The Jedi Council’s Debt-Ceiling Plan

by Jonathan Strong
They got the sequencing they wanted; now we’ll see if they can get the budget reforms through.

Every week on Representative Steve Scalise’s calendar, there’s a meeting with an unusual name: “Jedi Council.” Scalise, the chairman of the Republican Study Committee (RSC), is the newest member of a group of House Republicans who are helping to craft the GOP’s strategy on budget fights.

About two-and-a-half years ago, representatives Paul Ryan, Jeb Hensarling, Tom Price, and Jim Jordan began meeting once a week when Congress was in session, usually in Hensarling’s Capitol office — he was then No. 4 in the House leadership — and usually first thing in the morning. When Scalise was elected RSC chairman in November, they asked him to join the Jedi Council.

This was right after Obama’s reelection, and in the following weeks the GOP conference nearly collapsed entirely, as Democrats handed Republicans their hats in the “fiscal cliff” negotiations. Looking ahead to the debt-ceiling increase, the Jedi Council worried that taking on Obama at the apex of his political power could end in disaster.

“There was a feeling from the five of them that if they had a debt-limit fight in February, it was inevitable that they were going to lose,” says a prominent conservative with knowledge of their deliberations.

The group formed a plan to “re-sequence” the budget fights to give the GOP more leverage. The idea was to punt on the debt ceiling for a while, let the automatic sequester cuts go into effect, pass the GOP’s budget, and then gear up for a big debt-ceiling brawl in the summer.

On the morning of the last day of the GOP’s January retreat in Williamsburg, Va., the Jedi Council met with Speaker John Boehner and the rest of the House leadership and struck a deal. The agreement, which rank-and-file Republicans reverently describe as the “Williamsburg Accord,” began with re-sequencing: In exchange for allowing a short-term debt-ceiling increase, House Republicans would make the modest demand that the Senate pass a budget for the first time in four years.

But the accord also included a promise from leadership to pass a budget that would come into balance within ten years, and to make enacting the reforms in that budget a goal of the debt-ceiling fight — priorities that had just been laid out in an open letter 40 conservative leaders had sent to House leadership. What has not been understood is that the Williamsburg Accord was as much an agreement between the Jedi Council and Boehner as it was between the Jedi Council and the conservative movement.

On January 15, the day before the Williamsburg retreat, Michael Needham, the CEO of Heritage Action for America, the lobbying arm of the Heritage Foundation, and Chris Chocola, a former congressman and now president of the Club for Growth, attended the Jedi Council’s weekly meeting on behalf of outside conservative groups. (Needham was physically present; Chocola was listening on speakerphone.) Ryan did most of the talking, explaining how starting a debt-ceiling fight in February would be suicide. Needham and Chocola weren’t thrilled, but they were willing to trust him. They wanted a push to balance the budget in ten years. The Jedi Council agreed, and, with the blessing of the outside groups, took the proposal to Boehner.

According to Wookieepedia, an online encyclopedia of the mythology of the Star Wars films, the Jedi Council is “a group of twelve wise and powerful Jedi Masters who were elected to guide the Order” — the Order being, of course, the Jedi Order, an “ancient monastic peacekeeping organization unified by its belief [in] and observance of the Force.” If the fact that the five lawmakers named their group after a piece of Star Wars trivia doesn’t convince you they are nerds, you may be interested to learn that they once posed for a photograph wielding toy lightsabers. (The author’s efforts to obtain this image, which is in the possession of petrified Jordan aides, were unsuccessful — for now.)

The House’s Jedi Council is unusually secretive. No aides are permitted to attend their meetings. At their June 13 meeting, they decided not to give interviews about the group, amid concerns that doing so could interfere with delicate negotiations, after which they did not provide any assistance for this article. Ryan’s office did not respond to a request for comment on the topic at all. In its first two years, almost no one knew the group existed, and nobody could identify anything it had done. In the last Congress, both Hensarling and Price were part of the House leadership team, and Jordan was RSC chairman; their formal positions of power may have helped obscure any coordination among them.

This Congress, Price and Hensarling are out of the leadership team. Price lost a bid for conference chairman to Cathy McMorris Rodgers, who was backed by leadership, and Hensarling became chairman of the financial-services committee. At one point, Boehner offered Price a largely ceremonial spot at the leadership table if he would drop his candidacy and pledge not to publicly break with Boehner for two years. Price declined.

Price’s ambition in particular provokes a great deal of suspicion from Boehner and leadership. The two essentially have no relationship, sources close to both men say, and there are perceptions of a broader distrust between the speaker and the Council. Some leadership aides ask whether the Jedi Council is designing the next debt-ceiling fight to culminate in a challenge to Boehner’s speakership; one rank-and-file House member told me in March that the Jedi Council pitched re-sequencing to him as a way of giving Boehner the rope he needed to hang himself. A Jedi Council member told me — before the Council’s decision not to speak to National Review Online — that this isn’t their plan, and several knowledgeable sources agreed that a coup doesn’t sound like them. (For one thing, trying to take out Boehner in the middle of a Congress could have adverse effects on the 2014 elections.)

As for the other members of the Council, Ryan has forged a closer relationship with Boehner since being picked for the Romney presidential ticket. Scalise and Jordan retain good working relationships with the leadership, but Hensarling, out of leadership, has drifted away.

Each of the five members of the Jedi Council brings a different strength and reaches a different part of the GOP conference, supporters say. Ryan has star power and deep credibility on budget issues. Hensarling is the elder statesman of the RSC, a longstanding conservative House caucus. Price, a physician, has expertise on health care. Jordan enjoys friendships with some of the most stubborn conservative members of the GOP conference. Scalise, elected in 2008, is coming into his own and has relationships with some cliques that the others know less well.

In the view of some conservative groups, the Williamsburg Accord has been a mixed bag, and Ryan in particular is in danger of losing his sheen because of his role, even if few observers realize it. Some prominent conservatives were shocked, for example, to learn that the Ryan budget achieves balance in ten years in part because it assumes that tax revenues will remain at their current level, 19 percent of GDP, which includes the fiscal-cliff and Obamacare tax increases. Officially, this revenue level will be achieved by a reformed tax system with lower rates and the resultant economic growth. But the assumed tax revenues as a percentage of GDP are higher than their historic average, which the outside groups find problematic. Both Heritage Action and the Club for Growth have nonetheless stayed neutral on the proposal, avoiding a fight and giving Ryan more room to maneuver.

House conservatives are also concerned that the improving economy has made it possible to postpone the debt-ceiling fight again and again: As more tax revenue comes in, the Treasury Department can fund the government longer with its existing borrowing authority. Ryan said in a recent radio interview that debt-ceiling D-Day will now come in November, much later than the summer battle originally anticipated.

The building angst about the strategy is partly why Senate conservatives, led by Ted Cruz and Mike Lee, began calling for using the upcoming continuing-resolution (CR) bill to defund Obamacare, a departure from the path laid out at Williamsburg. Cruz in particular has been quite successful at driving the debate in the media, even while the Jedi Council and other House Republicans have rejected his approach.

Boehner announced yesterday during a conference call with rank-and-file members that he will push for a short-term CR — a strong hint that a do-or-die Obamacare fight isn’t in the mix during the CR debate. Instead, leadership will follow the original plan to force a debt-ceiling brawl. That plan, however, prompts questions about the fine print of the Williamsburg Accord — what, that is, the brawl should be about. A source familiar with the deal recently told me, “The agreement was that it would include cuts or reforms that put us ‘on the path to balance’ in ten years. The bill wouldn’t necessarily have to achieve balance in ten years all by itself.”

What does putting the budget on a “path to balance” mean? “You can drive a truck through that loophole,” says one senior GOP aide. Scalise has talked about trading parts of the Ryan budget for increases in the debt ceiling — small tax and spending reforms for small debt-ceiling increases, and big reforms for bigger increases. Boehner would negotiate the details with President Obama, in theory producing some middle-ground deal.

How closely will House leaders stick to the Williamsburg Accord once tensions rise and the debt ceiling approaches? In public remarks, Boehner has said several different things, including promising a debt-ceiling increase only in return for the same amount in cuts and saying that “our goal here is to get this country on a path to balance the budget over ten years.” A spokesman clarified to NRO that no decisions have been made.

House majority leader Eric Cantor says he is on board with tying the debt-ceiling increase to reforms that balance the budget in ten years, calling such an approach “sensible.” He adds, underscoring his desire for urgent reform, “We have a demographic reality of 10,000 Americans turning 65 every day, and a programmatic reality of Medicare being almost 50 percent underfunded.”

Although Boehner and Cantor will be making the final decisions about the debt-ceiling fight, it’s Ryan for whom the expectations are high. “I think the whole episode puts a lot of burden on Ryan — and the rest of the gang, but especially Paul, who got the exact sequencing he wanted to have,” Needham says.

It’s not quite fate of the universe, but when the debt-ceiling fight arrives this fall, much will be riding on the wisdom of Ryan and his allies.

— Jonathan Strong is a political reporter for National Review Online.