GOP Future Determined in Financial Crises

Today, the United States government will shut down because Congress has failed to pass the necessary legislation to pay for its operations. On October 17, the United States government will be unable to borrow more money as the US debt will have reached the debt ceiling. This has happened because Congress has authorized spending without ensuring sufficient tax revenues and without increasing the Treasury’s borrowing capacity. These are serious but resolvable issues. The manner in which they are resolved, however, will determine just what happens to the Republican Party for years to come.

The fight over the funding of the government is one of the stupider battles the Republican Party has chosen to fight. In exchange for delaying the Affordable Care Act for a year, they will allow the government to operate until mid-December. The Democrats understand that delaying Obamacare is an attempt to kill the defining legislation of the Obama presidency and so will not allow that to happen. Moreover, what happens in mid-December? A budget? Another stop-gap? Further demands? No, the Democrats will not budge here.

On the debt ceiling, the matter is much more severe. One expects the Republicans to try to defund the ACA again if they fail with the government shut-down by holding the debt ceiling hostage. Without raising the debt ceiling, the US runs the risk of defaulting on its debt. US Treasury securities are the most sought-after financial instruments in the world because of their perceived safety and certainty. That may go out the window, increasing interest rates, undermining other economies and generally causing financial havoc. There are ways the president can avoid this without negotiating, though; the Fourteenth Amendment says the full faith and credit of the US will not be questioned. Maybe the debt ceiling is unconstitutional. Much of how this plays out depends on how the shutdown fight ends.

There are only a couple of ways that the shutdown battle can end. The Democrats can concede on Obamacare, which is painfully unlikely. The Republican caucus can come to its senses and pass a clean continuing resolution that does not address Obamacare — only slightly less painful here. Or Speaker John Boehner can pass a continuing resolution without addressing Obamacare by relying on Democratic votes and a few dozen of his more loyal troops. This is the likely outcome, and the result will be open warfare in the GOP.

As this journal has noted, the Reagan coalition is in the process of collapsing. The imperialists, small-government conservatives, social reactionaries and corporate welfare queens all have different interests and are coming apart. The GOP Washington establishment and the Tea Party grassroots don’t trust each other. When the continuing resolution passes with mainly Democratic support, there may well be a challenge to John Boehner’s speakership, which will likely weaken him further. He might even lose the job, and his replacement will be a hard right yahoo who will make government impossible for the next year or so.

Outside Washington, the Tea Party is going to start planning primary challenges to each and every GOP member who voted for the resolution. Meanwhile, the Chamber of Commerce crowd is going to circle the wagons to protect their legislators from such challenges. The result will be a lot of money spent in primaries next year that could have been spent against Democrats in the general election. Moreover, there will be a great many primary races where the winner is too bloodied to beat the Democratic nominee. The outcomes of these primaries will be mixed, but they will favor the hard right as that is who turns up to vote in primaries. The purge of the GOP moderates will continue, making the Republicans even more intractable.

And then the world will come to 2016. A moderate Democrat like Hillary Clinton (this journal has repeatedly noted the Clintons are really Rockefeller Republicans) will crush the likely far right nominee of the Republicans, especially after the next Congress proves itself less able to act than this one. October 2013 may be the month the Republicans lose the 2016 general election.