Paul Ryan has now offered a new rationale for why Republicans see the need to drag us to the edge of debt ceiling disaster, and its absurdity is really revealing. It demonstrates once again that there’s just no need for the Republicans to fight this out in a way that’s as risky as possible for the American economy.
Ryan, in a message clearly directed towards fellow Republicans, told National Review that the GOP should battle to the death over the debt limit — presumably raising it in the end — because this is the GOP’s only chance to force Democrats to give them whatever they want. That’s because Dems are refusing to do a budget of their own, a process which would give the GOP a way to win concessions.
“There is no budget process, since the Senate is not going to do a budget,” Ryan said.
This is just gibberish, particularly coming from the Republican Budget Chairman. It’s true that the Senate hasn’t passed a budget. But so what? Budget or no, Congress still has to pass spending bills for the next fiscal year, and House Republicans can certainly attach whatever they want, including Medicare or Medicaid spending cuts, to those bills. And they can negotiate over them, just as they are doing today. The only difference is that there would be no risk of default; the consequences of a possible government shutdown over appropriations are still severe, but not nearly as unpredictable as the threat of reaching the debt limit. Indeed, part of the problem with using the debt limit as hostage is that it’s possible that the government’s credit rating will be damaged (with all the costs that go along with that) just from the markets believing there is a danger of default; by contrast, a threatened shutdown (that is, over appropriations expiring) that never materializes has no consequences at all, as the almost-shutdown just this spring demonstrated.
In fact, there will be a budget process this year. Remember, the budget resolution — that’s the thing that Senate Dems haven’t done yet, and may not do — isn’t a law. It doesn’t actually do anything, except to give instructions from Congress to Congress. Passing a budget doesn’t have any relation to whether Congress passes spending bills, which it must do in the end. Republicans will have their chance to use these to their advantage.
Despite Ryan’s gibberish, the plain fact is that Republicans are holding the nation’s credit rating hostage by choice.