Biden vs McConnell: the high-stakes poker game over US debt

Politics is complicated and people have short memories: two facts fundamental to the strategy employed by Republicans in the looming crisis regarding the US debt ceiling.

Unless you’re a masochist and derive pleasure from the thousand whip cracks of bureaucracy, the matter of the debt ceiling will rapidly wear you down with the parliamentary procedures of Congress. Yet the headline here is that Mitch McConnell and Republicans are playing a cruel game. Would they want to create a mess that Joe Biden will be unable to clear up? Well, of course, they would! They want to brand with one of those damning indictments that can prove fatal to a presidency – Trump had his impeachments and Biden would have the calamity of the US defaulting on its debt. Into that chaos would leap a newly slimline hero made for the moment, perhaps of an orange hue, promising to Make America Great Again… Again…

It might even be a winning strategy come the midterms and beyond, but does that translate into Republicans tanking the US economy for purely political ends?

Probably not. But we also can’t be certain. And that is where we are: in a poker game between Biden and McConnell, with the President leaning across the table and seeing if he can spot the Senate Minority Leader’s tell.

What makes Biden’s task harder is that America’s politics are still very much coloured by Trumpism. In normal times, the debt ceiling is too consequential and the effects of failing to reach an agreement too apocalyptic. It is usually an entirely procedural vote that passes with bipartisan agreement and it’s understandable why. Failure to reach an agreement on a new debt ceiling would mean the US government wouldn’t be able to borrow money and therefore pay for the commitments it has already made – including the huge increases in spending under the Trump administration. Republicans are effectively, then, seeking to break Biden over their own profligacy. The result would be a government shutdown and, potentially, an impact on the markets that would be felt well beyond the US borders.

If that sounds unlikely, consider again the two key facts: that politics is hard, and people have short memories. For every voter who understands the debt ceiling, the inner workings of Congress, and the Republican game, there will be ten who view it as a failure of the sitting administration. Would Republicans be happy to lose one vote in a hundred if their actions could cost Biden ten? Any calamity falls heaviest on the President.

It’s a cold political calculation but the result is unclear. Are gains in the midterms and then 2024 worth the wound this would inflict on America?

It’s unlikely but McConnell perhaps understands that the threat is enough to make Biden consider other solutions. The Republicans want the Democrats to raise the debt ceiling through “reconciliation”, a special procedure that wouldn’t require Republican votes. It is, however, a lengthy process and extremely involved.

Another proposed solution – fascinating, but extremely unlikely – is the minting of a trillion-dollar coin, which would then be deposited in the Treasury to pay off America’s debts. It sounds outlandish but the United States code on the minting of coins explicitly permits the striking of platinum bullion coins but, unlike coins struck from any other metal, there is no restriction on their denomination. It’s a loophole that most legal experts believe could be legally exploited, but it would still be an extraordinary measure that would allow Republicans to characterise the avowed conventional President as a man willing to break the rules. You know: exactly what Democrats accuse the former president of doing.

And that, ultimately, might be McConnell’s game. It’s about making governing difficult for Biden, throwing shade across the administration, and stirring up trouble for Democrats in Congress who might otherwise have been occupied with other work. It’s also about creating an atmosphere of anxiety around the President who has, thus far, managed to restore a sense of boring normality to the White House.

Even the debacle around Afghanistan has faded from memory and the US withdrawal ultimately plays to his strengths. The AUKUS controversy was well inside the field of international diplomacy, which rarely has any effect on domestic politics. Around COVID, initial advances have been pegged back a little but it’s still Biden and the Democrats who are aligned the closest with the scientific consensus. The President will certainly carry the bulk of public opinion behind him when the matter of abortion explodes, as it’s sure to do. Whilst Democrats have been adopting their usual strategy of undermining their own administration (the Joe Manchin/Kyrsten Sinema pantomime is peak and predictable nuttery), not much has been done to shift the consensus that Biden is doing a solid job.

Except now he’s in the middle of a crisis, which might not be of his making, but affects how people perceive his presidency. It’s a spoiling tactic that already might work, because politics is extremely complicated, and people do have very short memories.