The Republican Party has changed a lot over the last half-century, and nowhere is the transformation more obvious than during debt ceiling debates. In recent weeks, GOP leaders have demanded a variety of things in exchange for raising the borrowing cap. Yesterday, House Majority Leader Eric Cantor called for a one-year delay in Obamacare. Speaker John Boehner, on the other hand, seems to prefer major spending cuts.
Such demands are not new -- debt limit debates have always featured a lot of bipartisan bluster. And Republicans, in particular, have repeatedly used them to highlight demands for lower spending. But once upon a time, Republicans also used a debt limit vote to call for something else: a tax hike.
In May 1967, House Ways and Means Chair Wilbur D. Mills asked his panel to approve a large increase in the debt ceiling. Just two months earlier, Congress had agreed to a modest $6 billion hike, but now the Treasury was back asking for more. Specifically, the Johnson Administration wanted a new ceiling of $365 billion -- a giant step up from the existing permanent cap of $285 billion, and a sizable increase even from the temporary limit of $336 billion. (Congress had not raised the permanent limit since 1959.)
Ways and Means approved the new limit on a party-line vote. Democrats insisted that the additional borrowing increase was necessary, but committee Republicans were unconvinced. Current budget problems were the direct result of Democratic overspending on "guns, butter and jam," they complained in their minority report.
- A Democrat administration and a Democrat-controlled Congress have proceeded on the assumption that there is no deficiency in our society which the Federal purse and the heavy hand of Federal regulation could not cure. We have seen each piece of legislation beget more legislation, each new expenditure by the Federal Government beget other expenditures.
Republicans called for austerity, by which they meant spending cuts. But they also suggested that a tax hike might be necessary. "While no one likes to increase taxes, yet an increase must be considered as a step toward reducing both the deficit and the need for an additional $29 billion in borrowing authority," they wrote.
In other words, taxes were bad, but debt was worse.
Republicans justified their "no" vote on the debt limit as a form of desperation. "The failure of the administration to meet its obligations to the American people leaves us no course except to oppose this bill," they wrote. "It is the only recourse left to us. Only by this means can we bring about a reappraisal of expenditures and revenue needs in the light of a threatened budgetary deficit which is intolerable."
When Mills brought the debt limit to the House floor on June 7, he didn't expect any serious trouble. But he was in for a surprise. A united Republican caucus convinced 34 Democrats -- including numerous Southern fiscal conservatives and a few Northern antiwar liberals -- to join them in voting down the debt limit increase. The bill failed by a vote of 210 to 197.
The defeat was stunning, especially since it marked the first outright rejection of a debt limit increase by either house since the ceiling was first established in 1917. It was also a major embarrassment for Mills, who hadn't suffered a floor defeat on a committee bill in nearly a decade.
Indeed, Mills seemed a little stunned. Asked by a colleague what he planned to do, Mills responded with a simple "I don't know." When told he had to do something, he grew impatient. "You only have to die and to pay taxes," he snapped.
Many newspapers were critical of the House vote. "Voting against the lifting of the debt ceiling is a time-honored -- and politically painless -- means of protesting against the rapid growth of federal expenditures," The Washington Post noted in an editorial. "But it is also disingenuous inasmuch as those who vote against higher debt often lack the courage to vote against the appropriations that make higher debt ceilings necessary."
Conservative papers, on the other hand, were generally pleased by the vote. "The purpose of a limit is to limit," intoned the Chicago Tribune. "If the debt limit has become meaningless, as some charge, it is only because Congress has made it so by meekly raising the limit every time it began to get in the way of government spending."
Republican lawmakers hoped to leverage their victory to force major spending cuts from the Democratic majority. House Minority Leader Gerald Ford told reporters that domestic spending could be cut by $4 billion in the next fiscal year, although he declined to identify specific reductions.
But Republicans were destined for disappointment. Democratic leaders introduced a compromise bill raising the debt ceiling by almost the same amount as the original bill. But it kept some of the increase classified as temporary, and that minor change placated enough Democratic conservatives to put together a workable majority. Fifteen of the Democratic defectors on June 7 returned to the fold, and the new bill passed the House on June 21 by a vote of 217 to 196.
Republicans remained steadfast in opposing the higher debt limit, complaining that the new bill was only the barest of improvements on the old one. And any talk of GOP support for a tax increase evaporated when Democrats found a way to move forward without engaging GOP calls for sweeping fiscal reform.
Still, the 1967 debt ceiling crisis was notable for the relative moderation of GOP fiscal conservatives. Then, as now, most Republicans were deeply unhappy with the trajectory of federal spending. And then, as now, they hated most tax increases. But Republicans were even more worried about the steady rise of federal borrowing in the postwar decades.
Worried enough to consider a tax increase, at least for a while.