I spoke to Jonathan Nicholson of the Huffington Post about the looming debt limit crisis awaiting the incoming House majority in the 118th Congress, and why this time is more fraught than ever.
“Instinctually pugilistic, prone to brinkmanship, and harder to corral” was how Liam Donovan, a principal with the lobbying firm Bracewell LLP, described the incoming class of House Republicans. “And with [former President Donald] Trump himself using the debt limit as a favorite sign of establishment fecklessness, this dynamic will only be magnified.”
The Republicans’ narrow five-seat margin over Democrats in the House means party leaders will be under intense scrutiny when the issue comes to a head, as “one false step” could lead to their ouster, Donovan said.
“But the real risk is that too often, Wall Street thinks this is all Capitol Hill kayfabe, and doesn’t react to the sort of legislative chicken that really should make them nervous,” he said.
In turn, Donovan said, this gives lawmakers a false sense of security, even as potential default draws nearer. “Absent some acute pain being felt in the markets or a selfless act from leadership, I don’t know how you’ll see the next showdown resolve.”
Read the full piece here.