Yesterday, Politico published the House Freedom Caucus “questionnaire” which it described as pushing for “House rule changes.” The document does do that. But it also does a lot more. It seeks substantive commitments from the next speaker that would effectively send the entire country into a tailspin…..
The government will run out of money on December 11. Unless additional funding is approved before that date, the government will shut down.
The House Freedom Caucus wants the next speaker to commit to not funding the government at all unless President Obama (and Senate Democrats) agree to defund Obamacare, Planned Parenthood and a host of other priorities. This is essentially the Ted Cruz strategy whichprompted at 16-day shutdown in 2013. This would now be enshrined as the official policy of the Speaker Of The House.
The House Freedom Caucus wants the next speaker to commit to oppose any “omnibus” bill that would keep the government running. Rather, funding for each aspect of government could only be approved by separate bills. This would allow the Republicans to attempt to finance certain favored aspects of government (the military), while shuttering ones they view as largely unnecessary (education, health)
Just as a reminder, the House Freedumb Caucus is roughly 40 Congress critters who hold the balance of power as long as the rest of the House Republicans believe that maintaining in-group norm of only passing major legislation with only Republican votes is worthwhile. They are the power bottoms of the House GOP caucus.
But they are not intrinsically crazy if the goal of the Freedumb Caucus is to both protect their own ass and make it less likely for a Democrat to be elected to the White House in 2016. Extraordinarily destructive and cynical, yes, but they are not completely crazy.
The first goal of assuring their own re-election for most of the HFC is achieved if they can get out of the Republican primary. Right now the Republican primary electorate is extremely pissed at the “Establishment” Republicans as those Republicans have overpromised and under-delivered (ie they could not repeal Obamacare nor impeach Obama for making them think that he would take away all of their guns due to the Democrats controlling some veto points against maximalist Republican goals). Being a Republican who the Establishment (2nd DW dimension positive) hates is a good thing in the Republican primary in R+5 or redder districts. The few HFC in D+0 or bluer districts can only win in waves or due to local idiosyncratic circumstances. They’re irrelevant as long as the rest of the HFC controls the 218th vote.
This is fairly straightforward playing to the base.
Now the second contention that I’ll make that the HFC demands for a shutdown or default or far more likely large contractionary policies increases the odds of a Republican being elected is pure political science cynicism.
Right now, the US economy is still in a liquidity trap, and its growth has been mediocre (although job growth has been decent — better than mediocre but not great). The best estimates of the multiplier effect of deficit spending in a liquidity trap is the multiplier is above one. 1% of GDP reduction in deficit spending during a liquidity trap will shrink the economy by more than 1%. The converse is true as well.
Most of the predictive models for presidential elections have a lagging economic status variable. One of the more common variables is the GDP growth for either the 1st or 2nd quarter of the election year. If that GDP growth number is at or above average, the incumbent party gets a boost. If that number is below average or shrinking, the challenging party gets a boost. The bigger the absolute deviation, the bigger the net swing.
If there is a major debt fight in November and December whose resolution or near simultaneously but in no way shape or form linked to the resolution independent bill leads to half a percent or more of GDP reduction in government spending and transfer payments, the first quarter of 2016 will see an ugly GDP number as a multiplier increases the damage to the economy. It might not tip the country into a recession as the underlying “trend” growth rate may have been 2% or 3% so it would only be a reduction from that “trend” rate (yes, this is serious counterfactual thinking) but it would make the quarter worse than it has to be.
A truly bad 1st quarter of 2016 is amazing news for any Republican candidate who survives the shit show of the primary season. It would establish an electorate that may hate the Republicans but is dissatisified with the economy. The fundamentals would lean red even if their nominee is repulsive. This has worked as the great Republican insight of the past twenty years is that fundamentals (and map making) overpower competence and dominates assumed norms on blame. Responsibility is a sucker’s best and it is often advantageous to be cynical as hell as voters suck at properly attributing blame and thus can’t punish cynicism.
So, from the institutional point of view of members of the House Freedumb Caucus, a shutdown fight and the threat to default is extremely advantageous as it protects them in the next primary and increases the probability that they can achieve their policy and posturing goals in 2017 as an ally would occupy another critical veto point.