On Thursday morning, I sat down with Senator Mitch McConnell of Kentucky, the minority leader, in his Capitol office. We discussed his role in brokering the recent fiscal deal, his outlook on future talks, and Republican expectations for divided government. He also spoke firmly of his commitment to keep the government open. “A government shutdown is off the table,” he says, looking ahead to a possible impasse early next year. “We’re not going to do it.”
Costa: When did you know this standoff was finally ending?
McConnell: I can tell you when I knew that we’d end up here — July. We had extensive discussions in July about how the defund strategy couldn’t possibly succeed. And it’s really a matter of simple math: 54 is more than 46. And, of course, when you add in the president, you knew it had no chance of success. So I knew we’d end up in the place where we ended up. What I could not have predicted is that we’d end up in that place and have so few cards to play. To use a football analogy, by the time it was clear the House couldn’t pass anything, I was on the two-yard line, trying to see how I could punt to get us into a better field position to live to fight another day without raising taxes or busting the [Budget Control Act] caps. Honestly, that’s why it was a deal worth making. But it didn’t have anything else attached to it because the House couldn’t send anything that would give me any ability to negotiate. As you recall, that’s the same problem we had last December 31 during the fiscal cliff. The speaker had an excellent “Plan B” with a $1 million threshold on taxes, but they couldn’t pass it. If they had been able to send that over, we’d have ended up a lot higher than $400,000, $450,000 for a couple.
Costa: Is the House a functioning majority?
McConnell: Look, I’m just going to talk about the facts. I’m in a weaker position when the House can’t act. Each of these occasions — all four of them, the two-year extension of the Bush tax cuts in 2010, the Budget Control Act of 2011, the fiscal cliff and making the tax cuts permanent, and this past week — we’ve had to go first in the Senate. Now, in defense of the House, the first one, December 2010, they weren’t yet the majority. But as a practical matter, we’re in a weaker position when you don’t have a more pro-Republican bill coming over to the Senate. So, the most I can say about yesterday is that we had a bipartisan agreement to get the government running and avoid default, to live to fight another day without compromising our principles on spending and taxes. We’ll be back at it in January and February, but the issues will be the same. Keeping the BCA levels is a huge success, and I know because Democrats hate it.
Costa: Explain the significance of keeping sequestration, in terms of putting those cuts on the table for legislative trades.
McConnell: The price for entitlement reform, so far from the administration, has been taxes. There is some willingness to discuss trading entitlement spending reductions for discretionary spending relief. But, so far, there has been no real willingness on the part of the administration to do that. That’s worth discussing, though, because if you get real entitlement spending reductions, they tend to last — we don’t tend to vote on it every year. Take the decision by Reagan and Tip O’Neill to raise the age of Social Security; we never went back and revisited it, and it saved Social Security for a generation. And there’s no question that as proud as I am of the Budget Control Act, that only deals with the discretionary side of the budget, and the biggest problem is on the entitlement side. Now, that’s not an argument for not reducing discretionary spending, since I think the government is way too big, including on the discretionary side. But the biggest challenge we need to address is entitlements, and they don’t want to.
Costa: What’s the snag?
McConnell: When the speaker has had conversations with the president over the last three years, they have always insisted on a $1 trillion tax increase — revenue scored by the Congressional Budget Office. That’s their demand for any major entitlement reform. But we don’t think we should have to pay a ransom to do what the country needs. And until you adjust the eligibility for entitlements to fit the demographics of our country, you can’t ever solve the problem. You can’t tax your way out of it, and there aren’t enough health-care providers to cut to find a way out of it.
Costa: Do you have any hopes for the budget conference?
McConnell: I wish them well. But with all due respect to all of my congressional colleagues, there is only one Democrat who really counts — the president. And they’ll support whatever he agrees to. I’ve said that to the president on a number of occasions: You’re the Democrat who counts. If you’re willing to work with us to solve this problem, don’t use congressional Democrats as an excuse. They may not like it, but they’ll vote with you. They didn’t like the Budget Control Act, but they voted for it. He’s the one who counts. What we haven’t seen with him is the same kind of willingness to deal that we saw with Reagan, that we saw with Clinton. I think the president still fantasizes about the government he had during his first two years in office. There is a deep-seated reluctance to deal with the government he has. I’d love to see the president move to the middle, and on all four occasions he has, I’ve been directly involved and worked with him. But there should have been a lot of times. It’s disappointing. He’s going to be there for three more years. Maybe he’ll have an epiphany.
Costa: Are you willing to deal on revenue, perhaps via tax reform, where you’d close loopholes without touching rates?
McConnell: Tax reform is possible, but they won’t engage in dynamic scoring. We know if we had a more rational tax code, there would be more revenue through growth. They won’t count dynamic revenue increases. They want revenue that’s CBO scored. If we could get them to credit for revenue through growth, maybe we’d get somewhere.
Costa: You said we’d be back here in January and February dealing with the same issues. Is another shutdown possible?
McConnell: No. One of my favorite sayings is an old Kentucky saying, “There’s no education in the second kick of a mule.” The first kick of the mule was in 1995; the second one was the last 16 days. A government shutdown is off the table. We’re not going to do it.
Costa: A lot of reporters think your decisions are driven by political considerations in your home state, especially your primary versus Matt Bevin and a potential general-election campaign versus Democrat Alison Lundergan Grimes. How are those factors shaping your strategy?
McConnell: Oh, that’s the Mother Jones thesis. I have nothing to say about my primary opponent. And this week, it’s pretty obvious about whether that’s driving my decisions. As for [Lundergan Grimes], the whole rationale for her candidacy is that I’m part of the dysfunction in Washington, so she’s probably been pretty unhappy over the past 24 hours. I’ve demonstrated, once again, that when the Congress is in gridlock and the country is at risk, I’m the guy who steps forward and tries to get us out of the ditch. So it’s been a bad 24 hours for her, and she’s going to need to find a new rationale.
Costa: Looking ahead, what’s your message to your colleagues about reasonable expectations for divided government?
McConnell: Thanks to the nature of the Senate, unless you’re at 40, you’re not irrelevant. We were irrelevant a few years ago, frankly, except for keeping unity for things we opposed, like Obamacare. But since then, we’ve been a consequential minority. But you’re only a consequential minority if you can hold together 41 people. Thanks to my colleagues, we’ve had the ability at these critical moments to try to get as good an outcome as we could, given the cards that we’ve been dealt. But one thing that’s made it hard is the inability of the House of Representatives, on these occasions, to send us legislation that’s more robust, proposals that have more of the things that I and my colleagues would prefer. We’d have been in a much stronger position if they had been able to do that.
Costa: And that’s what happened yesterday.
McConnell: This thing that passed the Senate, which, honestly, only maintained the status quo for a few more months, was better than what the House tried to pass and couldn’t pass, because it has a longer CR, which is what we wanted. That’s how challenging it is when you can’t get something more in line with what you’d like to achieve over here. So, my job is to acquaint our members, the best I can, with the reality of our situation, and try to get them to enable me to get us all out of the ditch — and my members weren’t happy being in a 16-day government shutdown and being a day away from rattling the markets by getting close to default. They knew I had a weak hand, given the time we had squandered on this quixotic venture that had no chance of success, but they asked me to find a way out and I did. Most of them voted for it, too, which I appreciated.
Costa: How does the party get beyond this mess? It seems like you’re having a civil war over tactics.
McConnell: Well, for one, we’re not going to do this again in connection with the debt ceiling or with a government shutdown. Look, it’s unlikely the Democratic Senate or Democratic president will do much on Obamacare. We did a minor little income-verification thing, an anti-fraud thing, but beyond that, it’s unlikely. That’s the bad news. The good news is that it’s front and center for the 2014 election. Of the things we can predict for 2014, Obamacare will be front and center, especially in the red states where we could pick up seats.
Costa: Has your relationship with Senate majority leader Harry Reid evolved over the past few weeks?
McConnell: It’s better than it has been. We both knew that whatever differences we have, we had to put them aside yesterday for the good of the country. Our differences, however, are about issues. It’s not personal. They want to raise taxes and bust the caps, and I don’t want to raise taxes or bust the caps.
Costa: One last thing: What’s your take on Senator Ted Cruz, who led the “quixotic venture”?
McConnell: I don’t have any observations to make on that.