Budget Deal as Rorschach Test

David Super

     A month or so ago, I expressed skepticism that Speaker McCarthy had the authority to reach a budget deal that could get the Democratic votes necessary to pass.  Obviously, I was wrong.  Accordingly, I am doing what any serious academic does when events prove them wrong:  I am writing a long-form scholarly article explaining why I was actually correct after all.  (I say that only half-kidding.) 

     In the meantime, however, it seems useful to consider what factors allowed the deal to surmount the obstacles that polarization posed.  This analysis draws little from the “inside accounts” in the popular media that are almost entirely spin:  almost no disinterested parties are present in these discussions so what they tell the media is instructive only as to what they want the public to think about their side’s role in the process.  So, for example, Republican accounts emphasize White House staff’s role to further their narrative about President Biden’s incompetence; Democratic stories try to make this process sound as different as possible from the negotiation in 2011 – when Speaker John Boehner bullied and manipulated President Obama and his vice president – to fend off criticism that they learned little and repeated unpleasant history.

     The biggest surprise to me was Speaker McCarthy’s willingness to make himself dependent on Democratic votes – and most House Republicans’ willingness to allow that.  The rule that House Freedom Caucus negotiated in exchange for allowing Rep. McCarthy to become speaker allow a single Member to move to declare the speaker’s chair vacant.  If Democrats were to follow ordinary practice and vote against the Speaker, the Freedom Caucus’s votes would be more than enough to carry the motion to victory even if the vast majority of House Republicans stayed loyal.  One might expect Democrats would be pleased to vacate the speaker’s chair:  with no obvious replacement, House Republicans could become locked in another divisive and embarrassing public fight, supporting Democrats’ narrative that House Republicans are beholden to extremists. 

     The reason no Freedom Caucus Member has filed such a motion is clearly that they understand that Democrats have Speaker McCarthy’s back.  If forty or so Democrats abstain, the same Republican Members that backed him throughout the votes in January would be enough to preserve his gavel.  A Republican official depending on Democratic votes would ordinarily be disqualifying, but apparently the majority of their Members have wearied of the Freedom Caucus enough to accept it.  Rep. Thomas Massie, a right-wing Member added to the House Rules Committee at the Freedom Caucus’s insistence, recognized how embarrassing this situation is for the Speaker and voted to bring the deal to the floor so that the Speaker would not need Democratic votes in Committee.  But everyone knew Democrats would help if needed. 

     This does not mean that Speaker McCarthy is now a coalition speaker or that he will not zealously advocate for many extreme Freedom Caucus positions.  But it does mean that on issues where many of his Members agree with Democrats, such as aid to Ukraine, he has some latitude to bypass the Freedom Caucus.  Even without the Freedom Caucus, however, several election cycles of primaries and forced retirements have yielded a quite extreme set of House Republicans so little true moderation is likely. 

     Also surprising about the final budget deal was how effectively leaders on both sides managed to induce and manipulate wishful thinking by their Members.  On issue after issue, each leader managed to find just the right kind of complexity or ambiguity to allow Members to see what they wanted to see.

     For example, the deal has six years of spending caps that will force huge real cuts in what the federal                        government is able to do domestically.  Two of those caps are backed with the threat of sequestration; the other four are not.  Speaker McCarthy accordingly claimed that he had won six years of caps and calculated huge savings numbers.  Because his Members were seeking big numbers and had not bothered to identify particular policies to achieve those numbers, this went over well.  President Biden, on the other hand, played to the legalism of many Democrats by claiming that the final four years’ caps were “non-binding”, suggesting that he had outmaneuvered the Speaker. 

     In practice, because appropriations levels always require bipartisan agreement no matter who controls Congress or the White House, Republicans can, and presumably will, insist that Democrats agreed to these out-year caps and reject any appropriations bills that exceed them.  But Democrats like to think of Republicans as stupid so the outmaneuvering narrative stuck.

     Similarly, Speaker McCarthy won imposition of a three-month time limit on food assistance to unemployed and underemployed 50- to 54-year-old childless adults – what Republicans call “work requirements” even though they offer no chance to work for assistance.  The White House, again playing on Democrats’ conceit that they are more sophisticated than Republicans, included three exemptions that it claimed would actually increase the number of people eligible for food assistance.  This claim is incorrect for several reasons, most obviously that states are terrible at recognizing and applying those exemptions.  The largest group the White House claimed to have protected was the homeless, yet USDA issued guidance several years ago advising states that homeless people already were generally exempt.  States face audit penalties for providing food assistance to people who should be disqualified, they face no sanctions for denying food to people who should be exempt. 

     Finally, I was surprised at the willingness of Members of both parties to trust their leaders on the contents of side agreements not included in the legislation on which they were voting.  The explicit cut to IRS funding appears fairly moderate, but Speaker McCarthy claimed to have a side agreement for much deeper cuts that would hobble the agency’s ability to audit affluent tax cheats.  This question could potentially have a huge impact on the deficit as well as on the morale – and propensity to pay – of non-affluent taxpayers.  Similarly, the two sides appear to be contradicting one another on how much the appropriations caps in the first two years will be softened by side deals on “adjustments”.  On these issues and others, the vast majority of Members of both parties were content to tout their leader’s story despite clear evidence that the other side believed something very different.  For all both sides’ mutual distrust and demands for transparency, opacity won the day. 

     A side note is that nobody should put any real weight on how either representatives or senators voted.  Speaker McCarthy promised 150 Republican votes.  He missed that level slightly, but even if he had missed by a great deal the Democrats would have supplied whatever was needed (including some who took advantage of the solid majority for passage to vote “no”).  In the Senate, the Democrats’ majority made them responsible for corralling most of the needed votes.  Minority Leader McConnell was responsible for supplying only enough Republican votes to invoke cloture, plus a few more to cover for dissents from a few Democrats (who likely would have voted “yes” if Senator McConnell had stumbled). 

     Perhaps most interesting was the failure of Sens. Mike Lee or Rand Paul to filibuster:  Leaders Schumer and McConnell had the votes to end debate, but doing so would have taken several days, possibly preventing final passage before the June 5 deadline Secretary Yellen had announced.  They likely concluded that no viable vehicle existed for locking in additional concessions from Democrats so they would reap little reward from keeping their colleagues in Washington through the weekend.

     Finally, after months of complaining that the debt limit’s validity under the Fourteenth Amendment should be tested in court before he asserted it – not a terribly realistic expectation – President Biden threw away a perfect opportunity to obtain that ruling.  He had more than enough time for Treasury to auction off a token amount of bonds in excess of the debt limit, enabling a legal challenge, and then to sign the legislation and hold a regular Treasury auction to meet the government’s on-going expenses.  On each individual occasion, it may seem more beneficial to pay protection money than to rid oneself of extortionists, but the cumulative long-term effects are devastating. 

     @DavidASuper1