America’s Budget Dysfunction Has Geopolitical Costs

The basic geopolitical strategy puzzle faced by the United States today is how to manage the relative decline of U.S. economic and military power, while maintaining U.S. leadership and influence to protect the country’s security and prosperity. After a long era of unquestioned global primacy, the United States needs to figure out how to continue to lead with fewer of the tools of hegemony than it once had at its disposal.

All-powerful hegemons don’t need especially sophisticated strategies. But today’s not-quite-so-dominant United States needs to become smarter about how it maintains and deploys global influence. Part of being a more sophisticated strategic actor is developing new approaches to world politics—for example, cooperating in nimbler, more flexible ways with like-minded actors to tackle challenges that Washington can no longer take on alone. A more basic requirement is to conserve political capital and spend it wisely—above all, by avoiding unforced errors that diminish U.S. power with no benefit for Americans.

The escalating budget fight and looming shutdown in Washington is one such unforced error. It will produce no benefit for the country and diminish its power. For one, the budget fight—at this stage, a fight between the radical and mainstream wings of the Republican Party in Congress that House Speaker Kevin McCarthy has been helplessly unable to control—is a distraction that threatens to escalate in the weeks ahead. It is consuming the energies of Congress and the White House at a moment marked by a major European war, tensions with China, risks associated with dramatic breakthroughs in artificial intelligence, and ongoing efforts to contain global economic strains. When legislators play unnecessary political theater, they and the White House are distracted from pressing national and international issues that don’t wait for the show to be over.

McCarthy’s present woes are the latest chapter in a long-standing story of failure. The recurring inability of the U.S. Congress to reliably pass a federal budget is not only distracting, but also leads to inefficient spending: Instead of allocating spending strategically, stopgap measures merely extend existing misspending and fail to set urgent new budget priorities. For example, a properly negotiated budget might shift resources toward priorities such as helping U.S. communities build resilience to climate-related disasters, invest more in Central American economic development to reduce migration pressures, and sunset other spending that might no longer be warranted. When the United States had money and power to spare in executing its objectives in homeland security, defense, trade, and foreign affairs, fiscal waste and misaligned resources didn’t have as much of an impact, but as the country navigates a more competitive world, a hamstrung budget process is a strategic albatross.

Moreover, the budget hijinks look childish: Is this how the world’s most powerful nation conducts itself? News media around the world are reporting on the fact that the entire U.S. government might be shut down because its leaders can’t handle a basic legislative process. In a time of global struggle between democracy and autocracy, when the United States needs to harvest the power of its example, the annual budget shenanigans degrade that power and set a truly bad example for advanced democracy. If the Chinese Communist Party is convinced that the United States has entered an era of inexorable decadence and decline, the budget circus is evidence that corroborates its hypothesis.

In this circus, there are several rings. One is the broken campaign finance system, where money so determines political outcomes that politicians must prioritize fundraising if they want to have any chance to be elected or reelected. Campaign donors—whether solitary billionaires or armies of small contributors—have outsized influence, and they punish the kind of compromise that democracy needs to function.

In 2016, I had a conversation with a Republican U.S. senator, who recalled that in a call with a major donor to the party, the donor had asked the senator, “Are you prepared to hold up [Democratic presidential nominee Hillary Clinton’s] judges?” and the senator replied, “Well, what do you mean—for how long?” to which the donor replied, “Four years.” The quid pro quo between financial support and unqualified obstruction was clear.

Some contend that small grassroots donors offer a democracy-friendly antidote to the political influence of millionaires and billionaires. The internet has certainly made it possible for small donors collectively to compete with economic elites; former U.S. President Donald Trump made history in 2020 when he became the first presidential candidate in modern U.S. politics for whom small donations of less than $200 made up the majority of his fundraising. But the democratization of political fundraising by small donors does not necessarily lead to fewer demands for politicians to avert compromise and accelerate dysfunction.

That’s because the most effective small-donor fundraising campaigns use fear, anger, and outrage to get people to open their wallets. Donors mobilized by such messages punish compromise just as effectively as any billionaire—just ask McCarthy. When there’s a nationwide group of fringe donors who will reward political theater with money, legislators don’t have to pay much attention to their constituents or party leadership.

Ukrainian President Volodymyr Zelensky’s visit to Washington last week was in part necessitated by the fact that support for Ukraine’s resistance to Russia’s brutal, unprovoked invasion has become increasingly entangled in the budget fight. McCarthy refused Zelensky’s request to address Congress and, before his own meeting with him, raised questions about supporting Ukraine going forward. It seems likely that McCarthy was performatively catering to skeptics in his party who have folded support for Ukraine into the broader budget fight. It is a sad example of a small group of legislators holding hostage an urgent foreign-policy priority with broad bipartisan support in order to prosecute an agenda that wavers between fiscal conservatism and anti-establishment nihilism.

In an unusual show of unity, Chuck Schumer and Mitch McConnell, majority and minority leaders in the U.S. Senate, respectively, hosted Zelensky with the entire Senate. McConnell emphasized in a statement: “American support for Ukraine is not charity. It’s an investment in our own direct interests—not least because degrading Russia’s military power helps to deter our primary strategic adversary, China.” But McConnell’s mainstream position is increasingly at odds with legislators in the Republican right wing, who increasingly take an isolationist or Russia-friendly line. In this they are supported by an army of small-dollar donors, who appreciate their provocative anti-establishment views—or who have simply decided that because U.S. President Joe Biden supports Ukraine, they do not.

We generally think of campaign finance and budget standoffs as domestic issues. But the perverse incentives and behaviors in U.S. politics do not just corrode democratic legitimacy, they impair government functioning in ways that weaken the United States’ global standing and influence. As the United States seeks to navigate a more complicated, dangerous world, where authoritarian powers present a clear and present danger to the long-term security and prosperity of Americans, it is more important than ever that the United States functions as a shared enterprise.

Whether it’s adapting the U.S. defense budget to new geopolitical realities and technologies, responding to climate change, or securing the supply chains that American workers depend on, Washington needs a coherent, focused approach that isn’t perverted by either special interests or what are essentially small-donor performance artists in the U.S. Congress. The United States remains the most powerful country on earth, but that reality precipitates strategic blindness if its leaders don’t recognize that in a world that remains threatening and complex, their country is a smaller world power than it once was. Unforced errors make it smaller still.