The Deal Is Done!

Who won? Who lost? What does it all mean? Plus, why "better messaging" isn't really a thing.

I’m Michael A. Cohen, and this is Truth and Consequences: A no-holds-barred look at the absurdities, ’ absurdities, hypocrisies, and surreality. If you were sent this email or are a free subscriber and would like to become a paid subscriber, you can sign up here.

Contrary to my earlier expectations, House Republicans struck a deal on Saturday night with President Biden to raise the debt limit. While final passage is not guaranteed, it would be shocking if House Republican and Democratic leaders cannot cobble together enough votes to get the legislation passed.

The top line elements of the deal are a two-year increase in the debt limit — past the 2024 election — a freeze on non-military and veterans spending, and some cosmetic changes to the SNAP program. In fact, because it lifts previous restrictions for veterans and homeless Americans, it’s possible that the deal hashed out by Biden and McCarthy will actually expand the universe of SNAP beneficiaries. 

The White House’s major concession was a reduction of $20 billion in funding for the IRS. That money will be allocated to domestic spending programs that otherwise would have been cut, and according to the latest press reports that I’ve seen, future IRS funding will be reallocated to this year and next year. There are no cuts to Social Security or Medicare, and Biden’s major legislative achievements in getting more funding for education, child care cancer research, and climate change spending are untouched.

While we still need to get all the details about the final agreement, from the White House’s perspective, this deal appears almost too good to be true. It’s exactly the type of budget deal one might expect a Democratic President to make with a Republican-controlled House. And because this deal is nominally a budget agreement, it means that the country not only avoids a debt default but also a government shutdown at the end of the fiscal year this Fall. 

So why did it unfold this way?

First, it seems McCarthy blinked. He could have played legislative hardball and walked away from the talks, daring Biden to go the 14th Amendment route. Why he didn’t is an interesting question and one that it’s too early to answer. It’s possible that he believed Biden when he said he had no intention of acting unilaterally to raise the debt limit, or maybe he really wanted a deal. If you squint really hard, this deal makes McCarthy look like a serious DC player. But whatever the explanation, it does seem that he was unwilling to truly push the envelope in these talks.

Second, the conventional wisdom (which I am guilty of parroting for the past few months) that McCarthy could not/would not make a deal with the White House for fear of losing his job as Speaker was simply wrong. McCarthy might still lose his job (though I doubt it), and the House Freedom Caucus is none too happy about the deal, but he’s not acting like a guy who is afraid of their wrath. It appears he feared a debt default more than a motion to vacate, which could lead to his replacement as Speaker.  If correct, this would upend another piece of conventional wisdom: that Biden had far more to lose from default than McCarthy. Quite clearly, McCarthy found the prospect of potential default unpalatable enough that he made a deal with the White House in which he got 20 cents on the dollar.

Third, McCarthy has a better feel for his own caucus than many analysts assumed. It’s very hard to imagine that he made this deal if he thought it would cost him his speakership. Perhaps McCarthy’s takeaway from the January Speaker fight was that the House jihadist caucus talks a bit game but ultimately lacks the intestinal fortitude to see things through. Even now, if there is a motion to vacate and at least five House Republicans go along with it, there’s no obvious replacement for McCarthy. 

Fourth, I’ve been a frequent McCarthy critic, but he deserves his due on this one. Earlier this year, I wrote a piece arguing that House Republicans were approaching the debt limit fight with few actual policy demands. It seems they preferred taking the hostage more than getting something in return. In retrospect, perhaps that was always the point. McCarthy needed a showdown — and narrowly avoiding default — in order to convince his caucus to raise the debt limit. Without such a fight, then it would look like Republicans were simply folding. So we had to go through this manufactured five-month crisis to give Republicans cover and reach, what is, in the end, a rather normal legislative compromise. In that sense — and assuming McCarthy survives as Speaker — he played a weak hand well.

In addition, the turning point in this fight came when McCarthy passed legislation in the House to raise the debt limit, matched with a set of ludicrous demands that the White House would never accept. But once that bill passed — to the surprise of Democrats — it put the ball in Biden’s court to negotiate with the House GOP, which he then did. Without that legislation, I’m not sure this deal gets made. 

Fifth, let’s not go too crazy here. By agreeing to a two-year debt limit increase, past the 2024 election, and making a deal on the budget, McCarthy has surrendered the last vestiges of the House GOP’s political leverage. For the next 18 months, the House will pass bills that will go nowhere in the Senate, and ultimately, House Republicans will have to compromise in order to get anything done in Washington. They can’t play hostage-taking anymore. For a caucus more focused on Hunter Biden’s laptop than governing, maybe that’s fine with them, but it’s pretty striking to see a House leader relinquish his leverage this early into his term. 

Sixth, President Biden is a baller. I got a bunch of stuff wrong about McCarthy’s strategy, but one part I got right was that Biden’s repeated refusal to publicly endorse the 14th Amendment put the burden on House Republicans to make a deal. The GOP had to believe that Biden would not act unilaterally, and it appears they did.  I’ll be curious to know what the history books say about Biden’s true intentions on the 14th Amendment. It’s hard to believe he wouldn’t have gone that route if his back was to the wall. But ultimately, it didn’t matter. But by sticking to his guns on not wanting to invoke the 14th Amendment, he forced the GOP to negotiate — and it worked. 

Seventh, this is a huge political win for Biden. The president’s biggest political advantage is that Americans see him as the adult in the room and someone who is willing to work across the aisle to get things done.  This deal is more of the same. Some progressives will be upset that he legitimized GOP’s hostage-taking by negotiating on the debt limit (and they have a point), but the vast majority of Americans could care less.  Biden won in 2020, in part, because he was the antithesis of Trump’s drama-filled politics. This deal is yet one more example of him winning by turning the political heat down.  There will be no default, no gimmicky unilateral moves that relied on Supreme Court approval, and no government shutdown in the Fall. In an era of such intense political polarization and even partisan hatred, Biden is a throwback. That’s a winning message for 2024.

The Messaging Myth

There’s a larger lesson to glean from Biden’s strategy — and I want to go back to something I wrote on Friday but didn’t publish. It was a response to an article in Politico on House Democrats complaining about the White House’s messaging strategy on the debt limit.

The void left by the White House this week — Biden spoke very briefly before Monday’s meeting with McCarthy and made fleeting remarks Thursday — has frustrated Capitol Hill Democrats who believe Biden’s team is allowing Republicans to define the debt ceiling debate on their terms.

“It’s time to bring the president off the bench, or bring somebody off the bench. No one’s responding to anything. Kevin’s consistently on message,” said one House Democrat, who was granted anonymity to speak freely. “We have the Oval Office. I’ve never seen anything like it.”

Several Democrats on Thursday called for Biden to deliver a national address on the state of the debt talks this week, amid widespread worry the White House has not done enough to emphasize the stakes of a default.

“The scale of the cuts is staggering, which really the public knows very little about,” Rep. Rosa DeLauro of Connecticut, the top Democratic appropriator, said of the GOP’s demands. “The president should be out there.”

…. “They need to use the power of the presidency. I don’t buy this argument that [public silence] helps the negotiation,” said Congressional Black Caucus Chair Steven Horsford (D-Nev.). “I need the American people to know that Democrats are here fighting, working, prepared to reach an agreement to avoid a default and only the White House, the president, can explain that in this moment.”

This is the myth of “better messaging,” and it needs to die.

Rather than take the comments of Democratic members of Congress to heart, let’s follow their arguments to their logical conclusion. Would a presidential address to the nation have changed the fundamental dynamics of the debt limit fight? The answer is almost certainly no. Even if better messaging from the White House had a catalytic effect on public opinion — and tilted the playing field toward Democrats — it likely would have had little to no effect.

First, presidential addresses on legislative or procedural issues rarely have a sustainable impact on public opinion. There’s ample political science research that shows the presidential bully pulpit can serve as an effective tool when it comes to foreign policy or matters of war. But on domestic policy and, in particular, legislative issues, voters tend to filter these messages through the prism of their partisan preferences. Democrats listening to Biden will agree with him. Republicans won’t. This is even more true in a time of intense political polarization.  Rather than soften the views of Republican voters, a Biden address would likely harden them —in opposition. Perhaps Biden might move a few undecided or persuadable voters but with minimal political benefit. The overwhelming majority of House Republicans are in relatively safe districts. Their biggest fear is not losing an election to a Democrat but instead facing a primary challenge from the right. A shift in public opinion against the GOP’s hostage-taking simply isn’t going to change their political calculus because the voters they most rely on support their actions. 

For the handful of House Republicans in competitive districts, the calculation isn’t much different. For now, they’re also concerned about a primary challenge. So, by and large, they are going to follow the lead of House Speaker McCarthy because there’s no real advantage for now in getting out ahead of the rest of the party on the debt limit (and keep in mind that most of them already voted for congressional legislation that called for major spending cuts in return for avoiding default). There’s a reason that since January, moderate Republicans have largely sided with McCarthy on this issue. Democrats might get some benefit from acting like the proverbial skunk in the room (see Joe Manchin), but for Republicans, loyalty and toeing the party line is usually the better approach.

But because these Republican members may face a tough reelection fight, they are already more inclined to compromise on the debt limit than other Republicans. A Biden speech, no matter how effective, isn’t going to move them all that much. In short, the battle lines on the debt limit are well-established and, at the 11th hour, are not going to change. 

There’s another consideration as well. Biden is trying to negotiate in good faith with Republicans. That means building rapport and trust with him. If he’s out giving speeches dumping on them, then it makes it more difficult to find common ground. Biden’s decision to remain silent might have aggravated Democrats, but it likely made it easier for Republicans to trust him and make a deal. And considering the limited benefit of more vocal messaging, Biden almost certainly chose the better path.

None of this is to say that messaging never matters. Obviously, it plays an outsized role in elections — both in persuading the small number of swing voters in the electorate and also (and perhaps most important) mobilizing partisan supporters.  Occasionally, an effective messaging fight can matter on matters of public policy. The consistent GOP attacks on Obamacare undercut support for the legislation and mobilized Republican voters against it. The same can be said for the Democratic attacks on the Trump tax cuts, which were deeply unpopular. But even these examples of effective messaging didn’t stop Democrats from passing Obamacare or Republicans from cutting taxes. In both cases, the political incentives for both parties to pass even unpopular legislation were simply too strong.

Particularly in an era of intense polarization and vanishing numbers of persuadable voters, the parties are much more wedded to the interests of their party constituencies than the fuzzy middle of the electorate (there is really no better example of this than gun control, an issue on which 80-90 percent of Americans disagree with the GOP, but because a small and vocal constituency in the party opposes any effort to make guns more difficult to obtain, the Republicans continue to adhere to a deeply unpopular position).  We tend to think of elected officials’ political incentives as defined by what happens on a level playing field of Democratic, Republican, and independent voters. But that’s not the reality. For most members of Congress, the field is tilted.

But there’s an even bigger difference between these fights and the debt limit. In the case of Obamacare and the Trump tax cuts, Republicans and Democrats were united in opposition. The messaging fight was largely intended for what came after legislation passed, not during. In the debt limit battle, better messaging would theoretically strengthen the hand of one side over another. But for the reasons noted above, it likely wouldn’t shift the fundamental political incentives.  In short, better messaging has its place, but it is not a magic elixir. It rarely changes public opinion all that dramatically, and even if brilliantly compiled and articulated, it’s unlikely to move members of Congress in one direction or another.

And here’s the final and crucial point. Even with Biden’s refusal to embrace “better messaging,” Republicans still feared default enough to embrace a deal that is far less than they wanted!  The Democrats calling on Biden to get out and use the bully pulpit ultimately were wrong. The president and his party did pretty well, even with Biden largely keeping his mouth shut.

I hate to be that guy, but the fact is, most of the stuff that political pundits tell us matters the most in politics actually doesn’t matter all that much at all.

Musical Interlude