“And Here We Go Again”: Republicans Are Really, Really Bad At Hostage Negotiations
For some time, I’ve been arguing that we should not just extend the debt ceiling but get rid of it altogether. It’s a weird historical anomaly that serves no practical purpose other than allowing the opposition party, should it be sufficiently reckless, to threaten global economic catastrophe if it doesn’t get its way. I assumed that your average Washington Democrat would share this view, but now I’m beginning to think that if you’re someone like Nancy Pelosi or Barack Obama, the debt ceiling is actually quite helpful, and you’d be sorry to see it go.
Because here’s what keeps happening: The debt ceiling approaches. Republicans begin making threats to torpedo the country’s economy by not raising it, and thereby sending the United States government into default, if their demands aren’t met. We then have a couple of weeks of debate, disagreement, and hand-wringing. Republican infighting grows more intense, and their reputation as a bunch of radicals who are willing to burn down the country to serve their extreme ideology is reinforced. At the end of it, the Republicans cave, the ceiling is raised for some period, and we do it all again in a few months.
And here we go again. The debt ceiling is going to have to be raised in the next month or so. Since the deficit is now at its lowest point since Barack Obama took office, it’s hard for Republicans to say that slashing the budget is so urgent that it justifies threatening to send America off an economic cliff. So what will they demand as their price for assenting to a debt ceiling increase? The answer is…they can’t decide. Yesterday, the House leadership proposed that they demand either a repeal of the “risk corridor” provision in the Affordable Care Act, which protects against a “death spiral” in the individual insurance market (here’s a good explainer on that), or approval of the Keystone pipeline. As Jonathan Chait pointed out, “Republicans have decided that one of these policy demands is so vital that they can insist its fulfillment justifies the threat of global economic calamity. They’re just not sure yet which one.” But it turned out that they couldn’t even unite around one of those two things, and that proposal of the leadership’s is now dead.
So here’s where we are. The Republican position is that something or other, let’s call it the Policy Change To Be Named Later, is so urgent, so pressing, so essential to the future of this great nation that if they don’t get it, whatever it turns out to be, they will force the government into default. And as soon as they figure out what the PCTBNL is, they’ll let us know.
Meanwhile, the Democrats’ position is simple: the debt ceiling needs to be raised, without conditions. Period. And that’s just what’s going to happen. There’ll be some hemming and hawing between now and then, but Democrats are going to win this, and Republicans are going to lose, and look like fools. Given that, if you were Barack Obama, wouldn’t you be perfectly happy to go through this routine a few more times?
By: Paul Waldman, Contributing Editor, The American Prospect, February 5, 2014
“Don’t Even Give Them A Fig Leaf”: Democrats Should Call The GOP’s Debt Ceiling Bluff
“We don’t want ‘nothing’ out of this debt limit,” Rep. Paul Ryan (R-Wis.) said in December.
With a deadline to raise the debt ceiling approaching this Friday (though Treasury Secretary Jacob Lew has said he can manage until the end of February), House Republicans are indeed talking about what they’d like in exchange for upping the nation’s borrowing limit. However, their internal talks aren’t going so well.
The GOP’s two leading ideas for handling the debt ceiling — tying it to a provision mandating the construction of the Keystone XL pipeline, or one tweaking ObamaCare — fell apart Wednesday due to a lack of Republican support. Both would have included a one-year extension of the debt ceiling.
More from The Washington Post’s Robert Costa:
Both ideas were debated at a conference meeting and members expected the conference to coalesce around one of the plans by later this week.
That playbook soon fizzled, however, once GOP leadership aides fanned out throughout the Capitol to take the temperature of members about the plans. Instead of finding growing support, they found unease and complaints, with myriad concerns raised by the House’s right flank. [Washington Post]
Sound familiar?
It should. Republicans folded twice last year on their debt ceiling demands after realizing that threats to plunge the nation into potential financial chaos aren’t too popular with voters.
Just a few months ago, Republicans entered the debt ceiling and government funding talks with a fantastical list of demands. The ask rapidly shrank, though, when Democrats refused to budge. Yet House leadership, fearful of angering the party’s right wing, refused to give in either.
The plan backfired, and Republicans came away with nothing except historically low poll numbers:
For Republicans to think they have any more leverage now is just delusional.
President Obama has insisted that Congress send him a clean debt ceiling bill, meaning one free of any extraneous provisions. Public opinion is on his side. A recent CNN survey found that 54 percent of Americans would blame the GOP if the debt ceiling isn’t raised. Only 29 percent would blame Obama.
Speaker of the House John Boehner (R-Ohio) reportedly has a Plan B in the works that would swap the debt ceiling hike for the restoration of some military benefits. Yet there is no guarantee the plan could overcome the objections on the right, since it would technically raise spending, something anathema to Tea Partiers. And even if it were to somehow get the support of a majority of the GOP caucus, House Democrats reaffirmed Wednesday that they wouldn’t bargain, period.
The whole standoff is reminiscent of Rep. Marlin Stutzman’s (R-Ind.) oblivious remark about the debt ceiling standoff back in October: “We have to get something out of this. And I don’t know what that even is.” Republicans want something, anything, in exchange for a debt ceiling vote, but they can’t even settle on what that something might be.
The bottom line is that since Republicans caved in the past, there’s no reason to believe they won’t cave again. Boehner himself admitted earlier this week that “there’s no sense picking a fight we can’t win.”
The GOP can’t win. Democrats should call that bluff and not even give them a fig leaf.
By: Jon Terbush, The Week, February 6, 2014
“Holding A Blank Ransom Note”: GOP Had A Plan On the Debt Ceiling, But Now Have Absolutely No Idea What To Do Next
Last spring, House Republican efforts to hold the debt ceiling hostage quickly became a fiasco – Democrats refused to play along and Congress passed a clean increase. Last October, House GOP efforts to hold the debt ceiling hostage were arguably even worse – the debacle coincided with a humiliating shutdown, and ended with another clean increase.
Despite this recent history, Republican lawmakers once again said they expected some kind of major policy concession or they would once again push the nation towards a default. Say hello to Debacle #3.
House Republican leaders are at a loss on how to move a debt limit increase.
A GOP leadership aide told CQ Roll Call that after an informal canvas of the House Republican Conference through member meetings and phone calls over the past week, leaders concluded that the top two sweeteners could not attract enough Republican support to pass a debt ceiling hike.
Going into this week, House Republicans had narrowed their scope: they would refuse to pay the nation’s bills unless Democrats gave them either (a) the Keystone XL pipeline and its 50 permanent jobs; or (b) the elimination of risk corridors in the Affordable Care Act, which would add $8 billion to the deficit and risk higher premiums on consumers.
In reality, it was highly unlikely the GOP would get either concession – Democrats don’t see the need to pay a ransom if the hostage takers are bluffing – but Republicans seemed certain they’d seek one concession or the other.
That is, until today, when House GOP leaders suddenly realized that rank-and-file House Republicans aren’t on board with either idea. And since these measures apparently don’t have 218 GOP votes, Republicans would need Democratic support to pull off their own hostage crisis, which isn’t going to happen.
So where does this leave the House of Representatives three weeks before Congress needs to act on the debt limit? Lost and directionless.
A leadership aide told Roll Call, “We are mulling other options and trying to figure out the best way forward on this.”
Or put another way, “We had a plan, but now have absolutely no idea what to do next.”
It’s not too tough to predict how this will play out.
That left Republican leaders with no clear alternative to addressing the debt limit, which the Treasury Department has said needs to be raised by the end of February.
Instead, it now appears that a combination of Republicans and Democrats will be needed to get a debt-limit boost through the House.
And that means a clean debt-ceiling increase, which was the inevitable outcome in the first place.
The lingering question isn’t why GOP leaders are struggling in this fight; it’s why GOP leaders agreed to launch this fight knowing in advance they’d lose.
By: Steve Benen, The Maddow Blog, February 5, 2014
“Nobody Is Falling For This”: House Republicans Make Their Regularly Scheduled Threat To Destroy The Global Economy
House Republicans will huddle at their annual retreat next week to decide what will they demand in exchange for raising the debt ceiling.
If the limit on how much the government can borrow to pay off debts Congress has already voted to incur is not raised by late February, the U.S. will default purposely for the first time in American history, triggering a financial crisis that many experts feel would be at least as devastating as the economic meltdown of 2008, which put millions out of work and destroyed trillions in wealth.
The government shutdown in October dominated the discussion during the weeks leading up to the last debt limit crisis. Republicans released a comical list of demands. The White House offered nothing, and that’s essentially what Republicans accepted when they folded on the government shutdown.
Earlier in 2013, Republicans demanded that the Senate pass a budget in exchange for raising the debt limit. The Senate agreed and House Republicans followed the strategy of Senator Ted Cruz (R-TX) and refused to go into conference with Democrats in the upper house — 18 times. And that’s how we got the shutdown.
Of course, you only have to feed a stray once to keep it scratching at the door. In 2011, House Republicans successfully used the debt limit to extract the automatic cuts known as the sequester, while triggering a near-panic that erased some 1,200 points from the Dow. Because the House has folded twice since then, Wall Street now takes the GOP’s threats as seriously as a Sarah Palin presidential bid, even when America was just hours from a default in October.
House Speaker John Boehner (R-OH) seems to have taken the reins of his caucus after the shutdown disaster and has since passed a two-year budget with little drama over the objections of the outside groups that backed Cruz last year. But the man who negotiated that deal — Rep. Paul Ryan (R-WI) — was one of the driving forces behind the 2011 crisis and is saying the House will demand something in exchange for raising the debt limit. The chairman of the Budget Committee has keyed in on the so-called “Obamacare Bailout,” which not a bailout at all, but a complex set of mostly deficit-neutral mechanisms that could help insurers if they are forced to take on too many sick customers, or could help cut the deficit if they don’t.
The problem for the GOP is the same mechanism exists in Medicare Part D, which was signed into law by George W. Bush and passed by Republicans — including Paul Ryan.
Still, Republicans plan to dare the president to default “to preserve a massive bailout for insurance companies” knowing that what they’re saying is “one enormous lie.”
Will Republicans give in when they recognize that the president will not cave to their demands, as he has vowed not to over and over again?
New York magazine’s Jonathan Chait believes they will.
Chait — who called the last debt ceiling standoff a domestic “Cuban Missile Crisis,” which the president won — notes that the House GOP’s argument has devolved from sanctimonious prattle about the debt to a straight-up demand for scattershot “concessions,” which only makes sense if they want to destroy the economy and need some incentive not to do so.
“But you can only try this bluff once,” Chait wrote. “The only way it could still work would be if Obama either paid a ransom or Republicans shot the hostage. Once the mark knows you’re bluffing, it’s over. You can’t do it again. Nobody is falling for this.”
The GOP’s debt scaremongering made a little sense in 2010 when the deficit was over $1 trillion and the long-term debt projections were skyrocketing — though threatening default increased the deficit and an actual default would have exploded it astronomically. But the deficit has been cut in half, mostly thanks to the end of some of the Bush tax breaks for the rich, and any threat of a long-term debt “crisis” may be disappearing, thanks to Obamacare.
Now the GOP’s theatrics just play into the notion that they blind obstructionists. And if they go too far, they could actually blow the 2014 elections.
Speaker Boehner needs his bluff to be taken seriously by only one constituency — a majority of his caucus.
The 50-70 members of the “suicide caucus” who are more aligned with outside conservative groups than the Speaker are already furious about the budget deal. They’re plotting a rebellion over piecemeal immigration reform that Boehner is preparing to take up, and they’re even planning on joining a retreat organized by Heritage Action that will immediately follow the one being held by leadership.
Boehner has to appear that he’s willing to default up until the exact moment when the pressure from the business community forces him to cave. And hopefully then there will be enough Republicans behind him when he does, so he can prevent a needless catastrophe at the last possible moment.
By: Jason Sattler, The National Memo, January 24, 2014
“We Don’t Want Nothing Out Of This Debt Limit”: Paul Ryan Says He Isn’t Done Holding The Economy Hostage
In the spectacular Republican burnout at the end of the October government shutdown, it was easy to miss that America came within just hours of a full economic meltdown.
The brinksmanship over the demand to defund Obamacare or at least completely maim it lasted for 16 days and cost an estimated $24 billion. But if the standoff had gone on just another day longer, the debt ceiling would have been breached, causing economic chaos.
It’s difficult to predict what kind of damage the economy might have suffered, because no Congress had ever been stupid enough to default on our debts on purpose. The debt limit crisis of 2011 cost the stock market thousands of points and stunted job creation for months. There wasn’t a similar effect in 2013 because Wall Street assumed the GOP was crying wolf, and they were right.
But one mistake, one procedural error, one coup against a congressional leader could have sparked the beginning of a default. And many economists believe the results would have resembled the 2008 financial crisis — but worse.
As she’s sold the budget deal she negotiated with House Republicans that doesn’t extend the debt limit, Senator Patty Murray (D-WA) has said, “We have brought certainty and stability.”
And the economy does seem to be more stable since the GOP capitulated in October. “The volatility of the U.S. dollar in the last 90 days fell to 4.93 percent on Dec. 13 from a yearly high of 7.34 percent in September as a shutdown and debt ceiling crisis loomed, according to the Bloomberg U.S. Dollar Index that represents 10 major currencies weighted by liquidity and trade flows,” Bloomberg‘s Derek Wallbank and Kathleen Hunter noted.
But Murray’s partner, Rep. Paul Ryan (R-WI), seems intent on disrupting that stability.
“We don’t want nothing out of this debt limit,” he told Fox News Sunday.
In other words, House Republican demands are forthcoming. The last time they put together a list of such demands, it was an insane laundry list of right-wing wishes cribbed from the Koch Brothers’ letter to Santa. Somehow being the party held responsible for the greatest financial crisis in a half-century has given Republicans the freedom to boldly threaten a return to such a crisis again and again, without fear of destroying their party.
The president offered, in return, nothing. Obviously regretting setting the precedent that the economy could be held hostage, President Obama has vowed never to negotiate over the debt limit again.
With Republican factions warring with themselves and everyone in Washington seeing their approval ratings shrink, would they dare play chicken with the economy as the midterm elections rapidly approach?
Paul Ryan knows he can’t afford not to at least seem as if he’s willing to do so without losing the Tea Party support that makes him such an asset to House Speaker John Boehner (R-OH). And the president knows he can’t afford to give in.
The result is that another crisis has been averted, but a far worse one looms.
By: Jason Sattler, The National Memo, December 16, 2013
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