Mike Johnson's magic debt ceiling promise
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House Speaker Mike Johnson (R-La.) relied on an unclear, unrealistic and unenforceable promise on the debt ceiling to convince President-elect Trump and House conservatives to keep the government open.
- It worked.
Why it matters: Trump killed Johnson's Plan A because it didn't include anything on the debt ceiling.
- Democrats and 38 Republicans killed Johnson's Plan B because it did.
- Don't ask about Plan C: It lived a short, unhappy life, mostly confined to X.
- Johnson's Plan D survived because Republicans pretended the debt ceiling was in the agreement and Democrats know that it's not.
The Senate is poised to pass the bill as soon as Friday night after it overwhelmingly cleared the House, 366 to 34, in the evening. More Democrats (196) voted for it than Republicans (170); all the no votes came from GOP House members. One Democrat voted present.
Zoom in: In the end, the bill that carried bipartisan votes was the obvious one that had been staring at leadership for weeks.
- The government will be funded for three months.
- The White House and Democrats avoid a shutdown in Biden's waning days. They also finally get the $100 billion in emergency spending they have pursued for months.
- Republicans can claim $10 billion in economic assistance for farmers.
Between the lines: Trump officials have been quietly contemplating a deal on the debt ceiling for weeks, but they apparently only sprang it on Johnson in the last 48 hours. That doomed an agreement that was already on shaky ground.
Inside the GOP conference, there are broadly two views on the debt ceiling.
- Some Trump loyalists see the debt ceiling as a ticking time bomb, set to detonate in the middle of Trump's first year. The smartest thing to do, they say, is to defuse it now.
- But GOP hardliners think of the debt ceiling as a grenade that they hold. The pin is pulled. Don't make them drop it with more unfunded spending.
- The promise Johnson made gives the hardliners, in theory, what they want: $2.5 trillion in deficit reduction on mandatory spending for a $1.5 trillion increase in the debt limit.
Reality check: Privately, conservatives admit that ratio is too good to be true.
- Under current policy, the deficit is expected to come in at $1.9 trillion for fiscal year 2025, meaning Congress will need that $1.5 trillion pretty quickly.
- Extending Trump's tax cuts is expected to cost another $4 trillion over 10 years.
- Then consider the Trump-Vance campaign promise for tip earners, Social Security recipients and families, which will cost trillions more.
The bottom line: That will make extending Trump's tax cuts, not to mention legislating any new ones, very difficult to achieve if Trump and congressional Republicans are serious about cutting deficit spending.
- It also puts enormous pressure on Elon Musk to find some massive savings in mandatory spending programs, like Medicare and Social Security, that Trump has promised not to touch.
