Debt Limit Chicken

Why Washington Plays Games with Disaster

For the last several months, Congress has been playing chicken with the U.S. debt limit. 

In January, for the third time in the past 13 years, the U.S. hit the legal limit on how much the government can borrow. Without a deal between Congress and the White House to increase the debt ceiling, the United States will default on its debt sometime this summer – an unprecedented disaster that would have far-reaching and devastating effects on the American and global economies.

Just like in 2011 and 2013, Washington will hopefully find a way to avoid disaster. Whatever happens, one thing is certain: Brinkmanship and crises aren’t random accidents in our democracy – they are inevitable outcomes of an electoral system that incentivizes and rewards them.

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Base-ic Instinct

Part of the reason that Washington is motivated to fight but not compromise is that the overwhelming majority of congressional districts are not competitive between the two parties. Fix Our House recently published a report on the latest congressional redistricting cycle, finding that 90% of House elections last fall were decided by a margin greater than five percentage points. About 83% had a margin greater than 10 points. Landslides are normal; the average margin of victory in 2022 was 27.7% for Democrats and 30.2% for Republicans.

This means most representatives are more incentivized to focus on the interests of primary voters, donors, and other stakeholders and influential voices within their party than on the interests of groups outside their party.

And that’s what has played out since the U.S. hit the debt limit on January 19. The clock has been ticking on the need for a deal to stave off the risk of default, but there has been no sense of urgency from Congress or the White House to meet, negotiate, and address the problem. 

From a political perspective, their logic is sound. House Republicans have little incentive to act quickly and work out a deal with the White House, when that could appear to their base like working with the enemy. But they are incentivized to take time to craft their own bill with only their own priorities in it, to prove to their voters and supporters that they are rock solid on conservative principles and are tough on the Democratic president. 

And of course, the opposite is true for House Democrats, the overwhelming majority of whom also come from districts that are safe for their party. Maybe some of them have concerns about the budget or the size of the debt, or could at least find areas of compromise with Republicans. But they have no incentive to compromise when doing so would be seen by their base as giving up ground to the enemy.

The Five Families

Much has been written recently about the “Five Families” in the Republican Party – the five major caucuses that wield power and influence in the Republican-controlled House. They are, in order of size: 

As with the rest of the House, the overwhelming majority of the members of the Five Families don’t face competitive general elections. The average margin of victory for the members of each major caucus was a blowout election. And the average Partisan Voting Index – a measure created by the Cook Political Report to show how much more conservative or liberal a district is than the average district – reveals a similar pattern. The average member of each of these caucuses comes from a relatively “safe” congressional district for their party.

In districts like these, the potential to be primaried is a much greater concern than a general election challenge from a Democrat. Putting forth ideas that could gain popular support from a broader number of Americans – for instance, working to quickly raise the debt limit and ensure that we avoid risking the economy – isn’t necessarily politically sensible if it risks alienating the base.

When looking at the whole distribution of Republicans in each major caucus, we see how few of them are incentivized by a competitive general election to make appeals beyond their own party:

Only the Problem Solvers Caucus has a substantial percentage of its membership come from competitive districts. One third of its Republican members were elected in competitive contests – far more than the other caucuses. It’s no coincidence then that they are members of a caucus that aims to work with Democrats and hash out areas of compromise. These Problem Solvers are incentivized to build a coalition to win their general election that may include voters beyond their own party, and they are incentivized to act accordingly while in Washington. 

In an uncompetitive district, the political consequences of compromise can be career-ending, while the result of political grandstanding – even a reckless game of debt limit chicken – is likely another term in office. In a competitive district, the opposite is more likely to be true.

It's the Electoral System, Stupid

Compared to most democratic countries, the United States uses single-winner districts to elect its House. Every one of our 435 congressional districts has just one representative, chosen under plurality election rules where the winner simply needs to get more votes than anyone else in order to win.

This dynamic justifies stubbornness and recklessness – like playing chicken with the debt limit. It’s about beating your opponent and demonstrating that they have nothing to offer. This is how our system of electing Congress collapses our big, diverse country into just two hyper-partisan political parties caught in a doom loop of hatred and gridlock.

But single-winner districts are not inevitable, and they are not in the Constitution. In fact, Article I, Section IV of the Constitution specifically empowers Congress with the ability to change how its elections work, something Congress has done many times. The U.S. has the power to adopt proportional representation, a system where a political party’s share of votes in an election determines how many seats it holds in the legislature. Instead of each district electing one representative, a state divides into larger regions that each elect several representatives:

In terms of governing, proportional representation would make it possible for conservatives in liberal areas and liberals in conservative areas to be elected. Every election would be competitive, as there would be a real chance for both Republicans and Democrats to win seats in every contest.

Crucially, proportional representation would also create new ways to form coalitions. With a broader range of ideologies across both parties – and across new parties that would now have a realistic chance to compete – bargaining and compromise would be more possible. The impact on an issue like the debt limit is clear: representatives lose the incentive of taking every opportunity to attack the other side, and would be newly incentivized to come together and find solutions. 

Some of the most ideological representatives would still surely see the debt limit as a cause for existential battle, but there would be more opportunities to build coalitions that don’t involve this contingent. Raising the debt limit would become what it should be: a basic task of governing to be handled efficiently and moved on from. Not a political weapon to beat your opponents with.

It may be tempting to blame individual members or to debate the merits of differing fiscal policies, but this debt limit crisis is a predictable result of our fundamentally flawed electoral system – one that rewards toxic partisanship and punishes compromise. America’s winner-take-all elections incentivize the us-vs-them conflict at the heart of the debt limit issue and disincentivize the cooperation it would take to solve it. Thanks to the ever-escalating doom loop of polarization and dysfunction, the problem is worse than ever and will only grow more intractable. If we want to address this systemic problem, we need to look at systemic solutions. Otherwise, we’ll find our representatives playing debt limit chicken again and again – and eventually, they might run into each other. 

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