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Republicans Foolishly Risking Default To Prove A Political Point

Debt Ceiling

According to some estimates, we’re just about a month away from the point where the statutory limit on the Federal Government’s ability to borrow will begin to have an impact on the Treasury Department’s ability to pay the nation’s bills. We actually hit the limit, somewhat appropriately, on New Year’s Eve but the Treasury has been able to avoid the consequences of that event largely by engaging in some creating accounting much as they did during the summer of 2011. That’s only going to last for so long, however, and at some point we’re going to reach the point where the amount of money in Federal coffers will be insufficient to pay the obligations that the government faces on a nearly daily basis. At that point, unless the debt ceiling is raised, Treasury will be forced to make choices as to what gets paid and what doesn’t. Most obviously, priority items such as interest on the national debt, pensions, Medicare, and Social Security will likely get top priority, but that will still leaves tens if not hundreds of millions of dollars of obligations per month that will go unpaid. These obligations are monies owed to a wide variety of individuals and organizations ranging from contractors, to vendors of all types (including companies that sell products to the government as ubiquitous as office supplies, for example), to the state’s that receive federal dollars for a wide variety of products, to landlords in spaces that the government rents space, to Federal Employees.

As there was during the debt ceiling crisis in 2011, there’s been much talk recently about what the actual consequences of letting all of this happen would actually. The word default is being thrown around a lot, but there are actually two kinds of default that are possible here and the consequences of both are just a little different. The worst case scenario default would be one in which the United States actually failed to make interest payments to bondholders as required by law, or if it failed to pay bondholders who redeemed their bonds at maturity, something that we’ve never done in our history. If this were to happen, confidence in the safety of Federal Government debt instruments would decline significantly, interest rates would rise, and world financial markets would be sent into a panic that would potentially outweigh what we saw in the summer of 2008. In reality, there’s little chance that this would happen. The United States brings in roughly $200 billion per month in revenue of various kinds, while the interest due on a monthly basis on our debt instruments is roughly $20 billion per month. There would clearly be enough money to cover our debt obligations as long as whatever crisis continued, and it’s inconceivable that any American President would allow his Treasury Department to put the nation into default in this manner. Therefore, I’d say that the actual odds of the United States defaulting on its bond obligations is really quite low.

There’s another kind of default that’s possible here, though, and it’s the one that I noted above. That $200 billion a month that the Federal Government brings in is nowhere near enough to cover all of the obligations that the Treasury has to pay out during the average month. Clearly, some obligations would have to go unpaid. This means that contractors, vendors, landlords, and employees who depend on these payments would find their bank accounts empty. The cascade effect of such an event is pretty easy to understand. Contractors and vendors who don’t get paid what they’re owned by the Government will find it hard to pay their own obligations, including salaries and benefits,  and this will trickle down to the people who depend upon them in a self-repeating cycle. While it doesn’t involve the Federal Government’s bond obligations, this is as much a “default” as you failing to pay your credit card bill or your mortgage, and the consequences would not be dissimilar. While such a default would not likely lead to the panic in the financial markets noted above, it will cause a serious economic slowdown and, according to most estimates, push the economy very quickly into a recession if it’s allowed to continue.

So, whether we’re talking about failing to pay our bond obligations or failing to pay our other bills, the default that would result from a failure to raise the debt ceiling would clearly be economically painful. This is why the Republican Party’s current strategy seems so bizarre:

House Republicans are seriously entertaining dramatic steps, including default or shutting down the government, to force President Barack Obama to finally cut spending by the end of March.

The idea of allowing the country to default by refusing to increase the debt limit is getting more widespread and serious traction among House Republicans than people realize, though GOP leaders think shutting down the government is the much more likely outcome of the spending fights this winter.

“I think it is possible that we would shut down the government to make sure President Obama understands that we’re serious,” House Republican Conference Chairwoman Cathy McMorris Rodgers of Washington state told us. “We always talk about whether or not we’re going to kick the can down the road. I think the mood is that we’ve come to the end of the road.”

Republican leadership officials, in a series of private meetings and conversations this past week, warned that the White House, much less the broader public, doesn’t understand how hard it will be to talk restive conservatives off the fiscal ledge. To the vast majority of House Republicans, it is far riskier long term to pile up new debt than it is to test the market and economic reaction of default or closing down the government.

GOP officials said more than half of their members are prepared to allow default unless Obama agrees to dramatic cuts he has repeatedly said he opposes. Many more members, including some party leaders, are prepared to shut down the government to make their point. House Speaker John Boehner “may need a shutdown just to get it out of their system,” said a top GOP leadership adviser. “We might need to do that for member-management purposes — so they have an endgame and can show their constituents they’re fighting.”

David Frum wonders whether the Republicans are bluffing with all this shutdown and default rhetoric. Well, I think its certainly possible that the GOP Leadership, especially Speaker John Boehner realizes that the debt ceiling will have to be raised and that default of any kind simply isn’t an option, not just for the country but for the Republican Party’s political future. However, John Boehner is a wounded leader at the moment. The Fiscal Cliff negotiations, and most especially their resolution, left a lot of bad blood in the water that has yet to be fully resolved. Indeed, it’s come out in the past two weeks that the main reason that Boehner pulled the Sandy Relief Bill from the schedule on the night of January 1st was because he felt that he’d already lost enough credibility with the House GOP Caucus over the Fiscal Cliff and that he couldn’t risk losing more . As we saw just a few days later, those restive conservatives were part of what was ultimately a failed effort to unseat Boehner as Speaker. Now, just ten days later it’s pretty clear that Boehner and the rest of the House GOP Leadership are walking on thin ice and it’s entirely unclear that they have any real ability to control those members of the caucus who seem willing to send the country over the brink in an effort to win a political battle.

I’m honestly not sure how this situation is going to resolve itself. In a rational world, both sides would be sitting down right now and trying to hammer out a deal that raises the debt ceiling while satisfying enough Republicans to get a bill through the House. We’re long past living in a rational world on Capitol Hill, though, and the fact that we have Republican members of the House willing to send our economy over the cliff yet again suggests that there may be no resolution at all to this crisis. I hope I’m wrong about that one.

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. cd6 says:

    I agree with Doug

    In a rational world, both sides would be sitting down right now and trying to hammer out a deal that raises the debt ceiling while satisfying enough Republicans to get a bill through the House.

    In a rational world, we would do what the crazy people want to do. Instead of just raising the debt ceiling automatically like we did for years… irrationally?

    Hot debate. What do you think? Thumb up 17 Thumb down 4

  2. Tsar Nicholas says:

    The other way to look at this, however, is that given Team Obama’s history of caving in at every turn the House GOP shrewdly is raising the specter of “default” (FYI, hitting the debt ceiling doesn’t actually mean literal default) to score eventual political points.

    Look at the “fiscal cliff” kerfuffle. Team Obama had 100% of the leverage and yet somehow managed to make (gulp) the Bush tax cuts permanent even for people earning $400,000 per annum and for couples earning $450,000 per annum, when the left’s “line in the sand,” they told us all along, was $200k and $250k.

    And the last time the debt ceiling issue came to the forefront Team Obama caved on various fronts, both on the revenue side and on the spending side.

    So why shouldn’t the House GOP extract its pound of flesh yet again? Politics ain’t a game of hearts and Team Obama has proven time and again to be ripe for the plucking, despite holding aces in the hole.

    Like or Dislike: Thumb up 7 Thumb down 4

  3. Jeremy R says:

    That article is just chock full of crazy gold:

    To the vast majority of House Republicans, it is far riskier long term to pile up new debt than it is to test the market and economic reaction of default …

    ..

    GOP officials said more than half of their members are prepared to allow default …

    Speaker John Boehner “may need a shutdown just to get it out of their system,” said a top GOP leadership adviser. “We might need to do that for member-management purposes

    Obama assumes Republicans would never be so foolish as to put the economy at risk to win a spending fight. Conservatives say he’s definitely wrong on that score.

    Boehner’s chief of staff, Mike Sommers, discussed the possibility of increasing the debt limit for only one to three months — a move that would rattle markets and threaten the U.S. credit rating.

    GOP leaders are authentically at a loss on how to control members who don’t respond to the normal incentives of wanting to help party leaders or of avoiding situations — like default — that could be public relations nightmares.

    Boehner’s own staff has warned conservative lawmakers that deficits will soar, as interest rates rise, the markets will tumble and the economy will face catastrophe if they truly follow through on default. … GOP leaders have made similar pitches before, and most House Republicans didn’t buy it.

    Like or Dislike: Thumb up 12 Thumb down 1

  4. Hal 10000 says:

    I think the Republicans need to stop calling themselves conservative. No one who really had a conservative temperament would contemplate the great and dangerous unknown of default. That wouldn’t even be on the table. I’m so glad I stopped voting for them. This is lunacy.

    Highly-rated. Helpful or Unhelpful: Thumb up 28 Thumb down 2

  5. Rafer Janders says:

    In a rational world, both sides would be sitting down right now and trying to hammer out a deal that raises the debt ceiling while satisfying enough Republicans to get a bill through the House.

    No, in a rational world the GOP would just vote to raise the debt ceiling, no negotiations required. A rational world would not contain Republicans who would vote to put their nation into default.

    This is spending, after all, that Congress has ALREADY AUTHORIZED. In a rational world, you don’t buy things and then negotiate about whether you’re actually going to pay for those things after you’ve already bought and used them.

    Highly-rated. Helpful or Unhelpful: Thumb up 38 Thumb down 2

  6. stonetools says:

    @Tsar Nicholas:

    nd the last time the debt ceiling issue came to the forefront Team Obama caved on various fronts, both on the revenue side and on the spending side.

    So why shouldn’t the House GOP extract its pound of flesh yet again? Politics ain’t a game of hearts and Team Obama has proven time and again to be ripe for the plucking, despite holding aces in the hole.

    For once, I agree with you, Tsar. The Obama Administration has negotiated with the terrorists far too often, which is why they ‘re back for more.

    Like or Dislike: Thumb up 15 Thumb down 2

  7. Rafer Janders says:

    I think the Republicans need to stop calling themselves conservative.

    No, they’re very much conservative. Conservatism as a political philosophy, after all, is pretty much defined by its defense of the power of the entrenched upper-class interests. It takes different forms in different societies over time, but it’s a good rule that the conservatives will be the ones protecting the guys at the top. And if the guys at the top don’t want to pay their bills, then that’s what conservatives will be for.

    Like or Dislike: Thumb up 6 Thumb down 2

  8. john personna says:

    @Rafer Janders:

    The optimum strategy for Republicans would be to get every strong incumbent to vote yes, for matching the debt limit to incurred spending, and to let Republicans who need to say “I voted no” for political gain to do so.

    I guess their problem is that strong incumbents might also be the ones whacky enough to say no.

    Like or Dislike: Thumb up 3 Thumb down 0

  9. C. Clavin says:

    What Tsar is saying, even though he/she probably doesn’t understand it, is that Obama has repeatedly compromised. Republicans refuse to. Let them default.
    The fact is that there are plenty of upcoming opportunities to more responsibly address spending.
    Boehner, Cantor, Ryan…all voted for the primary drivers of the deficit and thus the debt…Bush Tax Cuts, Iraq, Medicare Part D. and the debt service on those things. Now they don’t want to pay their credit card bill. Fine. Don’t. Let’s see what happens to an increasing irrelevant Republican party.

    Like or Dislike: Thumb up 7 Thumb down 1

  10. Rafer Janders says:

    Boehner’s own staff has warned conservative lawmakers that deficits will soar, as interest rates rise, the markets will tumble and the economy will face catastrophe if they truly follow through on default. … GOP leaders have made similar pitches before, and most House Republicans didn’t buy it.

    Look, if you spend thirty plus years building a political movement out of rejecting science, logic and commonly-accepted facts, then this is what you get: an entire caucus of idiots.

    Frankenstein is always shocked, shocked when it turns out he can’t control the monster.

    Highly-rated. Helpful or Unhelpful: Thumb up 46 Thumb down 1

  11. Rafer Janders says:

    @john personna:

    I guess their problem is that strong incumbents might also be the ones whacky enough to say no.

    Yep, plus the strong incumbents don’t owe the leadership anything, so Boehner’s leverage against them is weak.

    Like or Dislike: Thumb up 5 Thumb down 0

  12. john personna says:

    @stonetools:

    I’m not sure that Obama’s “negotiation” had anything to do with past votes and outcomes.

    The Republicans are playing a game against themselves in this. They know two things. They know they’d like to demand spending cuts, with an ultimatum. They know the ultimatum actually damages their future electoral prospects.

    They are trying to split the difference with their own future, not versus Obama.

    Like or Dislike: Thumb up 2 Thumb down 0

  13. john personna says:

    (It is actually Democratic Senate vs House Republicans, as an ultimatum game. Obama would sign anything that passes, given the time constraints. The only card the Republicans hold is “do nothing” which puts them in this tight spot.)

    Like or Dislike: Thumb up 1 Thumb down 0

  14. stonetools says:

    We’re long past living in a rational world on Capitol Hill, though, and the fact that we have Republican members of the House willing to send our economy over the cliff yet again suggests that there may be no resolution at all to this crisis. I hope I’m wrong about that one.

    Doug, you should read Tsar’s post above, which explains why the House Republicans are in fact acting quite rationally when they use extremist tactics like this. If you reward extremism with a willingness to negotiate and concessions before at and the negotiating table, you beget more extremism.
    The Obama Administration have told us that THIS TIME, they won’t negotiate-which the Republicans, understandably, don’t believe.
    Yet you are urging them to cave once again. I guess some people never learn. Let’s hope Obama has learned his lesson. Since they’ve already given up leverage by ruling out certain options beforehand, I doubt it.

    Like or Dislike: Thumb up 5 Thumb down 1

  15. Rob in CT says:

    Nice of Doug to at least point out the GOP is playing with matches. Most of his posts have been complaining about proposed end-arounds (platinum coin, etc).

    Part of the problem the Dems have is that if they say “fine, I dare you” nobody will believe them (for good reason – they’re not that crazy!). Bleh.

    Like or Dislike: Thumb up 9 Thumb down 0

  16. Rob in CT says:

    Let’s also recognize that the “non crazy” Republicans (like, supposedly, Boehner) have benefitted from the widespread belief (that I share, mind you) that a large chunk of the GOP caucus is nuts. Hey, I’m doing my best here. I need something from you so I can bring those crazies along! Give me [insert concession here].

    This breaks down if nobody believes he can bring the crazies along, though. And that’s where we are.

    Like or Dislike: Thumb up 7 Thumb down 1

  17. Rafer Janders says:

    One thing that’s really come through the last few months is that a large part of the GOP really doesn’t understand what crashing the world economic system would actually look like. Since they don’t believe commonly accepted facts that everyone else understands is true (and should be incredibly obvious to anyone who has ever paid a credit card bill late, gone into foreclosure, etc.) it’s hard to reason with them. And not only can’t you reason with them, you can’t also threaten them, since so many of them sit in safely gerrymandered seats, or are so dumb and/or insane that they can’t even understand their own long-term self-interest.

    Explaining a worldwide economic meltdown to the House GOP is like explaining death to a five year old — they just won’t believe it actually exists and that it’s for real until they see it happen to someone they know, and even then they won’t fully accept it. But by then, it’s too late.

    Like or Dislike: Thumb up 15 Thumb down 1

  18. stonetools says:

    @john personna:

    I’m not sure that Obama’s “negotiation” had anything to do with past votes and outcomes.

    I’m sorry, John, but Tsar is right on this. The Obama Administration ‘s history of caving in the face of extremism strengthens the hand of the extremists.

    Not to go Godwin on you, but Obama strikes me as being exactly like Neville Chamberlain at Munich-a reasonable man trying to negotiate honorably with someone who knows that Chamberlain will blink and offer concessions at the crunch, and who, unlike Chamberlain, is not afraid of what’s beyond the crunch.

    Like or Dislike: Thumb up 4 Thumb down 0

  19. Rob in CT says:

    I think there is a certain fantasy at work with all of this too. If you predict DOOM as the result of immorality (and frankly a lot of the screaming about debt and such is basically a moral argument), then the longer the immorality continues without DOOM, the more your get frustrated… to the point where perhaps you want DOOM to come to pass. Perhaps even if you have to help it along?

    liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.”

    Note the moral language.

    Like or Dislike: Thumb up 9 Thumb down 0

  20. stonetools says:

    @Rob in CT:

    Part of the problem the Dems have is that if they say “fine, I dare you” nobody will believe them (for good reason – they’re not that crazy!). Bleh.

    You see , that’s the problem here. While some people believe the Republicans are bluffing when they say they won’t raise the debt ceiling, nobody believes Obama when he says , ” Honest, I really won’t negotiate! Let the Republicans do their worst.” You can’t bluff successfully if everyone knows you are bluffing. And the fact that the Obama Administration has already taken options off the table ahead of the negotiation only contributes to the impression that the Democrats will cave in the end.

    Like or Dislike: Thumb up 5 Thumb down 0

  21. Rafer Janders says:

    Perhaps even if you have to help it along?

    Good point. After all, the supposed point of their screeching about debt, deficits, big spending, etc. is that if we don’t get spending under control, we’ll face an economic collapse, interest rates will rise through the roof, and we’ll no longer be able to borrow…so in order to stop this from happening, they’re going to engineer an default which will cause an economic collapse, interest rates to go through the roof, and an inability to borrow.

    (I say “supposed point” because really, deep down they just want to kick the poor and helpless in the teeth. The rest is window dressing).

    Like or Dislike: Thumb up 5 Thumb down 0

  22. Rafer Janders says:

    @stonetools:

    And the fact that the Obama Administration has already taken options off the table ahead of the negotiation only contributes to the impression that the Democrats will cave in the end.

    Well, not quite. Taking the platinum coin option off the table can strengthen, not weaken, the position that you won’t negotiate. The coin was telling Repuublicans “even if you don’t raise the ceiling, don’t worry, I got this, I alone will make sure we don’t default”, so it removed the risk from their strategy, while keeping a lot of risk with Obama since the public doesn’t understand how money works and so they’d see it as a gimmick.

    Without the coin, it’s all back on them. It’s playing hardball, and a key part of Negotiation 101: don’t tell your opponent beforehand that you’re going to save him from his own intransigence.

    Like or Dislike: Thumb up 9 Thumb down 0

  23. john personna says:

    @stonetools:

    Here’s a way to look at it. How would the debt limit ultimatum play out differently if Obama were just a “signing machine?”

    I don’t see it happening any differently. All the action is between bills which pass the Senate, and bills which pass the House.

    Those will be what they are pretty much by party decision.

    Like or Dislike: Thumb up 0 Thumb down 0

  24. john personna says:

    (We, as humans, conditioned to a tribe leader, like to think that the leader makes things happen. That has even been true when events are outside his control. Which is why I like the “throw the chief in the volcano” metaphor. Don’t like the economy? Throw the chief in the volcano.

    Now as specifically applies to budgets and tax plans, the President certainly may, at times, sway Congress to a path of his design, but that is certainly not true all the time. I don’t think it’s true now.)

    Like or Dislike: Thumb up 0 Thumb down 0

  25. Rafer Janders says:

    @john personna:

    Which is why you hear all this talk on the Republican side that “Obama should cut spending!” How? Obama doesn’t initiate any spending, he only executes the spending that Congress has already authorized.

    Like or Dislike: Thumb up 4 Thumb down 0

  26. scott says:

    Of course if it is the President’s choice on what gets paid or not, he should just stop paying the salaries and benefits of congressment and staffers as well a whatever it costs to run the infrastructure on Capitol Hill.

    On the other hand, I thought it was law that the President has to spend what was appropriated. This law goes back to Nixon when he tried to “impound” funds that he didn’t want to spend but that Congress had appropriated.

    Like or Dislike: Thumb up 3 Thumb down 0

  27. stonetools says:

    @Rafer Janders:

    Without the coin, it’s all back on them. It’s playing hardball, and a key part of Negotiation 101: don’t tell your opponent beforehand that you’re going to save him from his own intransigence.

    I can see that argument, but then you have to believe that Obama really is willing to shut the federal Government down and risk the economy slumping into recession. So far, he has tended to cave at the crunch, so it’s worth it to the Republicans take it to the limit-especially if they are in safe seats.
    Doesn’t help if there are people like Doug beseeching the President to be “reasonable” in the face of the crazies.

    Like or Dislike: Thumb up 0 Thumb down 0

  28. The advantage in any hostage negotiation is always to the party that has the least to lose. Such is the case here. Republicans are not rational; they don’t have anything to lose. They will continue to do this, continue to get concessions – after all, the election doesn’t matter, *they have nothing to lose* – until voters inevitably put them back into power. Then the “fun” really begins…

    The current Republican party – those actually in power, or angling to purge the so-called “RINOs” – has no interest in governing. They’ve become an Orwellian quote come to life: the object of power is power, and that’s all the want is power.

    Like or Dislike: Thumb up 5 Thumb down 1

  29. J-Dub says:

    Doug, you need to get a picture from Blazing Saddles of the sheriff holding a gun to his own head for any more of these debt ceiling articles.

    Like or Dislike: Thumb up 7 Thumb down 0

  30. Rafer Janders says:

    In a rational world, both sides would be sitting down right now and trying to hammer out a deal that raises the debt ceiling while satisfying enough Republicans to get a bill through the House.

    I’ll note once again that even in a post condemning the GOP for its irresponsibility, Doug’s baseline of “a rational world” is a world in which Republicans act irrationally by refusing to raise the debt ceiling, and in which Democrats should negotiate with hostage-takers, thereby rewarding future hostage-taking.

    Like or Dislike: Thumb up 11 Thumb down 2

  31. Woody says:

    Fine appraisal, Mr Mataconis.

    However, this appraisal isn’t what will be broadcast across our major media.

    The traditional media will emphasize the controversy, which, as always, will preserve their “unaligned” cred to each other.

    Fox/talkradio will scream as usual, meaning the Republican base will remain unaware of their party’s mendacity.

    Like or Dislike: Thumb up 3 Thumb down 2

  32. john personna says:

    @Rafer Janders:

    Definitely, the charges leveled against Obama are often about “big chief” thinking rather than his personal control.

    Like or Dislike: Thumb up 1 Thumb down 0

  33. Rafer Janders says:

    @stonetools:

    I can see that argument, but then you have to believe that Obama really is willing to shut the federal Government down and risk the economy slumping into recession.

    I believe he may be. After all, if we, to borrow a phrase, don’t shut this whole thing down now, then the Republicans will just keep pulling this debt ceiling nonsense from here on out. Better to have some short sharp pain now rather than long drawn out pain.

    Like or Dislike: Thumb up 4 Thumb down 0

  34. cian says:

    Here’s what I don’t get,- Doug is obviously not an idiot, post after post shows that, so why then does he continue to support a party that no longer serves anyone other than the craziest of the crazies? When it comes to gun control, immigration, women’s’ health, foreign and fiscal policy, they’re all bat sh$%t crazy. They lost the presidency, they lost seats in the house along with the popular vote, and they failed, when it looked possible, to take the senate, because they’re bat sh$%t crazy. The only reason they retain any say whatsoever in the running of the country is because of the 2010 re-districting, and if enough sane conservatives stood a-top the mountain and cried stop, then maybe the party would become a net gain for the nation and not this deadweight around its neck. Jesus!

    Like or Dislike: Thumb up 5 Thumb down 0

  35. stonetools says:

    @john personna:

    At this point, the Democrats are united behind “Big Chief” Obama. The Republicans are sort of playing Bad Cop-Good Cop, in which the hardline conservatives are the “Bad Cop” who yells at Obama, throws him against the wall, and storms out of the room, and the leadership is the “Good Cop” who is telling Obama, ” Look, you’ve got to cooperate with me. I don’t know how much I can hold him off. Here, you want a cigarette? “

    Like or Dislike: Thumb up 2 Thumb down 0

  36. john personna says:

    @stonetools:

    So can you link to the big chief’s bill before Congress?

    See, saying “I’m not negotiating” is kind of directly not that. What’s going to happen is that the Senate is going to pass a straightforward “extend the debt” bill, and then the House will face the question.

    Like or Dislike: Thumb up 2 Thumb down 0

  37. john personna says:

    (I really see it as a Republican tactic, and in the Republican interest, to say that Obama is up there in the White House “deciding.”)

    Like or Dislike: Thumb up 1 Thumb down 0

  38. stonetools says:

    @Rafer Janders:

    I believe he may be.

    I hope you are right, but his history points to concessions in the end in order to make a deal-which is why the Republicans are so confident right now that he will cave.
    Its like the opposing counsel who you know hates to go to trial. You wait him out, knowing he’ll accept your offer when the judge calls for a jury.
    Obama is talking tough now, but he also talked tough before the fiscal cliff negotiations, where he had even more leverage than he has now, but the impression is that he blinked and the Republicans did better than they should have. That was the wrong impression to give. The Republicans feel stubbornness was rewarded, so they are being stubborn again.
    The Republicans are taking reasonableness for weakness, which is why he has to absolutely crush them now, even at severe economic cost. Dunno if he is willing to inflict that cost.

    Like or Dislike: Thumb up 2 Thumb down 0

  39. MBunge says:

    @stonetools: “The Obama Administration ‘s history of caving in the face of extremism strengthens the hand of the extremists.”

    I realize that “Barack Obama is the worstest negotiator EVAH!!!” has become one of the foundational myths of the discontented Left, but it should be pointed out that if the President had played the sort of hardball that gets stonetools all excited, there’s good reason to think it would have led to default and the economic calamity it entails. It may happen this time around, but there certainly seems to be far more understanding among everyone of just what the threat is and who would be to blame for it than the last go round.

    In some ways, Barack Obama has gotten less criticism and ill will from the general public than you’d expect for a President presiding over this poor an economy. On the other hand, no President has ever gotten less credit for his accomplishments from his own alleged supporters than this Obama. More-liberal-than-thou critics take everything Barack Obama does as the absolute minimum ANY Democrat in the White House would do, then blast him for not achieving any more.

    Mike

    Like or Dislike: Thumb up 7 Thumb down 0

  40. john personna says:

    @stonetools:

    You say Republicans want Obama to cave. Maybe this is something I’ve missed.

    Have they named what they’ll put in a House bill to raise the debt limit “and X?”

    Something like “raise the debt limit and cut food stamps?”

    Like or Dislike: Thumb up 2 Thumb down 1

  41. stonetools says:

    @john personna:

    You may want to read this report, in which the Senate wrote Obama a letter giving him carte blanche to do whatever he needed to do to oppose the Republicans, should the Republicans refuse to raise the debt ceiling .

    the four Democratic leaders — Senators Harry Reid, Chuck Schumer, Dick Durbin and Patty Murray — have privately reached agreement that continued GOP intransigence on the debt ceiling means the White House needs the space to pursue options for raising it that don’t involve Congress, and that the White House needs to know that Dems will support whatever it decides to do.

    I think that you are correct in terms of how the process could and should work. But in reality, this will be Obama vs. the Republicans.

    Like or Dislike: Thumb up 1 Thumb down 0

  42. Rafer Janders says:

    @john personna:

    (I really see it as a Republican tactic, and in the Republican interest, to say that Obama is up there in the White House “deciding.”)

    As I’ve said all along, the Congress has already racked up the bills. What’s for Obama to decide?

    If your spouse came to you and said “I’ve run up a huge credit card bill on our account. What are you going to give me to induce me to pay the card company?” you’d immediately see the craziness for what it was, and realize it was not in your long-term interest to get into this situation.

    Like or Dislike: Thumb up 6 Thumb down 1

  43. john personna says:

    (If the House takes the government into shutdown, and then introduces a bill, it will be interesting how much they ask for. Doug, who sometimes thinks Obama must recognize the reality, and negotiate, is also against austerity at this moment. Will the GOP ask for austerity?)

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  44. john personna says:

    @stonetools:

    That’s kind of a non-sequitor. Of course the Executive branch must struggle along if we pass the debt limit.

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  45. swbarnes2 says:

    @cian:

    if enough sane conservatives stood a-top the mountain and cried stop, then maybe the party would become a net gain for the nation and not this deadweight around its neck.

    Won’t happen. I think the simplest explanation is that Republicans stand for the proposition that straight white prosperous men are better people than everyone else, and even “sane” conservatives will never stop voting for the party which talks like that. Remember James’ post about why he was voting for Romney, and how policies were barely mentioned? That wasn’t an oversight, that just how “sane” conservatives think about politics.

    That said, lots of straight white prosperous men can ignore that siren song, and can also see the folly of trying to govern based on that ideology. But for the time being, they are a minority of their kind.

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  46. stonetools says:

    @MBunge: 4

    I realize that “Barack Obama is the worstest negotiator EVAH!!!” has become one of the foundational myths of the discontented Left, but it should be pointed out that if the President had played the sort of hardball that gets stonetools all excited, there’s good reason to think it would have led to default and the economic calamity it entails

    I agree with you to a certain extent, but I do think the impression is out there that Obama can be rolled. The Left believes that, but that’s not important. What is important is that hardline conservatives and the House Republicans believe it too.

    If you trawl through the right wing blogs, they just take it for granted that intransigence will be rewarded and that the Republicans should not compromise with Obama on the debt ceiling. Right now, the House Republicans are gearing up for a fight to the death on the issue, and the base solidly backs them, despite misgivings from conservative elites.

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  47. gVOR08 says:

    Lordy. Where to start? I’ll confine myself to the quote from Politico.

    …to force President Barack Obama to finally cut spending by the end of March.

    “President Obama and Congress have already pushed through about $2.4 trillion in deficit reduction since the beginning of 2011…” – Ezra Klein
    http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/10/how-much-more-deficit-reduction-do-we-need-cbpp-says-1-4-trillion/

    “So you heard it here first: while you weren’t looking, and the deficit scolds were doing their scolding, the deficit problem (such as it was) was being mostly solved. Can we now start talking about unemployment?” – Dr. Krugman
    http://krugman.blogs.nytimes.com/2013/01/10/the-mostly-solved-deficit-problem/

    I have no hope for the Tea Party GOPs, but jeebuz it would be nice if Politico had a clue. And yes, please, could we talk about unemployment?

    Like or Dislike: Thumb up 6 Thumb down 1

  48. OzarkHillbilly says:

    @Rafer Janders:

    I’ll note once again that even in a post condemning the GOP for its irresponsibility, Doug’s baseline of “a rational world” is a world in which Republicans act irrationally by refusing to raise the debt ceiling, and in which Democrats should negotiate with hostage-takers, thereby rewarding future hostage-taking.

    You noticed that too?

    Like or Dislike: Thumb up 9 Thumb down 1

  49. stonetools says:

    @john personna:

    From Politico:

    House Republicans are seriously entertaining dramatic steps, including default or shutting down the government, to force President Barack Obama to finally cut spending by the end of March.

    The idea of allowing the country to default by refusing to increase the debt limit is getting more widespread and serious traction among House Republicans than people realize, though GOP leaders think shutting down the government is the much more likely outcome of the spending fights this winter.
    “I think it is possible that we would shut down the government to make sure President Obama understands that we’re serious,” House Republican Conference Chairwoman Cathy McMorris Rodgers of Washington state told us. “We always talk about whether or not we’re going to kick the can down the road. I think the mood is that we’ve come to the end of the road.”

    Read more: http://www.politico.com/story/2013/01/behind-the-curtain-house-gop-eyes-default-shutdown-86116.html#ixzz2HyUnaxK2

    As for austerity, the House Republicans aren’t afraid of austerity. They think it’s good for America. You’re thinking rational economics, and they aren’t.

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  50. OzarkHillbilly says:

    @MBunge:

    More-liberal-than-thou critics take everything Barack Obama does as the absolute minimum ANY Democrat in the White House would do, then blast him for not achieving any more.

    This.

    And then they pine for the good old days of the Clinton WH (I do too on the economy) when gay rights were at the forefront of Administration policy and a major Health Care initiative was so successfully passed and implemented…..

    Like or Dislike: Thumb up 4 Thumb down 1

  51. OzarkHillbilly says:

    @stonetools:

    I agree with you to a certain extent, but I do think the impression is out there that Obama can be rolled. The Left believes that, but that’s not important. What is important is that hardline conservatives and the House Republicans believe it too.

    OK. Take note of the 2 parts I emphasized above. You are right about point #1. You are way massively wrong on point #2. EVERY time we have engaged in these “WE’RE ALL GOONA DIE!” negotiations, and a deal is reached to once again avoid CATASTROPHE…The word from the right, especially the hard right, is Obama rolled them.

    Take note of the most recent fiscal cliff negotiations. Who complained the loudest that “TAXES WERE RAISED AND NOT A SINGLE DIME OF SPENDING WAS CUT!!!” It wasn’t anyone with a ‘D’ after their name.

    And that is why these House Gop’ers are so dangerous. Even when they win something ($400,000 before taxes go up) they think they “OH MY GOD HE TOOK US TO THE CLEANERS” lost. They won’t be happy until they get everything they want, and in that pursuit, they just might shoot the hostage.

    Like or Dislike: Thumb up 5 Thumb down 0

  52. Rafer Janders says:

    @gVOR08:

    …to force President Barack Obama to finally cut spending by the end of March.

    Note that judgmental “finally” by Politico, as if “geez, Obama, cut spending already, why don’t you?”

    And note, once again, that President Obama does not and cannot spend anything to begin with unless Congress has already authorized it. So essentially Congress is demanding that the President cut Congress’ spending, or else! “Nice little budget I’ve got here. Be a real shame if you didn’t make me stick to it, lotsa people could get hurt…”

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  53. Rafer Janders says:

    Just saw this by James Fallows, and thought it worth reposting:

    1. Raising the debt ceiling does not authorize one single penny in additional public spending.

    2. For Congress to “decide whether” to raise the debt ceiling, for programs and tax rates it has already voted into law, makes exactly as much sense as it would for a family to “decide whether” to pay a credit-card bill for goods it has already bought.

    http://www.theatlantic.com/politics/archive/2013/01/the-two-sentences-that-should-be-part-of-all-discussion-of-the-debt-ceiling/267115/

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  54. gVOR08 says:

    @OzarkHillbilly: I’m not much of a poker player, but I’m pretty sure that if you successfully bluff someone, the last thing you want to do is rub it in. It would undercut your next bluff. Obama pragmatically takes his winnings and doesn’t brag about it. But somehow, he’s gotten a whole heck of a lot out of Congress despite rabid GOP obstruction.

    I think that for good economic reasons, revolving around the ongoing recession and marginal propensity to consume, Obama was OK with letting the Bush rates stand except over 450K. There was serious argument from the left that we needed to end the payroll tax holiday before we undercut the argument that SS is self funding. I’m not convinced Obama gave up anything he really wanted. And that’s how I expect the debt ceiling to go. He’ll throw the GOPs some bone, let them brag about it, and move on to the issue.

    Like or Dislike: Thumb up 7 Thumb down 0

  55. stonetools says:

    @Rafer Janders: @gVOR08:

    Guys, I hope you are right. I will say I’m heartened by the messaging on this. Obama has been very clear that the debt ceiling is that all about past debt, that the Republicans already voted for , and he has been drawing lines between the debt ceiling, the debt, and the deficit-all of which runs together in the public’s mind. Also, too, the Democrats are united behind Obama, even unto him taking unilateral measures to resolve the crisis.
    The Republicans are split between the extremists (who aren’t afraid of a default)and the elite (who are). This is a fight he should win. I hope he ignores folks like Doug, who are urging surrender, and fights it all the way to a clean debt ceiling rise

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  56. OzarkHillbilly says:

    @gVOR08:

    I’m not much of a poker player, but I’m pretty sure that if you successfully bluff someone, the last thing you want to do is rub it in.

    The first rule of bluffing in poker is that when you win the hand, you fold up the cards and nobody see’s them If they had wanted to see your cards, they should have paid for the right to do so. Gloating or not all depends on your personal style of overall play. Obama is of the type to pull in the chips and move on to the next hand.

    I’m not convinced Obama gave up anything he really wanted. And that’s how I expect the debt ceiling to go. He’ll throw the GOPs some bone, let them brag about it, and move on to the issue.

    I am with you on that one. Time and again both sides will sign off on a deal and everyone on the right will gloat over how much they got while those of us on the left will bemoan how we gave up the farm. Then serious analysis will be done and the deal will be scored and the roles are reversed. Obama really didn’t give up that much (and those of us on the left are saying, “Boy, we got lucky that time!”) and the House GOP is crying about how “WE GOT NUTHIN!!!” (when in reality they did get something, just not as much as they wanted)

    But the dominant meme in the media for the next few weeks will continue to hold that Obama caved and those rascally hostage takers in the GOP got away with it again.

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  57. bandit says:

    “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. … I therefore intend to oppose the effort to increase America’s debt limit.”
    — Then-Sen. Barack Obama, floor speech in the Senate, March 16, 2006

    I guess it’s different now that the lying POS is president.

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  58. Rob in CT says:

    Yep, he was a grandstanding bullshitter when he said that. Happy to acknowledge it. He took a consequence-free stance. He knew it would be raised. Politicians, baby.

    The problem here is not some back-benchers throwing symbolic votes and whispering sweet nothings to their base. The problem is that that the majority party in the HoR is actually in position to block increasing the debt ceiling and is threatening to do just that. It would be the first time ever for a reason: it’s a really bad idea. But it’s a useful political tactic, first tried in 2011.

    You also might want to note all the votes in favor of increasing the debt ceiling during the Dubya administration. What was it, 5 times? 7? I forget.

    Or all the times it was raised under St. Ronaldus Augustus.

    Never did the Democratic Party actually use the debt ceiling as leverage. This is not because they’re pure as the driven snow. It’s because they have more than two brain cells to rub together. Christ.

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