I haven’t weighed in on this for a few days as I thought it made more sense to watch things develop. But nothing much appears to have changed, even as we get closer to the deadline.
Still, my theory of the case remains this: it all comes down to a number game, and I don’t mean dollars, I mean votes.
Boehner and of late, even McConnell, while seemingly immovable on revenues, do not want to be responsible for a default that could take a fragile frail economy back into recession. But their control over their caucus in the House is tenuous. Their intractability is at least in part, posturing to a) get a better deal (more cuts, less revenues), and b) appease the zealots.
The question is, how many House R’s can they drag along at the end of the day to support a deal that will have at least some revenues. Team Obama/Biden, to their credit, have never wavered on this and that matters too, vote-wise. They can’t get their caucus behind them without revs in the deal, because, as the President pointed out yesterday, no revs would mean putting everything on the spending side of the ledger, and that would do far more harm than good, both to the economy and to the people in it.
I believe the administration can get the D’s behind a package that raises the ceiling and reduces the deficit somewhere between $1 and $2 trillion, includes something in the $500 billion range on revenues, takes on some sacred cows (entitlements), hopefully less on the benefits side than on the costs savings side.
It remains an open question whether Boehner can deliver on some version of the above, but man, he and his team are making it hard to stay calm.
Apparently, yesterday they introduced a new and particularly outlandish theme. From this AM’s WaPo:
“Boehner suggested that the only concession Obama should expect from Republicans is a vote to allow the Treasury to continue borrowing.
‘“Most Americans would say that a ‘balanced’ approach is a simple one: The administration gets its debt-limit increase, and the American people get their spending cuts and their reforms.”’
That is SO not the definition of negotiation.
I hate to go to the “all caps” place, but they leave me no choice.
IT IS NOT THE ADMINISTRATION’S DEBT LIMIT INCREASE…IT’S AMERICA’S DEBT LIMIT INCREASE.
Mr. Boehner, you’ve already accepted a budget—the budget that’s currently in place running the gov’t—that depends on raising the debt ceiling. You then voted for another budget—the Ryan budget—that also depends on raising the debt ceiling by trillions. And by dint of your position, you, among others, are responsible for the economic damage that failing to raise the ceiling will cause.
I’ve already explained my position on Cantor’s canter from the table, but to take this position is to metaphorically walk away from the table.
One can only hope this is more posturing for leverage, but as the graph below shows, it’s getting close to freak-out time.
(Note: got to give it up to a WaPo copyeditor who, riffing off of Obama’s exhorting the R’s to come to the table and “eat your peas,” said that it’s time to “give peas a chance.”
Sorry, dude, the choice is between default and gutting SS, and Obama’s not willing to gut SS before 2013. It’s gonna get real bad.
I wish Obama had the stones to stop payments politically.
I’m surprised more people haven’t called Cantor on “The administration gets its debt-limit increase.”
I’m starting to wonder about the distributional impact of not raising the debt ceiling, especially in light of proposed cuts to Social Security, Medicare and Medicaid. Would the average American be better off with no raise and no cuts to the safety net? How about the top 1% by wealth?
That graph is dead on, Jared, but you could have made it a little more forceful by labeling the Y axis “Rational Markets’ Nervousness” and the spot “We are here.” How much longer before this whole thing blows up regardless of any technical default?
Can the Rs even come up with $2 trillion in cuts which are more than just magical asterisks? In order to get to those numbers you need to make cuts to entitlement programs or defense programs. It is much harder to make cuts when you need to be specific.
Here’s an examination of the tax levels of the OECD nations showing which are paying the highest levels of personal taxes:
The United States, despite its massive and growing deficit, has among the lowest taxation level on earned income among all OECD nations and at a rate that is substantially less than most Eurozone nations.
I understood the Constitution give the Power of the Purse to Congress. Last time I checked, the President was not a member of Congress.
Good call on whose debt-limit increase this is. Time for our Representatives to stop finger pointing and start legislating.
Picture is backwards.
x-axis should just say “time, aug 2”
otherwise it seems like nervousness is declining with “time to aug 2” running out.
Last week, I was flipped out.
This week, it seems that even if (when?) the **government’s** debt ceiling is lifted, the damage done by the political opportunism involved in this whole mess is probably permanent.
This is about raw power. It is also about a system of denial and lies.
I’m only a dumb donut in the peanut gallery, but I feel economically and politically extorted by the GOP. And I’m fed up with it.
There are economic consequences for profligacy, for unreasonableness, for the inability to compromise. We may be about to start to see just how much those things cost.
But as terrible as those things all would be, at least it might force us out of living in a system of lies and delusions.
The majority of the American people have been eating their peas for a long time. When will the economic elite have to eat their peas?
This whole convoluted excercise is way beyond anything rational.
I keep waiting for something logical to happen, but I am begining to think that expecting that out of a process that has swung so far to thr extreme and radical is really just naivete and reflects a an expectation that is essentially a state of denial on my part.
As for people thinking that not raising the debt limit will have no consequence, they are crazy. It may not be exactly on Aug 2, but eventually probably soon after and maybe before, markets will go crazy, the banksters and big businesses will start screaming at everyone, and maybe something will happen. But maybe not. The Zealots have taken over and the Spanish (er- American) Economic Inquistion (or some other form of Fascism) is in full swing.
Kensyians are part of the failed economical school of socialistic ideas in their so-called minds.
Since we have a fiat money system with no intrinsic value, based only on the law of our government, failing to honor our debts would have catastrophic consequences. And since our money is the currency of exchange in the world, there would be ramifications all over the world. With Europe in such a fragile state, it wouldn’t surprise me to see counties in Europe collapse and a severe recession or depression could sweep the world.
We would see a world that would react to our currency as if it where literally a pariah’s posession, and it wouldn’t surprise me to see a more outward manifestation of all the resentment we have built up over the years world wide. Our interest rates would probably rise to the point that we will have added close to a trillion dollars in expense yearly and leave us no choice but austerity for survival’s sake.
I still think Obama should pull a rabit out of the hat, call the Pentagon in and tell them to develop a rapid plan to withdraw from Iraq and Afghanistan and to start figuring out how to dismantle the empire. Lets see how the Republicans would react then.
“WE HAVE MET THE ENEMY AND HE IS US” (circa POGO 1971).
A note on the headline — as a matter of political framing, stating that this is “not Obama’s debt ceiling” isn’t a winning frame for the Dems. Think Nixon’s infamous: “I am not a crook”. If the GOP actually is pushing that line, and the administration engages in a defense against the claim, the administration will lose the PR battle.
As a side note: The administration’s allies in Congress need to go on the attack and force the GOP to defend its position, not visa versa (it’s best if the administration continued to play neutral broker, but someone needs to play bad cop in the negotiations). Framing is an important part of the ongoing negotiations, and a consistent message also matters. One of the things that continues to be frustrating watching both the Dems in Congress and in the White House is the short-shrift that they give to PR and political messaging (sadly it matters).
This is a bit of a tangent. I agree with the substance of the piece. However, seeing the headline, it reminded me of one of the key principles in framing. Better: “It’s America’s debt-ceiling”.
For ease of reference in the discussion of “whose”s:
The debt in question is “The _National_ Debt”.
That’s sometimes emphasized by expressing it in dollars-per-person, dividing the total by the U.S. population.
It’s OUR debt.
But if the Republicans in Congress continue to disclaim ownership (as well as responsibility for management) of the National Debt, it would be only fair to ask each of them, in turn:
“Have you renounced your American citizenship?”
Because, if not, they have no other grounds to deny it’s their debt too.
I hope the DCC can nail those teabaggers in Congress to the wall with their votes against ending oil subsidies and other tax loopholes for corporations.
I like Rep. Ryan’s ideas about the budget. There is excellent commentary on this and Catholic social teaching at http://www.catholicurrent.com/#/.