Tuesday, July 12, 2011

The Debt Ceiling Debate

Over the past few weeks and months, Washington has been bracing for a fight.  With the debt ceiling about to be reached by the end of the month, the President and Congress have to agree to raise the debt ceiling or else the Treasury has to shut down parts of the government, and all sorts of bad things happen.  I'm not sure exactly what, but I'd imagine that hyperinflation would be one of the many fun things around the bend.

Now, with his usual eye for negotiating, Obama has been a complete disaster.  From the get-go, he should have demanded, insisted and cajoled Congress to send him a clean debt ceiling bill.  After all, Wall Street is going to get hit just as hard from a default as anyone else (harder even).  Instead, he opted to listen to their arguments on the long-term debt, giving credence to their economic policies (which are ridiculous).  And he willingly put Medicare and Social Security on the table, which would undermine a great Democratic election point. . .seriously, Mr. President, you are the worst negotiator ever.

What is of equal interest, though, is the interworking of the Republican Party.  The Tea Party faction, which is hard-core conservative, is absolutely refusing to support any increase to the debt ceiling absent serious cuts.  So, for Boehner, the Speaker of the House, to get a deal done, he has to convince Democrats to support the debt ceiling deal.  But if Boehner does that, he will not remain Speaker.  Hell, he may not remain in Congress.  For the past several years, every Republican has been threatened with a primary from a more conservative candidate.  And since these candidates are invariably well-funded, and since legislatures are gerrymandering to make Congressional districts more Republican or more Democratic, these more conservative candidates win. A lot.

So, what has the GOP leadership done?  Well, they've decided to run awaySeriously.  There is an escape hatch in this debate - the 14th Amendment seems to suggest that debt ceiling legislation is unconstitutional because the U.S. government has constitutional requirement to cover its debts.  Now, Obama looked into this idea before, kinda, sort-of, threatening (but not really) to use this provision as an escape hatch in the bargaining.  But his own Treasury Department thought that the 14th Amendment argument was on shaky ground.

Does this mean that Obama will take up the GOP on its offer to continue to raise the debt ceiling?  I have no idea.  What I do know is that neither Boehner nor McConnell cannot negotiate on behalf of the GOP.  Not because they are bad negotiators, but because they do not speak for the Republican rank and file.

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