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Tuesday, October 15, 2013

Boehner's Plan B Pushing U.S. to the Brink of Default

     Here we go again. As Illinois Democratic Senator Dick Durbin said, We've seen this movie before. At this point we have-what else? Lots of gridlock and confusion.

     “McConnell’s waiting on Boehner and Boehner is waiting on his caucus. If that sounds like a familiar script, we’ve seen this movie over and over again,” said Majority Whip Dick Durbin (D-Ill.). “McConnell will not work this as long as the Boehner question is open.”

     Read more: http://www.politico.com/story/2013/10/senate-budget-default-debt-ceiling-government-shutdown-98333_Page2.html#ixzz2hpsR0dLc


     Now we can argue what the purpose of Speaker Boehner's actions were today but the effect has been to gum up the works. Just this morning I wrote about Larry Summers argument that our system of government is not inherently dysfunctional. \


     I must be honest, Larry, Exhibit One is not fortuitous for your argument. While we went into the day with the hope that Reid and McConnell were close to a deal, Boehner's plan has managed to blow everything up. 


      Again, we've seen this movie before. Just like in the fiscal cliff or the debt ceiling deal of 2011, Boehner's GOP caucus can't get anything done. They came up with a plan this morning that was a nonstarter:

     "House Republican leaders, apparently desperate to prevent any House vote on the emerging bipartisan Senate deal to end the crisis, have rolled out a new plan designed to reopen the government and lift the debt limit, but on their own terms. The House GOP plan would fund government until January 15th and lift the debt limit into early February, just as the Senate one does — but also require Dems accept significant changes to Obamacare, which they aren’t going to do."

    "Dem Rep. Chris Van Hollen, a key ally of the Dem leadership and White House, told House Democrats at a private meeting today that a vote for the new House GOP plan is a vote for a deliberate Tea Party effort to sabotage the emerging Senate deal."
     "In an interview with me, Van Hollen strongly suggested it will get no Democratic votes, which could call into question the ability of Republicans to pass this plan through the House, as some conservatives are already balking at it because it raises the debt limit."
   “This has no Democratic support,” Van Hollen told me. “It is a recipe for default. The Democratic leadership told the caucus that a vote for this is a vote for default and for keeping the government shut down. Democrats understood that this is exactly what this was.”
    "Van Hollen also ruled out the possibility of Dems accepting any middle ground between the House GOP plan and the Senate compromise — and again reiterated that anything that requires significant concessions from Dems under threat of default and economic havoc is a nonstarter. The House GOP plan includes a two year repeal of the medical device tax and the elimination of Obamacare subsidies for members of Congress and staff."
     "Pressed on whether Dems would accept any compromise between the two, Van Hollen said: “No. The message is, let the bipartisan Senate effort work. Don’t sabotage it. The whole purpose of the Tea Party caucus’ plan is to sabotage any bipartisan agreement.”
     GOP Arizona Senator, John McCain, says the Democrats aren't being reasonable:
     But Republicans said it was Democrats who appeared be pushing the country to the edge for their no-compromise stance with the House GOP.
    “It shows the president and Democrats are much more interested in winning than they are in resolving the situation,” said Sen. John McCain (R-Ariz.), who had been sharply critical of tea party conservatives’ tactics in the shutdown fight.


     Read more: http://www.politico.com/story/2013/10/senate-budget-default-debt-ceiling-government-shutdown-98333_Page2.html#ixzz2hpuB9D5T
   

   
    This might seem plausible on the face of it. However, this is not any run of the mill negotiation. For the Democrats to negotiate here is to negotiate with hostage takers. They are certainly right not to do so.
     
     "Nobody gets anything for threatening to default on the debt and threatening the economy,” Van Hollen said.

     Krugman got it right they other day:


      "Aha. Paul Ryan, the Serious, Honest Conservative (the media myth) — as opposed to Paul Ryan the unserious, dishonest partisan (always the reality) — made a brief reappearance over the past couple of days. Needless to say, his initiative was completely useless, and the debt talks were in breakdown."


    "What Ryan offered was billed as a compromise; I do not think that word means what they think it means. It involved reducing the harshness of the sequester — which Republicans and Democrats both want — in return for Medicare and/or Social Security cuts, which only Republicans want. Oh, and it only postponed the debt ceiling crisis, setting the stage for further extortion attempts."
      "So: you give me something, I give you nothing, and I don’t threaten your wife and kids until next week. Compromise!"
      "What I’m told is that the really crucial thing for the WH is a matter of principle: no deal unless the extortion ends. And Rs just can’t or won’t give up the idea that they deserve to be rewarded for not blowing up the world.."

     http://diaryofarepublicanhater.blogspot.com/2013/10/what-gop-position-amounts-to-next-well.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DiaryOfARepublicanHater+%28Diary+of+a+Republican+Hater%29

     The GOP still thinks they should get something for not blowing up the world. Not to put too fine a point on it but this really is blowing up the world. I mean the one constant over the last 5 years has been faith in Treasuries as nothing inspires confidence like the words The full faith and credit of the U.S. government. In one fell swoop Boehner and his friends are willing to compromise this because they want to save face? The economist Mark Zandi explains:

      "The point is that with each passing day the debt limit is not increased the more damage it will do to our economy. If lawmakers don’t raise the debt limit by November 1, the economy will fall back into recession. If they can't raise it by the end of November, we will be dooming our economy and the entire global economy to a wrenching economic downturn with implications for years if not decades to come."

     http://www.motherjones.com/mojo/2013/10/zandi-default-debt-ceiling-doom-economy

      Part of the trouble is that you have ignorant conservatives like Sarah Palin-who Zandi worked for during her 2008 campaign!-who honestly seem not to have a clue what a debt default would mean. 

       Meanwhile, after the failure of Boehner's first plan detailed above, he had a second plan he was going to put to a vote. However, this has now been cancelled as he clearly lacks the votes-the Heritage Foundation and other Tea Party groups has panned it. 

       http://talkingpointsmemo.com/dc/house-gop-finalizes-new-plan-to-avert-default

       The presumption is that the Senate will get back to it tomorrow as it's clear the House has nothing. However, time is of the essence-there is only 30 hours. 

       "So on the House side, things appear completely dead in the water. On the Senate side, Mitch McConnell and Harry Reid have been pretty quiet today, waiting to see what the House would do. The presumption is if the House GOP stalemates with itself, then things kick back to the Senate. But without a House bill, we start running into procedural hurdles that make it difficult for the Senate to get anything to the House before Thursday. Stay tuned."

      http://talkingpointsmemo.com/edblog/here-s-the-latest

      We've seen in the past the good of predictions but I will predict that this scenario still looks likely to me:

      "At the GOP leadership presser today, at which leaders introduced their latest plan, John Boehner notably did not rule out a House vote on the emerging Senate compromise. So one possible endgame here could be that Boehner might make one last, heroic stand for the Tea Party, perhaps passing the new House bill, which will promptly be rejected by the Senate. Then, having shown a willingness to take us right up to the brink of catastrophe, Boehner might then cave to the inevitable need to let something reopening the government and lifting the debt limit pass (the Senate compromise, or a version of it that includes a face-saver for Republicans) with a lot of Democratic votes, making the Tea Partiers very, very, very angry, and suffering the consequences."

      http://www.washingtonpost.com/blogs/plum-line/wp/2013/10/15/dems-to-house-gop-the-answer-is-no/

      I mean this has been the obvious way forward all along-the House will pass nothing, it never passes anything. The Senate will pass something, the Tea Party caucus in the House will hate it but Boehner will put it up for a vote and it will, of course, pass. One point that I think has some validity, however, is what Jonathan Bernstein has argued: it's not really about Boehner, but how many more mainstream conservatives in the House-he estimates about 180 of these allows him to bring it up-though they themselves won't vote for it?

    So is the House Republican file really going to let this happen? I still don't think so. Of course, the more time this goes on the worse it gets as Zandi points out. Still I think we come back from the precipice. If we don't then we've already proven Summers wrong-I mean we're in banana republic territory then. 

    It's like the movie says: God help you if you're wrong. God help us all. Or something like that. 

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