President Obama and the Democrats certainly deserve enormous credit for hanging tough as long as they have. In the Senate deal, they “win†a relatively short time frame to have to live with the budget cuts imposed by the awful sequester deal. Republicans “win†a shorter extension of the debt ceiling than Democrats want. Additionally, by most accounts, Republicans would get two smallish tweaks to the Affordable Care Act: a tougher income verification process to make sure people are eligible for subsidies, and a one year suspension of a “reinsurance tax†that unions actually asked for, so you could arguably count that as a win for Democrats. Senate Democratic sources say they’ve conceded nothing of value, so it’s not a GOP win, while it continues to make clear that Democrats are the party of compromise and negotiation, which helps all Democrats but particularly those from red states.
So far, so good, right? I’m not sure. I worry that granting Republicans even tiny tweaks to the ACA would seem to do what the president and Democratic leaders promised they wouldn’t: reward debt-ceiling/shutdown hostage-taking, however modestly. If such a deal gets through the House in any way – and that is not a given, at all — trust Speaker John Boehner and other leaders to hype those changes as major concessions. And that’s the point of giving them anything in the first place, I presume.
But I don’t know why we’d assume that the default-denying, Confederate flag-tolerant, flat-earth caucus of the GOP would come away from this experiment in political terrorism chastened. They don’t believe the polls, which are dreadful for them. They are capable of living on bread and water and fantasy, politically. In their Fox News bubble, it’s always sunny in Tea Party land, so if they are forced to suffer this “defeat†– almost certainly with Democratic votes in the House – why would we assume they’d learn their lesson and just go away? I can imagine even Sen. Ted Cruz reassuring the rubes who are writing him checks that he’s “won†this round — and the next round will be even better.
And, sure enough, bagger cheerleader Robert Costa is certain the House will just crap on the ball and punt it back to the Senate
As of 8:30 a.m., House conservatives believe the leadership is well aware of their unhappiness, and they expect Boehner to talk up the House’s next move: another volley to the Senate, which would extend the debt ceiling, reopen the government, and set up a budget conference, plus request conservative demands that go beyond the Senate’s outline.
“What they’ll come up with in the Senate will not get the support of most House Republicans,†predicts a House conservative strategist. “And thus, after a lot of hand-wringing, it’ll be DOA. Just like with BCA in 2011, the most important question is, what can pass the House? Everything else is subordinate to that. So, while the Senate is taking the lead right now, I expect the focus will soon shift back to the House, and back to the idea of doing a six-week extension of the debt ceiling. While Obama and Reid won’t like it, they don’t want to go past October 17, either. The politics of the debt ceiling are different from the shutdown. And so, we feel they’ll reluctantly accept it as a stopgap measure.â€
Dylan Scott just posted this at TPM:
Here are the details of the new House bill that the leadership presented to Republican members at a closed door meeting Tuesday morning, according to multiple House GOP sources.
- Temporary spending bill to re-open the government until Jan. 15.
- Increase the debt limit enough to last until Feb. 7.
- A two-year delay of Obamacare’s medical device tax.
- A requirement that the Obama administration verify the income of Americans receiving tax subsidies through Obamacare (specifics pending).
- A revised version of the so-called Vitter Amendment, in this case requiring Congress members and executive department officials like President Obama — but not their staffs — to purchase insurance through the law’s marketplace without federal employer subsidies.
- Eliminates Treasury Department’s ability to use “extraordinary measures” to avoid default.
The House is expected to vote on the bill today.
It’s effectively a counteroffer to the deal brewing between Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY) in the other chamber. It has a few similarities — most importantly, the dates for funding the government and raising the debt limit appear roughly the same — but some key differences.
It adds the medical device tax delay and revised Vitter amendment. It also removes a reported element of the Senate deal, which would have delayed Obamacare’s reinsurance tax, a change that Senate Democrats sought in exchange for the income verification piece.
The delay in the “reinsurance tax” mostly benefited unions, I understand
The Dem idea was to push the deadlines for the next round of hostage-taking back as close to the 2014 midterms as possible, and dare the Republicans to make ransom demands. But I don’t think the January and February dates are close enough to the midterms to matter. At this point, we might as well pass the default date, IMO. A lot of the damage already is done, anyway.
And here’s the problem: we’re already well past the point at which that certainty has been called into question. Fidelity, for instance, has no US debt coming due in October or early November, and neither does Reich & Tang:
While he doesn’t believe the U.S. will default, Tom Nelson, chief investment officer at Reich & Tang, which oversees $35 billion including $17 billion in money-market funds, said that the firm isn’t holding any U.S. securities that pay interest at the end of October through mid-November because if a default does take place, “we’d be criticized for stepping in front of that train.â€
The vaseline, in other words, already has sand in it. The global faith in US institutions has already been undermined. The mechanism by which catastrophe would arise has already been set into motion. And as a result, economic growth in both the US and the rest of the world will be lower than it should be. Unemployment will be higher. Social unrest will be more destructive. These things aren’t as bad now as they would be if we actually got to a point of payment default. But even a payment default wouldn’t cause mass overnight failures: the catastrophe would be slower and nastier than that, less visible, less spectacular. We’re not talking the final scene of Fight Club, we’re talking more about another global credit crisis — where “credit†means “trustâ€, and “trust†means “trust in the US government as the one institution which cannot failâ€.
While debt default is undoubtedly the worst of all possible worlds, then, the bonkers level of Washington dysfunction on display right now is nearly as bad. Every day that goes past is a day where trust and faith in the US government is evaporating — and once it has evaporated, it will never return. The Republicans in the House have already managed to inflict significant, lasting damage to the US and the global economy — even if they were to pass a completely clean bill tomorrow morning, which they won’t. The default has already started, and is already causing real harm. The only question is how much worse it’s going to get.
I also think this argues for the wisdom of the President citing the 14th Amendment to raise the debt ceiling himself. If the world sees that the U.S. debt really isn’t subject to the whims of congressional extremists, maybe some of the damage can be undone
Yesterday the media started making all sorts of happy noises about Reid and the Turtle negotiating in the Senate, but I couldn’t understand why. There’s never been any reason to believe the Nutjobs in the House would agree to anything. And they still don’t. The most interesting thing about the latest news is the way it appears that Ted Cruz has chosen to not oppose the Senate deal outright, by blocking it on the Senate floor (though he might still) but instead has spent the overnight pumping up the Nutjobs to do the dirty work in the House. He’s happy to destroy the world economy, but being on videotape doing it would be bad for his Presidential campaign.
I’m afraid the notion of the United States as the rock-solid guarantor of the world’s financial system is joining the vanished truths of my youth. Oh well. I guess maybe a decade or two of worldwide economic collapse and struggling recovery might at least slow down the acceleration of climate change. Sigh.
This is what happens when a timid and drunken mouse like The Squeaker of the Trolls John Boehner, is left trying to herd rabid rats.
And you’ve got to love it, they’re now saying that there’s a chance that after the House makes a counter-offer, that the members will then go home to the safe havens of their districts in JesusWon’tLetNothin’HappenToMurkaCauseHeLovesItSoIstan.
FSM, what fools these mortals be!
Mint that “Trillion Dollar Coin,” Mr. President!
Engrave Ted Cruz’s face with a Confederate flag on one side, and the engraving of a sphincter, on the other!!!
And tell the Cruz-ader, Mr. President, to go and do something anatomically impossible to himself!!!!
“At this point, we might as well pass the default date, IMO. A lot of the damage already is done, anyway”
Wow really? I think you are underestimating the effects of default; so far the markets seem to have accounted for the fact that boner is a drunk who sleeps late and can’t get his work done ahead of time, but if the deadline is passed all bets are off.
uncledad — read the passage quoted. The real damage won’t just be a market dive. Long term, the biggest disaster for the US. would be that US Treasury bonds would no longer be the cornerstone of the global economy. But the House baggers are putting us in dander of that happening, anyway.
uncledad,
Normally, you eventually let the kid who likes to play with matches get burned, to teach him (OT – I haven’t heard to too many female pyromaniacs) a lesson.
But, now is not the time, since he’s heading for the home’s oil and natural gas tanks!
Since Boehner thinks his Speakership if more important than the stability of our countries and the worlds economies, the President needs to risk impeachment, and either do that coin, or use the 14th Amendment.
He’ll risk nothing, except the sociopathic peacocks in the House and Senate, being given some air time.
The Senate won’t impeach.
And he can look like a hero, for risking it.
And then, maybe – MAYBE – the repercussions from the impeachment, might – MIGHT – finally do enough damage to the Republican brand, that they’re reduced to a minor rump party, full of sociopathic assholes.
I think it’s also worth noting that we actually don’t have a firm, clear “default date.” What we’ve been hearing is Jack Lew’s estimate, isn’t it? And he’s basing that on all kinds of data that’s changing constantly. And of course he’s already at the point where he’s got to keep the nation’s creditors cool as long as he can while we wait for Congress to decide if they’re going to give him any money.
Right; we’re not going to wake up on October 17 with bread lines forming around the block. Yes, things will get worse, but the “getting worse” already has started, and going a day or two past an arbitrary date may not make that much difference. More than a day or two is something else entirely.
“But the House baggers are putting us in danger of that happening, anyway”
I agree damage to the treasury has already been done, but passing the default and the ensuing chaos will all but assure a recession and a possible global collapse, I’d rather not see that happen.
The president using the 14th amendment or other remedies is almost as bad as just blowing past the default date. I mean, it’s not like we won’t pay all of our bills eventually … everybody knows that. Just that defaulting destroys confidence that a US Treasury Bond is really a safe investment. However, bonds issued as a result of some kind of constitutional technicality will ALSO be considered unsafe … probably MORE unsafe. The risk that some court will just invalidate them all at some point is too great.
The latest demands issued by the house, if the above quoted is correct, are not actually that bad, I think we could live with them … HOWEVER, accepting them puts the debt ceiling permanently in play as a “negotiating” tactic, which will similarly make people doubt that US treasury bonds are safe, given that this same fight is going to happen every single time the debt ceiling needs to be raised from now on.
My hope, at this point, is that the house republican leadership is aware of the consequences, and will pass the senate bill with democratic and a handful of republican votes at the last possible second. It will make them unpopular with the tea party folk, but if the global economy blows up and people mostly blame the tea party, I have a feeling the tea party won’t exist as a political entity for long, nor will the GOB as we know it today.
Very conflicted on this one.
-Ian
“getting worse” already has started
To repeat something I read elsewhere today: our trust and credibility is evaporating by the minute, never to be recovered again.
Ian…Excellent comment. It sort of echoes what Obama said in his press conference the other day. And for that reason I believe Obama understands the full implications of what a default would mean in terms of economic damage , and he also understands the psychological damage that would result if he allows the concept of extortion to attach itself to our democracy.
If I were to guess.. I’d say that Obama will stand firm against the tactic of extortion because it will be a lot easier for us as a nation to restore a shattered economy then a shattered democracy. I’m conflicted also, but I’ll put my faith in Obama and won’t let fear dictate.
The teapublicans are now saying that if the US defaults on its debt, for Obama its an impeachable offense! To make sure, they put the demand — “Eliminates Treasury Department’s ability to use “extraordinary measures†to avoid default” — in their version of the bill. This is a tell that what this is really about is them keeping the threat of default as a hostage weapon.
This is already an “extraordinary” situation, and equally extraordinary measures to address them are reasonable. That said, Obama should make clear now, that he will resort to the 14th Amendment to make sure the debts are not just honored, but honored on time. As Big Dog said, I’d go 14th Amendment and force the courts to stop me.
If the world knows Obama is ready to whatever means available to defuse the bomb these idiots in the House has lit under all of us, it will calm investors and allies that even though our democracy makes allowances for having these crazy people in government, we have the means to limit their destruction to themselves.