Why Are Schumer and Pelosi Doing Deals With Trump?

This article first appeared on Dorf on Law.

The big political story last week was that Donald Trump had sided with Democratic leaders Nancy Pelosi and Chuck Schumer in negotiations over the debt ceiling and the timing of the 2018 federal budget.

Predictably, political journalists were soon inundating the internet with thumb-sucking analyses, trying to guess what it all means.

Is Trump going rogue?

Is the rich kid from Queens returning to his outer-borough routes by joining up with Brooklyn's Schumer?

Has Trump soured so badly on Republican congressional leaders that he will now return to his days as something of a Democrat?

What explains the " swerve "? Inquiring minds want to know.

The answer to all of those questions is, of course, that no one has any idea what is going on. This is Donald Trump that we are talking about, after all.

What does still matter is the substance of the agreement that Trump blessed and, more importantly, whether subsequent reports are true that Trump and Schumer have agreed to repeal the debt ceiling in December.

If so, that would truly be a historic event, removing one of the most pointless, yet malicious, laws on the books once and for all. It would be good for Trump, good for Congress, good for the country, and good for the world.

Which makes it all the more amazing that the debt ceiling has not already been ditched.

But it also raises the question of what Schumer and the Democrats are currently thinking. The debt ceiling is a terrible law, but its terribleness only became obvious after Republicans in 2011 discovered that it could be used as a tool of obstruction.

GettyImages-843948380 (1) U.S. Senate Minority Leader Sen. Chuck Schumer (D-NY) makes a point to Donald Trump in the Oval Office, September 6, 2017 in Washington, DC. Trump struck a deal at the meeting with Sen. Schumer and House Minority Leader Rep. Nancy Pelosi (D-CA) to fund the disaster relief for Hurricane Harvey, raise the debt ceiling for three months and keep the government open through the end of December. Alex Wong/Getty

It is, moreover, an incredibly dangerous tool of obstruction, which makes it all the more potent in hostage negotiations.

Given how little power Democrats actually hold right now, then, it is more than a bit surprising that they would be willing to give up the one powerful tool that they possess.

Is Schumer doing this because he is naive?

No, he in fact clearly knows how potent the debt ceiling is. As strange as it is to say, it appears that Schumer might actually be doing the right thing for the right reasons. That would be a story!

To recap a bit, the negotiations last week involved Republican leaders' demands that the debt ceiling be suspended or increased to prevent it from having any effect for eighteen months, whereas Democrats countered with three months. Republicans scoffed.

As I wrote the day after Trump intervened, it was not at all clear why the Republicans were freaking out after he blindsided them.

It was, of course, obvious why the Republicans wanted an eighteen-month deal, because that would have pushed the return of the debt ceiling past the 2018 mid-term elections, freeing the Republicans from the ordeal of trying to get their own craziest members to agree to increase the debt ceiling during an election year, when they will be in their full-pander glory.

If the choice were between three months and eighteen months, then, it is easy to see why Republican leaders were angry with Trump for agreeing to three months. As I argued in my column, however, those were by no means the only two choices.

After all, the Republicans were not guaranteed to get the Democrats to agree to eighteen months, even if Trump had not intervened. Anything short of fifteen months would have been problematic as a matter of electoral timing for the Republicans.

Knowing this, what if Democrats had simply said no to anything more than thirteen months without extreme concessions by Republicans?

More to the point, what if Democrats had simply refused to play ball at all, leaving it to Republicans to pass the debt ceiling increase later this month (or early in October), when the drop-dead date would have hit?

By recent standards, the now-completed negotiations had begun early, long before we were in oh-my-God-we're-all-gonna-die-this-is-not-a-drill mode.

In short, the three-month deal was not what Republicans wanted, but it merely moved the next crisis from a few weeks from now to a few months from now. This makes it rather difficult to take claims like this (from a New York Times story ) at face value:

By postponing larger questions of government spending and the debt ceiling until December, [Republicans] said, [Trump] simply gave Democrats weapons to use to hinder or force concessions on the tax overhaul legislation which may be coming to a critical debate around that time.

Again, what if Democrats had said: "Three months or we walk away right now"? That would "hinder or force concessions on" other legislation that Congress was already facing in an overfilled calendar this month.

They could even have used their current leverage to impose conditions on the Republicans' beloved tax legislation (which does not exist, but Republicans are protecting it all the same).

I thus continue to think that the political angle on these stories is pure horse-race politics—Democrats won the immediate thing that they wanted, and Republicans lost—rather than a serious consideration of what was truly at stake.

And my point of view received an unexpected boost when, as I noted above, The Washington Post reported the next day that Trump and Schumer had reached a "gentleman's agreement" to "pursue a deal that would permanently remove the requirement that Congress repeatedly raise the debt ceiling."

The two men, "along with House Minority Leader Nancy Pelosi (D–Calif.), agreed to work together over the next several months to try to finalize a plan, which would need to be approved by Congress."

Will Republicans go along, as almost all of them meekly did when the vote for the three-month deal was finalized last week?

The Republicans say that they are against doing so. The always-dishonest Eddie Haskell of the Republican Party, Speaker Paul Ryan, said that he opposes such a move: "I think there’s a legitimate role for the power of the purse of the Article 1 powers, and that’s something we defend here in Congress."

Of course, Ryan also thinks that it is perfectly fine to defend Congress's power of the purse for the next eighteen months without a debt ceiling; and if he is still Speaker in 2019, he would surely want to avoid having to beg his craziest members for debt ceiling votes on an ongoing basis.

But as a matter of habitual smarminess (and probably also planning for his future as the House Minority Leader), Ryan apparently could not stop himself from lapsing into being a hypocrite.

Not that Ryan is alone in making claims about the debt ceiling that are detached from reality. The leader of one of the big deficit-scold groups, Maya MacGuineas, wrote an op-ed in the Post that actually said this:

Given that the debt ceiling is the only real check on borrowing, tossing it out without any plan for restraint would continue the fiscal free fall we are already in.

In one sentence, MacGuineas actually managed to say exactly the opposite of the truth, on multiple levels.

As an initial matter, the U.S. is simply not in "fiscal free fall." Long-term projections show rising debt-to-GDP levels, but they do not show anything that could be described as an out of control path.

"Debt projections that I do not like" are not the same thing as a free fall. But that is standard hackery from people in the debt-panic business.

More to the point, the debt ceiling is not a check on borrowing at all. As Michael Dorf and I have shown, the unpaid bills that would pile up during a debt ceiling-induced default are very much debt, which means that the existence of a debt ceiling does not in fact prevent debt from increasing.

Most importantly, however, the blithe assertion that the debt ceiling is "the only real check on borrowing" is not merely laughably wrong, it is the kind of wrong that should get a person thrown out of any serious conversation with adults. It is like saying, "The only way that we can prevent that tub from overflowing with water is to put a screen over the top of the tub."

The fact is that Congress's Article I power of the purse is the real check on borrowing. We will always borrow as much as is necessary to bridge the gap between Congress's decisions about how much to spend and how much to tax.

If we do not like how much we are borrowing, that is the one and only way that we can change the situation. That is the "real plan for restraint" that the Constitution provides.

That is why Trump deserves some actual credit here. He is doing something that simply makes sense. Why would a president—any president—want to work under a system in which Congress can pass mutually inconsistent laws regarding spending, taxing, and borrowing, leaving the president to deal with the fallout as he faces the impossible task of obeying all of Congress's edicts?

But the real puzzler here, as I noted at the beginning of this column, is whether Schumer and Pelosi are heroes or fools. As I wrote in a column last month, in which I described what the Democrats' choices would be as the next debt ceiling crisis loomed:

If I were advising the Democrats, I would have a difficult time not telling them to sit tight and let the Republicans destroy themselves.

This further means that Democrats should do exactly what they criticized the Republicans for doing from 2011 through last year, which is to insist on policy concessions for any votes to increase or suspend the debt ceiling. 'Do you really want our votes? Well here's what we want.'

Even so, I offered a somewhat contradictory thought:

If I were a Democratic officeholder, however, I might well ignore my own political advice and vote for sanity. The consequences of a default are simply too horrible. But even in a more responsible frame of mind, it would still make sense to make some demands and play at least a bit of brinkmanship, because the Republicans are the ones who would need my vote.

It is still likely that Schumer and the Democrats will use their negotiating power in December to their advantage—as they would have this month, if the current deal had not been struck.

Schumer has said that he was very aware of a need for "leverage," and the debt ceiling certainly provided that to Democrats—but only because the Republican majorities in both houses include sufficient numbers of fools who love the debt ceiling.

The more interesting question is whether Schumer and Trump will carry through on their deal to make the debt ceiling go away for good. This will involve forcing Ryan and Mitch McConnell to allow votes in the House and Senate, respectively, but maybe they will do so, just as they allowed the vote on last week's deal (which they hated).

And if the debt ceiling finally goes away, it will almost certainly never come back.

No president would ever sign a bill that created a debt ceiling, knowing what we know now, and it is very difficult to imagine a situation in which veto-proof majorities of both houses could override a veto.

That means that Schumer is contemplating doing something that can be described in one of two ways. He might be committing political malpractice, unilaterally disarming in a situation in which he has virtually no other weapons.

On the other hand, maybe Schumer is a genuine patriot. After all, Republican leaders are still so drunk from drinking their own kool-aid and creating unnecessary debt ceiling crises that they are unwilling to do the right thing even when doing so is to their own political advantage.

Yet even in the face of all that, Schumer might induce the Democrats to agree that some weapons are simply too dangerous and need to be deactivated. If that is political malpractice, then maybe we need a bit more of it.

Neil H. Buchanan is an economist and legal scholar and a professor of law at George Washington University. He teaches tax law, tax policy, contracts, and law and economics. His research addresses the long-term tax and spending patterns of the federal government, focusing on budget deficits, the national debt, health care costs and Social Security.

Join the Discussion