Backing down from debt limit

The Republican leadership and some of the Congressional Republicans' more thoughtful members are learning to handle the in-your-face radicalism of the Tea Party and John Boehner -- a man now clearly on a limb. 

Yesterday Greg Sargent watched Tom Cole's latest departure from Boehnerland.

On MSNBC today, GOP Rep. Tom Cole — last seen breaking with the GOP leadership’s strategy on the fiscal cliff — dismissed the viability of one of John Boehner’s latest suggestions, i.e., the idea that Republicans might force monthly debt ceiling increases. Boehner had suggested the idea in an interview with Stephen Moore. ...WaPo

Cole looks to the White House for long-term strategy, emphasizing the need for spending cuts but, at the same time, moving away from the draconian, not to say, silly monthly plan of Boehner.  On the Senate side, Mitch McConnell is edging away from Boehner and calls for dramatic debt limit actions.  Above all, they don't want cuts to the military.

All of which points to what may be the most important fact about the whole debt ceiling fight: GOP leaders want to be granted the presumption of leverage based on the threat of default, yet they are not prepared to deliver on that threat. Even worse, they need to somehow signal publicly that they are not really serious about default as an option — otherwise the business community will come down on them hard — while simultaneously maintaining the public posture that the debt ceiling hike really is something Dems will need to pay for with concessions of their own. ...WaPo

Eric Zorn, writing in the Chicago Tribune suggests "fighting crazy with crazy," only he doesn't think it's all that crazy:  Get rid of the damn debt ceiling altogether.

Unorthodox tactics — the platinum coin, the constitutional end run, the stare-down in a perilous game of chicken — might give President Obama a work-around in the coming weeks, allowing for another temporary reprieve. But what he needs, what the nation needs, is a full repeal of the debt ceiling so that no president, no legislative body and no population can ever again be held hostage by zealots. ...Eliminate the debt ceiling or we won't sign off on raising the debt ceiling!

Now that's a crazy threat, and one that stands to blow the minds of Republican House Speaker John Boehner and Republican Senate leader Mitch McConnell.

But if Obama and the Democrats can make the case that the debt ceiling creates needless and extreme economic peril no matter which party is in power and therefore should be retired as a political weapon, it just might work.

If instead they cave again and bargain with the Republicans over the debt ceiling, it will simply mark a time out in an endless game of chicken. And that's even crazier. ...ChiTrib

The National Journal reminds us that the debt ceiling issue came up in 1963, when Douglas Dillon was Treasury Secretary.  He pointed to Congress's experience in 1957, when Eisenhower was still president.

Hitting the ceiling would force the government to delay paying its bills, Dillon argued. It's an idea central to one modern plan to avert a debt default, but it comes with economic consequences, he said.

"That is exactly what happened in 1957, when an unrealistic debt ceiling forced the executive to defer payment on its bills. No expenditures were cut back; they were simply postponed and government contractors had to wait for their money," he said. "The unhappy economic effect of that unrealistic 1957 debt ceiling—in combination with other restrictive fiscal measures—needs no retelling here. But anyone who recalls the lesson of 1957—the year from which we date the pattern of slow economic growth which the president's tax program is designed to alter—is not likely to forget it," he said.

Holding up the debt ceiling "in the name of fiscal responsibility" would only wreak havoc, Dillon argued. "[A]n unduly restrictive ceiling could place this country in an untenable fiscal situation." ...National Journal

Dillon was right.  If he were here now, he'd probably notice something too many of us keep overlooking:  behind all the argybargy of the Republicans -- and most persistently the tea partyers -- is the fervent desire to lame Obama.  Having failed to kill him off, politically, in 2o10 and 2012, they'd like him to exit in 2016 with a "failed" presidency.  Feel free to insert before the President's name in the previous sentence whatever epithet you most closely associate with the Republican's party's racist, know-nothing wing.

Oh... and by the way... from Think Progress:

... The Center for American Progress’ Michael Linden and Michael Ettlinger show, three-quarters of deficit reduction since 2011 has been due to spending cuts:

Since the start of fiscal year 2011, President Barack Obama has signed into law approximately $2.4 trillion of deficit reduction for the years 2013 through 2022. Nearly three-quarters of that deficit reduction is in the form of spending cuts, while the remaining one-quarter comes from revenue increases. As a result of that deficit reduction, the projected rise in debt levels from today through 2022 has decreased by nearly 10 full percentage points of gross domestic product. In fact, under today’s policies, debt levels in 2022—as a share of GDP—will be only slightly higher than they are expected to be by the end of next year.

Comments

[Paulo McManus]

In a layman's point of view how come the government spent so righteously then strips bout 40% of the people and companies it owes money to. I wonder what Ed Butowsky has to say about this?