want to pay after they've finished their meal.

If Congress didn't raise the debt limit, then the government couldn't pay some of its creditors, since we spend more money than we take in. That would have much the same effect on our national credit rating as it would have on your own: defaulting on our debts would be catastrophic to the world economy. (back to top)

3. Despite the 2012 loss, an electoral defeat that was heavily predicated on the survival of Obamacare (McCain mentioned it in every speech, as he reminded us on Face the Nation, and voters picked Obama), the House GOP tried to tie the funding of the government to the killing of Obamacare. They repeatedly passed bills that funded everything in the government but Obamacare, in order to end it. (back to top)

4. The individual mandate is the portion of the bill that requires everyone to buy health insurance. No one likes this, of course, but it's in Obamacare for a reason: it's the only way the plan works. In order to get all that good stuff everyone likes (no discrimination against pre-existing conditions, people can stay on their parents' plans until 26) you have to have some things people dislike. Delaying the individual mandate is essentially killing Obamacare in a different way, but it sounds more appealing to voters. I guess it would also be appealing to say "Everyone should get candy and no one should have to pay." (back to top)

5. Even many Democrats don't like the new tax on medical devices that's part of Obamacare. It's another way the bill pays for itself, but it's also deeply unpopular and not central to the law. If the GOP had demanded in the beginning a repeal of the medical device tax in exchange for a budget to fund the government, they would have gotten it. Instead, they lost even what they could get. (back to top)

6. Going into the fight, Republicans saw polls that said that their tactics were deeply unpopular. But after two weeks of a shutdown, and approaching the insanity of a debt ceiling default, the GOP's polling fell off a cliff. Three-fourths of all Americans condemned the party, and their numbers hit new lows. (back to top)

7. When Congress doesn't pass a real budget, they often take the shortcut of passing a "continuing resolution" - a bill that essentially just keeps everything the same. Rather than evaluating the spending levels for each department and coming to a decision, they delay the decision. It's been years since Congress has actually passed a budget, so continuing resolutions are becoming the norm rather than the exception. (back to top)

8. In the normal budget process, the House passes a budget bill and the Senate passes a budget bill and then a delegation from each house hashes out a final version in a budget conference. For three years, the Democrats in the Senate delayed passing a budget bill, and were hammered for it. But when they finally passed the bill and wanted to go to conference, as the GOP had been demanding for years, the Republicans changed their mind: if they went to conference, after all, they might have to compromise. (back to top)

9. In the deal, there will be slightly stricter scrutiny of the income level of people who receive subsidies. This already exists in Obamacare, and not even the most vigorous of Republican partisans can really call it a victory. No Democrat had any objections. (back to top)

10. The extremist Republican congresspeople who helped push their leader in this direction are in no danger of losing to a Democrat, by and large: their only threat is from a primary challenge by someone who is more conservative. So they have every reason to be as extreme as possible. (back to top)

11. Epistemic closure is when a community only speaks within itself, agreeing constantly and never learning any new information. The Republicans have become increasingly epistemically closed, which leads their representatives to a view of the world that is entirely detached from reality and much further away from mainstream views. (back to top)

12. Senator Cruz is now the frontrunner among potential GOP 2016 candidates, and he raised an enormous amount of money. He still does not seem to have realized that he has helped the Democrats and hurt his cause more than anyone else. The roll-out of Obamacare has been disastrous in almost every way, and it seems like hundreds of millions have been spent on a nightmare of a website. Were it not for the shutdown and debt ceiling, that would be all over the headlines. (back to top)

13. Reid, Senate Democratic Majority Leader, has long had a reputation as a political mastermind. He's known as someone who will quietly and efficiently knife his enemies, without any grandstanding. Obama let him take control of this whole process, and it was on Reid's insistence that the Democrats held firm and refused to yield an inch. (back to top)

14. It was hard to see how the feckless Speaker of the House, John Boehner, was going to keep his job. After all, if he passed any reasonable bill, he was going to lose the support of the forty to fifty extremist Republicans. But if he didn't pass something, he'd crash the economy and lose his job anyway. Now, with the deals all falling into place, we see that Boehner's strategy of non-leadership has let him stay in place yet again. No one in his caucus is thinking about deposing him. It was costly for the country, of course... but what does he care? (back to top)

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