What with the federal government continuing to shut down as i write and the question of raising the debt ceiling by Oct 17 (or so) looming even larger, I have too many thoughts and too little space, unless I turn this blog into a booklet.
Fortunately, House Speaker John Boehner has helped simplify matters some by telling colleagues he will not allow us to default on our debt for the first time in history. That’s the biggest economic iceberg to avoid as indicated by the last time we got close to defaulting in 2011. According to a Treasury report, consumer confidence and the stock market plummeted and interest rates spiked. Also, one credit agency lowered our credit rating.
And we didn’t even default, just danced around the cliff of possibility. When Boehner says he will not let a default happen it is BIG NEWS, if you believe him and I do. It means he will allow a measure to come to the floor in the House before Oct 17 that can attract enough votes from each party to pass. That thought figures to settle a lot of nerves here and around the world.
Need I point out that we are what I would call the world’s cornerstone economy? That our currency is used as the reserve currency by all other nations who also buy our government bonds in times of tumult because we are considered the safest place in the world to keep one’s money. Not paying our debts would make us a world class deadbeat with world wide ramifications that defy prediction.
Boehner’s willingness to bring a debt ceiling bill to the floor contrasts with his unwillingness to bring a continuing resolution to extend the budget and reverse the government shutting down. In this matter he seems stuck in searching for some face saving measures regarding the Affordable Care Act (Obamacare), which is what extreme Republicans in the House, egged on by Senator Ted Cruz, have insisted on making part of any continuing resolution (CR) deal.
While the shutdown isn’t as big a deal, economy-wise, as defaulting on our debt payments. economist Mark Zandi has suggested it will have a snowball effect. Now suffering is a matter of a number of individuals, but in four weeks the economy figures to suffer, and suffer exponentially more the longer the shutdown.
With the debt ceiling looming in a couple of weeks, it seems that the two issues will be combined by Congress in some form or fashion, though I couldn’t say what sort of sausage the congressional cooks will paste together. A combination of delays of this and that and short term budget measures and a raised debt ceiling ……..who knows how much? ……supposedly giving them time to come up with a real deal in a month or two….. a song we have all heard often before. But at the moment there is no other.
At least, the Republican extremists that I wrote about in my previous post have lost some of their power to obstruct any kind of reasonable deal. Most Republicans agree with the sentiments of Tea Party types, but many are angry about the Ted Cruz strategy to link dismantling Obamacare to keeping the government open. At a luncheon two days ago he got an earful from several Republican Senators for blasting fellow Republicans who did not agree with his “strategy”, even though his strategy has no end game.
The President seems unlikely to give much ground on Obamacare, so what are the Republicans in the House supposed to do regarding passing another temporary budget? They are now offering the ploy of suggesting refunding the government one piece at a time, like turning the budget into one huge jig-zaw puzzle with all the time in the world to complete. Budget Hawk Grover Norquist dismisses the Cruz “strategy” like so: “He pushed House Republicans into traffic and wandered away”
And no one has been left dodging more cars than the Speaker himself. While stepping up to the plate in terms of the debt issue, thanks to Ted Cruz and company, Boehner is stuck demanding some kind of face saving measure in terms of refunding the government. Perhaps the Obama team will end up offering a small concession or two on Obamacare, like taking away Congress’s exemption from the program and delaying a tax on certain medical instruments. Nothing that really impacts the program much, but can be spun by Republicans into some kind of victory.
Or these issues might become camouflaged in a combined measure to both extend the budget and raise the debt ceiling. Or perhaps Obama will hold firm and try to force the Republicans to cry uncle regarding his health care plan. I’m curious as to how this will play out.
Yesterday President Obama blamed Boehner for preventing a budget deal to be reached by refusing to put the issue to a vote in the House. Obama’s point was well made, but I think the timing unfortunate, as Boehner’s comments about the debt ceiling took place prior to it.
Boehner, unwilling to play games with the debt ceiling this time around, deserves credit for having cast aside the biggest Republican bargaining chip. the possibility of defaulting on the debt, so I wish he had not gotten immediately lambasted by the President for his position on the other main issue, extending the budget.
Oh well, I guess John Boehner is pretty used to being batted around like a Pinata by now, within his own party and without. Even though I usually disagree with what he says and does, I like his fortitude. Remember that movie Being John Malkovich? I wonder what it is like being John Boehner these days.
Ever hear the phrase “a cat on a hot tin roof.”