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Republicans Ignored Warnings On Paul Ryan Plan

It might be a political time bomb — that’s what GOP pollsters warned as House  Republicans prepared for the April 15 vote on Rep. Paul Ryan’s proposed budget, with its plan to dramatically remake Medicare.

No matter how favorably pollsters with the Tarrance Group or other firms spun  the bill in their pitch — casting it as the only path to saving the beloved  health entitlement for seniors — the Ryan budget’s approval rating barely budged above the  high 30s or its disapproval below 50 percent, according to a Republican  operative familiar with the presentation.

The poll numbers on the plan were so toxic — nearly as bad as  those of President Barack Obama’s health reform bill at the nadir of its  unpopularity — that staffers with the National Republican Congressional  Committee warned leadership, “You might not want to go there” in a series of  tense pre-vote meetings.

But go there Republicans did, en masse and with rhetorical gusto — transforming the political landscape for 2012, giving Democrats a new shot at  life and forcing the GOP to suddenly shift from offense to defense.

It’s been more than a month since Speaker John Boehner (R-Ohio) and his  lieutenant, Majority Leader Eric Cantor (R-Va) boldly positioned their party as  a beacon of fiscal responsibility — a move many have praised as principled, if  risky. In the process, however, they raced through political red lights to pass  Ryan’s controversial measure in a deceptively unified 235-193 vote, with only  four GOP dissenters.

The story of how it passed so quickly — with a minimum of public  hand-wringing and a frenzy of backroom machinations — is a tale of colliding  principles and power politics set against the backdrop of a fickle and anxious  electorate.

The outward unity projected by House Republicans masked weeks of fierce  debate, even infighting, and doubt over a measure that stands virtually no  chance of becoming law. In a series of heated closed-door exchanges, dissenters,  led by Ryan’s main internal rival — House Ways and Means Committee Chairman Dave  Camp (R-Mich.) — argued for a less radical, more bipartisan approach, GOP  staffers say.

At a fundraiser shortly after the vote, a frustrated Camp groused, “We  shouldn’t have done it” and that he was “overridden,” according to a person in  attendance.

A few days earlier, as most Republicans remained mute during a GOP conference  meeting on the Ryan plan, Camp rose and drily asserted, “People in my district like Medicare,” one lawmaker, who is now having his own  doubts about voting yes, told POLITICO.

At the same time, GOP pollsters, political consultants and House and NRCC  staffers vividly reminded leadership that their members were being forced to  walk the plank for a piece of quixotic legislation. They described for  leadership the horrors that might be visited on the party during the next  campaign, comparing it time and again with former Speaker Nancy Pelosi’s  decision to ram through a cap-and-trade bill despite the risks it posed to  Democratic incumbents.

“The tea party itch has definitely not been scratched, so the voices who were  saying, ‘Let’s do this in a way that’s politically survivable,’ got drowned out  by a kind of panic,” a top GOP consultant involved in the debate said, on  condition of anonymity.

“The feeling among leadership was, we have to be true to the people who put  us here. We don’t know what to do, but it has to be bold.”

Another GOP insider involved to the process was more morbid: “Jumping off a  bridge is bold, too.”

Time will tell whether the Medicare vote, the most politically  significant legislative act of the 112th Congress thus far, will be viewed by  2012 voters as a courageous act of fiscal responsibility — or as an unforced  error that puts dozens of marginal GOP seats and the party’s presidential  candidates at serious risk. That question might be answered, in part, this week  during a special election in New York’s 26th Congressional District, in which  Republican Jane Corwin appears to be losing ground to Democrat Kathy Hochul.

The GOP message team is already scrambling to redefine the issue as a  Republican attempt to “save” Medicare, not kill it.

But the party’s stars remain stubbornly misaligned. Presidential hopeful Newt  Gingrich candidly described the Medicare plan as “right-wing social engineering”  — only to pull it back when Ryan and others griped. And Priorities USA Action,  an independent group started by two West Wing veterans of the Obama  administration, was out Friday with its first ad, a TV spot in South Carolina  using Gingrich’s words to savage Mitt Romney for saying he was on the “same  page” as Ryan.

“The impact of what the House Republicans have done is just enormous. It will  be a litmus test in the GOP [presidential] primary,” said former White House  deputy press secretary Bill Burton, one of the group’s founders.

“I couldn’t believe these idiots — I don’t know what else to call them — they’re idiots. … They actually made their members vote on it. It was  completely stunning to me,” said former Pennsylvania Gov. Ed Rendell, a Democrat  who worked hard to win over the western part of his state, which has among the  highest concentration of elderly voters in the country.

It was also the site of some of the Democrats’ worst losses in 2010 — three  swing House seats Democrats hope to recapture next year, largely on the strength  of the Medicare argument.

“Look at [freshman House members in the Pittsburgh-Scranton area], they make  them vote on this when they’re representing one of the oldest districts in the  country?” Rendell asked.

“We have a message challenge, a big one, and that’s what the polling is  showing,” conceded Rep. Patrick McHenry (R-N.C.), a former Karl Rove protégé who  enthusiastically backed the Ryan plan. “There’s no way you attack the deficit in  my lifetime without dealing with the growth of Medicare. Do we get a political  benefit from proposing a legitimate solution to a major policy problem? That’s  an open question.”

The House Republican leadership had hinted at an emerging plan to tackle  entitlement reform on Feb. 14 — the day Obama released his budget without  reforms to Medicare, Medicaid and Social Security.

Cantor caught Hill reporters by surprise when he said, nonchalantly, that the  Republican budget would be a “serious document that will reflect the type of  path we feel we should be taking to address the fiscal situation, including  addressing entitlement reforms.”

But there were also internal motivations in the decision to go big on  Medicare, rooted in Boehner’s still tenuous grasp of the leadership reins,  according to a dozen party operatives and Hill staffers interviewed by  POLITICO.

Republican sources said Boehner, who has struggled to control his  rambunctious new majority, needed to send a message to conservative upstarts  that he was serious about bold fiscal reform — especially after some of the 63  freshmen rebelled against his 2011 budget deal that averted a government  shutdown.

Then there’s the ever-present friction between Boehner and Cantor, who, along  with Minority Whip Kevin McCarthy (R-Calif.), has positioned himself as the next  generation of GOP leadership and champion of the conservative freshman class.

Boehner’s camp said the speaker has always supported the Ryan  approach — which would offer vouchers to future Medicare recipients currently  younger than 55 in lieu of direct federal subsidies — and proved his support by  voting for a similar measure in 2009.

“Boehner has said for years, including leading up to the 2010 election, that  we would honestly deal with the big challenges facing our country,” said his  spokesman, Michael Steel. “With 10,000 Baby Boomers retiring every day, it is  clear to everyone that Medicare will not be there for future generations unless  it is reformed. The status quo means bankruptcy and deep benefit cuts for  seniors. It’s clear who the real grown-ups in the room are. We’ve told the truth  and led, while the Democrats who run Washington have cravenly scrambled and lied  for partisan gain.”

But that message hasn’t always been quite that clear. On several occasions,  Boehner has seemed squishy on the Ryan budget. In talking to ABC News, Boehner  said he was “not wedded” to the plan and that it was “worthy of consideration.”

Still, even if Boehner had opposed the plan — and his top aide, Barry  Jackson, expressed concerns about the political fallout to other staffers — he  probably couldn’t have stopped the Ryan Express anyway, so great was the push  from freshmen and conservatives.

That’s not to say some of the speaker’s allies from the Midwest didn’t try.  Camp and Ryan hashed out their differences in a series of private meetings that,  on occasion, turned testy, according to several GOP aides. Camp argued that the  Ryan plan, which he backed in principle — and eventually voted for — was a  nonstarter that would only make it harder to reach a bipartisan framework on  real entitlement reform.

A few weeks later, Camp told a health care conference that, from a pragmatic  legislative perspective, he considered the Ryan budget history. “Frankly, I’m  not interested in talking about whether the House is going to pass a bill that  the Senate shows no interest in. I’m not interested in laying down more  markers,” he said.

House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) also made  the case for a more moderate approach — but his principal concern was the  Medicaid portion of Ryan’s plan, an approach he believed wouldn’t do enough to  reduce burdens of indigent care on states.

But even as Democrats high-five over the possibility of Medicare-fueled  political gains, Republicans are trying to muster a unified defense. Cantor, for  his part, stumbled by suggesting to a Washington Post reporter that the Ryan  Medicare provisions might be ditched during bipartisan debt negotiations being  led by Vice President Joe Biden.

Cantor later clarified his remarks and claimed he still backed the Ryan  principles, but no GOP staffer interviewed for this article believed the  Medicare overhaul has any realistic chance of passage.

By: Glenn Thrush and Jake Sherman, Politico, May 23, 2011

May 23, 2011 Posted by | Affordable Care Act, Budget, Congress, Conservatives, Consumers, Deficits, GOP, Government, Health Reform, Ideology, Individual Mandate, Journalists, Lawmakers, Media, Politics, Rep Paul Ryan, Republicans, Right Wing, Seniors, Tea Party | , , , , , , , , , , , , , , , | Leave a comment

The Dick Cheney Of Israel: It’s What Netanyahu Is Doing To Israel Now

Three points about Obama’s recent speeches on the Arab world and the Middle East — the one at the State Department, and the one today at AIPAC. Jeffrey Goldberghas been responding to these in detail.

1) It’s complicated. We should no longer be surprised that a major Obama speech on an important topic is characterized mainly by its embrace of complexity.  Here’s why this matters:

Traditionally the role of a Presidential speech is to say, in bald terms, which side of an issue the Administration is coming down on. Are we going to war, or not? Is the president going to sign a bill, or veto it? People outside the government underestimate how important big presidential speeches are in resolving policy arguments and deciding what an administration’s approach will be.

Obama’s big speeches have been unusual, because the side they come down on is that of complexity. In his classic Philadelphia “race in America” speech: the recognition that every part of our racial mix has its insecurities and blind spots. In his Nobel prize address: that military force is not the answer but is an answer. In his West Point speech a year and a half ago: that the U.S. can’t stay in Afghanistan forever but should stay for a while. You can apply this analysis to almost every major address.

Including these latest speeches. He argued that the United States has “interests” in the Middle East — oil, stability, anti-terrorism — and it also has ideals. So it will try harder to advance its ideals, without pretending it has no (often contradictory) interests. He presented Israel-Palestine in this same perspective. As a meta-point, he said that Israel-Palestine is only part of the larger Arab-world evolution, but is a crucial part. On the merits, he emphasized that Israel has to be secure, that Hamas must accept that reality, that Israel must be able to defend itself — but that it cannot stand pat, wait too long to strike a deal, or forever occupy the West Bank.

My point here is about Obama rather than about the Middle East. From some politicians, for instance those otherwise dissimilar Georgians Jimmy Carter and Newt Gingrich, a collection of “complex” ideas often comes across as just a list. Obama, most of the time, has pulled off the trick of making his balance-of-contradictions seem a policy in itself. Rather than seeming just “contradictory” or “indecisive.” This is unusual enough that it’s worth noting. (And for another time: the vulnerabilities this approach creates.)

2) Israel’s Cheney. By “a Cheney” I refer to the vice presidential version of Dick Cheney, who (in my view) mistook short-term intransigence for long-term strategic wisdom, seemed blind and tone-deaf to the “moral” and “soft power” components of influence, profited from a polarized and fearful political climate, and attempted to command rather than earn support from allies and potential adversaries.

That was bad for the U.S. when Cheney was around. It’s what Netanyahu is doing to Israel now, and Israel has less margin for strategic error than America does.

Right after Obama made his big speech, it was welcomed in most of the world and by most major U.S. Jewish organizations. The immediate critics were Mitt “throw Israel under the bus” Romney, Sarah Palin, Tim Pawlenty, Mike Huckabee, and Binyamin Netanyahu. Explain to me the universe in which this is a wise strategic choice for a nation highly dependent on stable relations with the United States — and on ultimately making an agreement in the region that allows it to survive as a Jewish democratic state.

Think of this contrast: when China’s Hu Jintao came to Washington for a state visit, each of the countries had profound disagreements with the other. (Chinese leaders hate the U.S. policy of continued arms sales to Taiwan, much more so than Netanyahu could sanely disagree with any part of Obama’s speech.) Neither China nor America is remotely as dependent on the other as Israel is on the United States. Yet Obama and Hu were careful to be as respectful as possible, especially in public, while addressing the disagreements. High-handed and openly contemptuous behavior like Netanyahu’s would have seemed hostile and idiotic from either side. As it is from him.

The real service Netanyahu may have done is allowing easier U.S. discussion of the difference between Israel’s long-term interests and his own.

3) God bless this speech. President Obama showed that it is possible to end a speech with … a real ending! The usual one might have sounded odd in a speech largely addressed to the Islamic world. So the release text of his speech concluded in this admirable way:

“We hold these truths to be self evident, that all men are created equal.”

Those words must guide our response to the change that is transforming the Middle East and North Africa — words which tell us that repression will fail, that tyrants will fall, and that every man and woman is endowed with certain inalienable rights. It will not be easy. There is no straight line to progress, and hardship always accompanies a season of hope. But the United States of America was founded on the belief that people should govern themselves. Now, we cannot hesitate to stand squarely on the side of those who are reaching for their rights, knowing that their success will bring about a world that is more peaceful, more stable, and more just.

By: James Fallows, National Correspondent, The Atlantic, May 22, 2011

May 23, 2011 Posted by | Conservatives, Foreign Governments, Foreign Policy, Freedom, GOP, Government, Ideology, Middle East, National Security, Politics, President Obama, Republicans, Right Wing, Terrorism | , , , , , , , , , , , , , , , , , , | Leave a comment

Speaker Boehner In The Temple Of Tea Party Doom

Speaker of the House John Boehner looked as tanned and dashing as Indiana Jones escaping the Temple of Doom last week. He came out alive. He captured some treasure in the form of budget cuts. His friends shake their heads in amazement.

But the worried look on our hero’s face is a sly clue that he knows this is not the end of the movie. It is the start. And the worst is yet to come.

When the Speaker told ABC last week that there is no “daylight” between him and the Tea Party Caucus it was because they are wrapped around his neck like an albatross.

The Tea Party’s tremendous success in the mid-term elections elevated him to the speaker’s chair. But the Tea Party freshmen are all about talk radio rhetoric, campaign slogans and reveling in the widespread discontent with American politics. They have yet to display any capacity to govern.

By forcing the nation to wait on a last-minute deal, the Speaker was able to go back to his Tea Party freshmen and claim he got the best deal possible from the Democratic majority in the Senate and the President. But what he demonstrated to moderate and independent voters, as well as Republicans not entranced by the Tea Party, is that the least experienced, most extreme elements of the party are now defining the Republican brand with hysterical stunt governing.

The Speaker has been around long enough to know Republicans got blamed in the last government shutdown and he told his caucus they likely faced the same fate if there was a shutdown this time. But with widespread doubts among the freshmen as to whether Boehner is sufficiently conservative because he is willing to negotiate with Democrats the Speaker had to pretend he was not compromising. After his long, steady climb to power in Congress it is incredible and sad Boehner now finds himself unable to present himself as a trustworthy, responsible steward of the American government.

That is not the image the Tea Party freshmen want from the Speaker. They want him pulling stunts. They want to hear him attacking the President and calling out the Democrats in Congress as big spenders. And the Tea Party had veto power over the deal.

It is no wonder the Speaker reportedly complained to the Tea Party Caucus early last week that he felt they “abandoned” him when 54 of them voted against him on a continuing resolution.

This is the Tea Party that delighted in the theatrics surrounding a possible shutdown even after Democrats met the GOP’s original demand for more than $30 billion in budget cuts.

And that was before Tea Party freshmen made the Speaker and their own party look shallow and hysterical by turning a serious fight over cutting the deficit into a sideshow on abortion when spending federal money on abortion is already banned.

The polls that once showed Democrats and Republicans sharing blame over a shutdown began to shift against the Republicans. Self-identified Tea Party members made up the lone group open to a shutdown. And in a key shift brought on by the Republican hard-line, the independents who voted with Republicans last fall and said government was too intrusive now tell pollsters they want government to do more.

In a column for the National Journal last week, ace political handicapper Charlie Cook wrote: “Among the worries the party now has is that a government shutdown could get blamed on the GOP.” Looking ahead to debates about major cuts to entitlement spending, such as Medicare, in the 2012 budget, the Republicans now seem to have squandered credibility. Cook concluded that “these party insiders believe that taking on entitlements, specifically Medicare, could jeopardize the party’s hold on the House, its strong chances of taking the Senate and the stronghold that the party has established with older, white voters — not coincidentally, Medicare recipients.”  

 But the Speaker apparently felt he had no choice but to dance to the tune set by the Tea Party freshmen because he is leery of the ambitious young guns on his leadership team, Majority Leader Eric Cantor (R-Va.) and Budget Committee Chairman Paul Ryan (R-Wis.). They are developing their own lines of loyalty among the Tea Party freshmen.

Boehner has seen this movie before. He was a freshman in 1997 when a member of Speaker Newt Gingrich’s team, Rep. Bill Paxon of New York, launched a coup against Gingrich. In addition, elements of the Tea Party are already looking for a candidate to run against Boehner on the charge he is too willing to compromise with Democrats.

Democrats are happy with a weakened Boehner because every public stumble gives middle-of-the road swing voters more faith in President Obama and Senate Majority Leader Harry Reid (D-Nev.). With more budget battles coming soon, the Democrats are looking like steady hands, sensible statesmen as opposed to the reckless and political Republicans.

That leaves Boehner with little running room as the next series of battles over the debt ceiling and next year’s budget comes. At the last hour he survived last week’s fight. But the future does not look good for our hero.

By: Juan Williams, Opinion Writer, The Hill, April 11, 2011

April 12, 2011 Posted by | Budget, Congress, Conservatives, Debt Crisis, Deficits, Democrats, Economy, Elections, GOP, Government, Government Shut Down, Independents, Lawmakers, Medicare, Politics, President Obama, Republicans, Right Wing, Swing Voters, Teaparty, Voters | , , , , , , , , , , | Leave a comment

Risks To Boehner In Debt-Ceiling Brinkmanship

Although John Boehner and the Republicans are coming off what is widely being scored as a victory on the argument over the 2011 budget, they risk overconfidence as Congress turns its attention to the next debate, which is the fight over raising the federal debt limit.

Perhaps the most important piece of reporting that you’ll read on the debt limit debate is this one, from The Times’ Jackie Calmes:

The Republican leader, Senator Mitch McConnell of Kentucky, has privately urged the conservatives not to filibuster, without success, say three people familiar with the talks. He argued that if Republicans did not filibuster and just 50 votes were needed for passage, the Republicans could try to force all the votes to come from the 51 Democrats — including 17 who are up for re-election. But if 60 votes are required because of a filibuster, ultimately some Republicans would have to vote for the increase lest the party be blamed for a debt crisis.

Mr. McConnell is discouraging his colleagues from filibustering a vote to increase the federal debt limit because he knows that, if push came to shove, some of his colleagues would almost certainly have to vote yea. He’d rather it pass in a 51-vote environment, where all of the votes could come from Democrats, than in a 60-vote environment, where at least seven Republicans would have to agree to a cloture motion. 

Although Mr. McConnell’s remarks were made privately, other prominent Republicans have said as much publicly (including Mr. Boehner, who has said that a failure to raise the debt limit would create a “financial disaster,” and the G.O.P.’s designated budget hawk, Paul Ryan, who has remarked that the debt ceiling must be raised and will be raised.)

That doesn’t sound like much of a negotiating position. How to reconcile it against comments from other Republicans, such as Eric Cantor, that the debt ceiling vote will provide Republicans with “leverage” to extract additional policy compromises from President Obama and the Democrats. The obvious answer is that Republicans are running a bluff.

If the Congress does not vote to increase the debt ceiling — a statutory provision that governs how many of its debts the Treasury is allowed to pay back (but not how many obligations the United States is allowed to incur in the first place) — then the Treasury will first undertake a series of what it terms “extraordinary actions” to buy time. The “extraordinary actions” are not actually all that extraordinary — at least some of them were undertaken prior to six of the seven debt ceiling votes between 1996 and 2007.

But once the Treasury exhausts this authority, the United States would default on its debt for the first time in its history, which could have consequences like the ones that Mr. Boehner has imagined: a severe global financial crisis (possibly larger in magnitude than the one the world began experiencing in 2007 and 2008), and a significant long-term increase in the United States’ borrowing costs, which could cost it its leadership position in the global economy. Another severe recession would probably be about the best-case scenario if that were to occur.

A second recession would almost certainly hurt Mr. Obama’s re-election chances, regardless of how articulate he were about trying to pin the blame on the Republicans. But it would also hurt virtually every other incumbent, including the Republicans (and likely also the Democrats) in the Congress.

While it’s hard to know exactly what the political consequences might be — a debt default has never happened before — some combination of the following might occur:

1. Mr. Obama would be significantly less likely to win a second term;

2. Mr. Boehner, Mr. Cantor, Mr. McConnell and other Republicans would have more difficulty retaining their leadership positions in the Congress;

3. All incumbents would have more difficulty winning re-election, both because of the magnitude of the policy disaster and because the debt default (in addition to hurting the poor) would have a large impact on wealthy individuals and corporations, who are key to fund-raising;

4. Similarly, all incumbents, including Mr. Obama, would become significantly more vulnerable to primary challenges;

5. The two major parties would be significantly discredited and might fracture, possibly leading to the rise the rise of a credible presidential candidate from a third-party, or a spin-off of one of the existing parties;

6. A Constitutional crisis might ensue, because the Treasury has contradictory obligations in the event of a debt default with few clear rules (and no precedent) to guide them;

7. The challengers that were elected in 2012 would have significant difficulty retaining their seats in 2014 and 2016 because the fiscal crisis brought on by the debt default would probably last for several years and would lead to extremely unpopular austerity measures — so any immediate-term gains by either party could prove fleeting.

In short, this as close as you can get in American politics to mutually assured destruction. No matter how Machiavellian your outlook, it’s very hard to make the case that any politician with a significant amount of power would become more powerful in the event of a debt default. They also would be harmed personally, since many Congressmen have significant investments in credit, stock or housing markets, all of which would be adversely affected.

A lot of the reporting I’ve seen on the debt limit vote, especially in those publications that focus more on politics than policy, has portrayed it as a zero-sum game. That’s the wrong characterization. In contrast to a government shutdown — which could have some negative consequences for incumbents of both parties, but not ones so large that they couldn’t be outweighed by strategic considerations — a debt default would be a bigger emergency by at least an order of magnitude. Its consequences are also much less linear and much less predicable than those of a government shutdown: you can’t partially default any more than you can be half-pregnant.

Now, that doesn’t mean that Republicans won’t be able to extract any concessions at all out of the Democrats. It’s possible that the White House — which has been risk-averse in recent months as it has focused on Mr. Obama’s re-election — might not be willing to take the chance of something going wrong. It’s possible that the White House could give the Republicans some concessions that they viewed as minor, inevitable, or actually desirable from a political and policy standpoint.

But Mr. Boehner may face just as much risk as Mr. Obama, if not more. He has promised his more conservative members that he will extract significant concessions from the Democrats before he agrees to an increase in the debt limit. A White House that was willing to play hardball could put him to the test, and perhaps cause a substantial loss of face.

I don’t know that this particular (and rather cautious) White House is likely to do that. But the equilibrium outcome is probably some fairly token concessions — enough to provide Mr. Boehner with some cover with the Tea Party but not much more.

That’s assuming, of course, that both sides play the “game” optimally, which is far from assured. If Mr. Obama is a good poker player, he’ll know not to disregard Mr. Boehner’s earlier rhetoric, which gave away the vulnerability of his hand. And he’ll recognize Mr. Boehner’s more recent and more confident rhetoric for what it is: the oldest “tell” in the poker book, a show of strength betraying the ultimate weakness of his position.

By: Nate Silver, Five Thirty Eight, April 11, 2011

April 12, 2011 Posted by | Congress, Conservatives, Constitution, Corporations, Debt Ceiling, Debt Crisis, Democrats, Economic Recovery, Economy, Elections, Federal Budget, GOP, Government, Government Shut Down, Ideology, Lawmakers, Politics, President Obama, Republicans, Right Wing, Tea Party, Voters, Wealthy | , , , , , , , , , , , , | Leave a comment

No More Republican Hostage Strategies: On Debt Ceiling, Just A “Clean Bill”

On Fox News this morning, House Majority Leader Eric Cantor (R-Va.) said he’s prepared to play a dangerous game with the federal debt limit — he’ll help block an extension without “guaranteed steps” on unspecified cuts to public investments.

It is, in other words, another hostage strategy. Last week, the message was, “Give us what we want or we’ll shut down the government.” Going forward, the new message is, “Give us what we want or we’ll wreak havoc on the global economy and trash the full faith and credit of the United States government.

The details of the ransom note apparently haven’t been written yet, but we’re getting clues.

The down-to-the-wire partisan struggle over cuts to this year’s federal budget has intensified concern in Washington, on Wall Street and among economists about the more consequential clash coming over increasing the government’s borrowing limit.

Congressional Republicans are vowing that before they will agree to raise the current $14.25 trillion federal debt ceiling — a step that will become necessary in as little as five weeks — President Obama and Senate Democrats will have to agree to far deeper spending cuts for next year and beyond than those contained in the six-month budget deal agreed to late Friday night that cut $38 billion and averted a government shutdown.

Republicans have also signaled that they will again demand fundamental changes in policy on health care, the environment, abortion rights and more, as the price of their support for raising the debt ceiling.

The stakes of the Republicans’ hostage strategy are significantly higher than the budget fight, at least insofar as the consequences would be more severe. Had the GOP shut down the government, it would have been awful for the economy; if the GOP blocks an extension of the debt ceiling, the results could prove catastrophic. As the NYT noted, “The repercussions in that event would be as much economic as political, rippling from the bond market into the lives of ordinary citizens through higher interest rates and financial uncertainty of the sort that the economy is only now overcoming.” The likelihood of “provoking another credit crisis like that in 2008” is very real.

It’s exactly why Federal Reserve Chairman Ben Bernanke recently warned congressional Republicans not to “play around with” this, adding that lawmakers shouldn’t view the debt ceiling as a “bargaining chip.”

Republicans freely admit they’re doing it anyway. Indeed, they’ve been rather shameless about it.
http://www.washingtonmonthly.com/archives/individual/2011_03/028426.php

It seems to me President Obama’s message should be pretty straightforward: “To prevent a crisis, I expect a clean bill.”

This isn’t complicated. Democrats and Republicans have, routinely, raised the debt limit many times. Neither party has ever held it hostage, or made sweeping demands. Economists, government officials, and even financial industry leaders have all told Republicans to reject the political games and do what’s right.

What’s more, as we discussed yesterday, even Republicans know how this has to turn out. House Speaker John Boehner (R-Ohio) recently said failing to raise the debt limit “would be a financial disaster, not only for us, but for the worldwide economy.” Sen. Lindsey Graham (R-S.C.) said failure to raise the debt limit would lead to “financial collapse and calamity throughout the world.”

Democrats and Republicans can have a larger debate about entitlements and debt reduction in the fight over the next fiscal year budget. But there’s not enough time for that to occur before we hit the debt ceiling.

Just pass a clean bill, prevent a calamity, and get ready for the larger budget fight.

April 10, 2011 Posted by | Congress, Conservatives, Consumers, Debt Crisis, Deficits, Democrats, Economic Recovery, Economy, Federal Budget, GOP, Government, Government Shut Down, Health Care, Politics, President Obama, Republicans | , , , , , , , , , | Leave a comment

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