Speed Reads

'a hostage you can't shoot'

GOP leaders, business groups reportedly spooked the GOP might force a debt crisis if GOP wins House

Republican leaders, congressional aides, and business groups are concerned that House Minority Leader Kevin McCarthy (R-Calif.) and his caucus will threaten to push the federal government into default in another 2011-style debt limit crisis if Republicans win the House in November, as many political prognosticators expect, Axios reports. The political climate in 2023, when Congress will next have to vote to raise the U.S. government's credit limit, is worse than in 2011, when Barack Obama was president, these Republicans warn.

"Speaker [John] Boehner and a hypothetical Speaker McCarthy are different animals," a former House Republican who served during the 2011 crisis tells Axios. "Boehner was convinced of the necessity [of raising the debt limit] and was willing to twist arms. I just don't know about a Speaker McCarthy." Business leaders and GOP strategists are watching especially carefully who McCarthy would tap to chair the House Ways and Means Committee, firebrand ally Rep. Jason Smith (R-Mo.) or more mainstream Republican Rep. Vern Buchanan (R-Fla.), Axios reports. 

Smith told Axios he thinks House Republicans could use the debt limit to force President Biden to undo much of his legislative accomplishments. "If Republicans are trying to cut spending, surely he wouldn't try to default," he said.

Rohit Kumar, a PwC executive and deputy chief of staff to Senate Minority Leader Mitch McConnell (R-Ky.) when McConnell and Biden negotiated a way out of the 2011 crisis, called another such debt limit standoff his "nightmare scenario." "Thinking that you can credibly threaten the full faith and credit of the federal government in exchange for some collateral demand is just wish casting," he said. 

"There's always this argument and debate about whether the debt limit is leverage," but "the reality is it's a hostage you can't shoot," Neil Bradley, chief policy officer for the U.S. Chamber of Congress, told Axios. "A government shutdown is like putting your hand on the hot stove and holding it there until the government reopens. Defaulting on the debt is a thermo-nuclear act that destroys all of Western civilization." 

The debt limit is a creation of Congress, and Congress could vote to end it. Read more about the 2023 fears at Axios.