Legislative hostage taking

Former Senator Phil Gramm (R-TX) famously said, in his trademark Texas drawl,

Never take a hostage you’re not willing to shoot.

I heard him say this to a Republican colleague who had blocked a Clinton Administration nominee as leverage on an unrelated policy issue.  The White House publicly confronted the hostage-taking Senator, who promptly folded.  Gramm knew that, if you were going to make a legislative threat to block a bill or nominee, you needed to be willing to actually carry through with your threat (“shoot the hostage”).  The other guy might call your bluff, and you needed to be willing to accept both responsibility for the policy damage caused by your action, as well as the associated political pain.  And once you’re seen as an empty bluffer, your future threats have no power.

It appears that Senate Budget Committee Chairman may be making this mistake.  The Washington Post reports,

Conrad is the leader of a group of Senate moderates threatening to block an increase in the debt limit unless Congress also votes to create a bipartisan task force on deficit reduction with broad powers to force tax increases or spending cuts through Congress.

If this report is accurate, then Senator Conrad is bluffing.  If Leader Reid calls his bluff, neither Senator Conrad nor his colleagues will block an increase in the debt limit.  Nor should they.

Having worked on too many debt limit increases to count, from both ends of Pennsylvania Avenue, I will claim the following are six rules of debt limit increase legislation:

1. Treasury always says the debt limit must be increased by a certain date, and usually claims that date is a hard backstop, implying that the USG will default if the limit is not increased by that date.
2. Treasury always has more cash management tricks it can use to push that hard date just a smidge farther.
3. Some Senator almost always foolishly threatens to hold the debt limit increase bill, usually in an atttempt to gain leverage on some unrelated issue.
4. At the end of the day, that hostage-taker always folds, and a clean debt limit increase passes.  It is sometimes part of a larger bill, but the threat to block it always goes away if the demand is too great.
5. The majority party has the responsibility for delivering the needed 51 votes to pass the bill.  The minority gets a free ride, although sometimes the leaders will work together.
6. Therefore, the debt limit increase always passes, although sometimes a few days late, forcing Treasury to dip into its bag of tricks.  And the U.S. Government never defaults on Treasuries.

These are not the rules you’d like to govern the process.  They’re ugly and messy.  In an ideal world, Treasury wouldn’t have to dip into its bag of cash management tricks, each of which has increasingly harmful policy consequences, to buy a little more time for Congress to act.

But the end result has always been success, and I see little prospect for changing the process, so I’ll just try to explain it.

There is a fairly predictable dance that occurs each time the government approaches the statutory limit on debt held by the public:

• Treasury starts warning Congress, “We need you to increase the debt limit soon, like, by date X.”
• Congress replies, “Uh huh.  We’ll get around to it, don’t worry.”
• (a little later) Treasury:  “We really need you to increase it soon.  We’re running out of room.”
• Congress, “Yup.  We’ll get right on that.”
• (as date X nears) Treasury: “We need it NOW.”
• Congressional leaders: “OK, OK.  Hold your horses, it’s coming.”
• [Leaders start to move a “clean bill” that contains only a debt limit increase.]
• Some foolish Senator threatens to block the clean bill, and insists on a vote on his unrelated amendment, or that a separate bill addressing his issue be passed.
• If the demand cannot be easily met, the Senate Majority Leader goes to the floor right before date X.  The floor discussion goes like this:
  • [Majority Leader] “Mr. President, I ask unanimous consent that the Senate proceed to and have a roll call vote on the House-passed debt limit bill.”
  • [Hostage-Taking Senator] “Mr. President, reserving the right to object, I ask the Leader’s request be modified to allow a vote on my [unrelated] amendment to the debt limit increase bill, or to allow a vote on my [unrelated] issue as a separate freestanding bill.”
  • [Majority Leader] “I object to your modification.  There will be no amendments to this bill, and I cannot commit to a vote on your issue as a freestanding bill.”
  • Now the hostage-taker has to decide if he wants to be the one to kill a clean debt limit increase bill by objecting to the Leader’s unanimous consent request.  Sure, he can try to blame it on the Majority Leader, but he’ll lose that battle in the press.
  • The hostage-taking Senator then backs down, and the Majority Leader’s UC is agreed to.
  • The Senate votes and passes the bill.  Members of the majority party know they have the responsibility to pass the bill.  Those up for reelection may ask the Leader if they can vote no, but no member of the majority will outright refuse to vote aye on this vote if the Leader insists.  Sometimes the Majority Leader will ask the Minority Leader for help delivering votes, and depending on the state of their relationship at that moment, he may get help.
  • But it always passes.  Always.

There’s a simple legislative logic that gives the Majority Leader leverage against Hostage-Taking Senator when they offer competing UC’s.  It is politically difficult to defend killing or blocking a bill because of something that is not in the bill.  After all, you’ll have other opportunities to pursue your goal, so you don’t need to get your vote to add your provision right now, on this bill.  In contrast, this is a must-pass bill, and if you block it, you are responsible for the U.S. government defaulting on its debt.  No Member of Congress, no matter how extreme, is willing to take the blame for that.  The rhetorical, political, and therefore actual leverage goes to he who is arguing for this must-pass bill to be “clean.”

It is, however, possible to block a debt limit increase in favor of a smaller debt limit increase (within reason on the amounts).  Then neither Senator has rhetorical leverage in the battling UC’s, because both want a clean increase in the debt limit.  In fact, often the power shifts to whoever wants a smaller increase, because it’s hard to argue against “You can come back and extend it again later.”

Chairman Conrad may get his commission, although I doubt it he will get it now.  He may get his vote, although I doubt as an amendment to a clean debt limit bill.  If he confronts Leader Reid over the debt limit, either in private or on the Senate floor, Reid has all the leverage.  He can force Conrad to back down.

While I wish the process were cleaner and more straightforward, I am quite comfortable with this relative imbalance of power.  Nobody should mess with the full faith and credit of the U.S. government for any reason.  When there is an increasing focus on the U.S. deficit and the credit rating of the U.S. government, this only reinforces the importance of reassuring the world that the U.S. government honors its debts no matter what.  There are plenty of other legislative tools available to generate procedural leverage on other important policy issues.  I am glad that most Senators are smart enough and savvy enough to leave the debt limit alone.

(photo credit: Dodging Bullets by hao$)

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