Commentary Magazine


Topic: debt ceiling

Mr. Boehner’s Critics

As explained by both Jonathan and our former COMMENTARY colleague Jennifer Rubin, Speaker John Boehner, for entirely understandable reasons–he held no cards–declared he would allow a vote on raising the debt ceiling with no strings attached. (It passed 221-201.)  Predictably, some conservative groups blasted Mr. Boehner for capitulation and for being unprincipled. 

“Leadership needs to go – they need to be completely changed,” Amy Kremer, chairman of the Tea Party Express, said. “They have no spine to fight for anything.” She added that her group would focus on making sure GOP leaders are defeated in the 2014 elections, and she’s not alone. The Senate Conservatives Fund is demanding he be replaced. So are other groups.

So some of the same people who recommended the GOP embrace the strategy that produced the government shutdown were insisting that House Republicans should have forced a showdown on raising the debt ceiling. One political disaster in a half year apparently isn’t enough. Why not two?

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As explained by both Jonathan and our former COMMENTARY colleague Jennifer Rubin, Speaker John Boehner, for entirely understandable reasons–he held no cards–declared he would allow a vote on raising the debt ceiling with no strings attached. (It passed 221-201.)  Predictably, some conservative groups blasted Mr. Boehner for capitulation and for being unprincipled. 

“Leadership needs to go – they need to be completely changed,” Amy Kremer, chairman of the Tea Party Express, said. “They have no spine to fight for anything.” She added that her group would focus on making sure GOP leaders are defeated in the 2014 elections, and she’s not alone. The Senate Conservatives Fund is demanding he be replaced. So are other groups.

So some of the same people who recommended the GOP embrace the strategy that produced the government shutdown were insisting that House Republicans should have forced a showdown on raising the debt ceiling. One political disaster in a half year apparently isn’t enough. Why not two?

It is a curious thing, those who insist on fighting losing battles, on large stages, based on wholly unrealistic expectations of what can be achieved. For some politicians seeking to curry favor with some part of the GOP base, the motivations may be ambition and self-interest. But there are others who seem to believe going down in flames is a high calling and a purifying ritual. Every tactical difference is framed as an apocalyptic struggle. The choice is liberty or tyranny. You’re a “constitutional conservative” or a statist. It’s the American Revolution all over again. You, too, can be Patrick Henry.

Now John Boehner is hardly an inspiring, let alone a perfect, political figure. He hardly sets conservative hearts aflutter. If there are those on the right who think another person should be speaker of the House, fine; they’re free to make their case and coalesce behind a challenger. But this should be said as well: Mr. Boehner’s job is more challenging than fulminating from deep in the bowels of a hidden bunker for three hours every weeknight. And whatever his limitations, Mr. Boehner has the virtue of being a serious adult who isn’t intemperate, who’s not in a constant state of agitation, and who hasn’t lost touch with political reality. Which is more than can be said about some of his critics.

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Republicans Dodge Debt Ceiling Disaster

When House Speaker John Boehner told a shocked Republican caucus this morning that he would allow a vote on raising the debt ceiling with no strings attached, it was seen in some quarters as a defeat for the GOP. And, in many ways, it was. A clean debt-ceiling resolution gives President Obama exactly what he wants and signals that there will be no attempt in 2014 by either political party to rein in the deluge of federal spending that feeds a national debt that keeps going up with no limit in sight. It also demonstrates that Boehner has failed yet again to get even a majority of his Republican members, let alone of the entire House, to vote for a bill that would link an increase in the debt ceiling with even modest measures aimed at trimming spending. Boehner was not even capable of passing a bill tied to a popular measure such as reversing cuts in veteran benefits. Most of the GOP caucus seems only interested in another apocalyptic fight to drastically cut spending and refuses to vote for any of Boehner’s compromises, leaving him no choice but to let the debt ceiling go through without strings and relying on the votes of Democrats.

Boehner expressed grave disappointment over his inability to speak for his caucus or to lead them to support a sensible approach to the issue as well as the futility of his efforts to chip away at the debt. Those are troubling developments, both for the speaker and the GOP. But rather than mourning Boehner’s decision, Republicans should be celebrating. A partisan confrontation over the debt ceiling—even one in which Republicans tie support for the increase to sensible spending cuts or a popular measure aimed at helping veterans—would have turned into a repeat of last fall’s political melodrama that ended so badly for the GOP.

The fact that a majority of the House GOP was too stubborn to back the speaker’s efforts to use the debt ceiling in an attempt to push for less spending may have granted the president what he wanted. But Boehner’s waving of the white flag on the debt ceiling also denies the Democrats the only issue that might have helped them win the 2014 midterm elections: a repeat of the GOP’s disastrous government shutdown. Today’s outcome allows Republicans to spend the upcoming months concentrating their fire on the president’s failed policies and the ObamaCare fiasco that threatens to drown the Democrats in a sea of lost insurance coverage, lost jobs, and a stalled economy rather than in defending another suicidal stand that would accomplish nothing but to strengthen their liberal opponents.

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When House Speaker John Boehner told a shocked Republican caucus this morning that he would allow a vote on raising the debt ceiling with no strings attached, it was seen in some quarters as a defeat for the GOP. And, in many ways, it was. A clean debt-ceiling resolution gives President Obama exactly what he wants and signals that there will be no attempt in 2014 by either political party to rein in the deluge of federal spending that feeds a national debt that keeps going up with no limit in sight. It also demonstrates that Boehner has failed yet again to get even a majority of his Republican members, let alone of the entire House, to vote for a bill that would link an increase in the debt ceiling with even modest measures aimed at trimming spending. Boehner was not even capable of passing a bill tied to a popular measure such as reversing cuts in veteran benefits. Most of the GOP caucus seems only interested in another apocalyptic fight to drastically cut spending and refuses to vote for any of Boehner’s compromises, leaving him no choice but to let the debt ceiling go through without strings and relying on the votes of Democrats.

Boehner expressed grave disappointment over his inability to speak for his caucus or to lead them to support a sensible approach to the issue as well as the futility of his efforts to chip away at the debt. Those are troubling developments, both for the speaker and the GOP. But rather than mourning Boehner’s decision, Republicans should be celebrating. A partisan confrontation over the debt ceiling—even one in which Republicans tie support for the increase to sensible spending cuts or a popular measure aimed at helping veterans—would have turned into a repeat of last fall’s political melodrama that ended so badly for the GOP.

The fact that a majority of the House GOP was too stubborn to back the speaker’s efforts to use the debt ceiling in an attempt to push for less spending may have granted the president what he wanted. But Boehner’s waving of the white flag on the debt ceiling also denies the Democrats the only issue that might have helped them win the 2014 midterm elections: a repeat of the GOP’s disastrous government shutdown. Today’s outcome allows Republicans to spend the upcoming months concentrating their fire on the president’s failed policies and the ObamaCare fiasco that threatens to drown the Democrats in a sea of lost insurance coverage, lost jobs, and a stalled economy rather than in defending another suicidal stand that would accomplish nothing but to strengthen their liberal opponents.

Much as he did before to the shutdown fight, Boehner tried to enlist conservative House members in an approach to the debt ceiling rooted in Tea Party’s concern over more spending, but would have sought to conduct the fight from the high ground of a popular position. But any reluctance to pay for the debt and to allow it to continue to increase—no matter how reasonable the strings that would have been attached to a GOP plan—was a political loser. Americans don’t like debt or big government spending in principle, but they also know that any attempt to bring a halt to the spending binge in a partisan manner could do real damage to the country’s credit rating and ultimately the economy as a whole.

Just as they did during the shutdown battle, Democrats deserve a lot of the blame for the failure to act on the debt. Their refusal to negotiate in good faith on either ObamaCare or spending caused the shutdown as much as the kamikaze instincts of Tea Party Republicans. But shutting down the government, even over ObamaCare funding, was deeply unpopular. The same applies to debt ceiling negotiations in which Democrats have also refused to deal fairly or address the country’s long-term problems.

It may be unfair that the GOP is blamed more than the Democrats for shutdowns or debt fights, but that is irrelevant to a political reality in which liberal domination of the mainstream media creates a distorted playing field. If Republicans want to win elections, they have to stay away from situations in which the media can brand them as irrational extremists, which is exactly what happened with the shutdown. As bad as things look for Boehner and his dysfunctional crew today, avoiding a debt-ceiling showdown denies the president and his party another chance to portray Republicans as irresponsible obstructionists who can’t be trusted with the serious task of governing.

Letting Democrats pass the debt increase is a bitter pill for Boehner and the GOP to swallow. But by doing it, they have also set the stage for a 2014 campaign that can be fought on their terms rather than those of the Democrats. That gives them a good chance not only to win back control of the Senate but to gain House seats and set themselves up for a 2015 session in which the party can not only begin to reverse the damage Obama has done but also set the stage for a return to the White House in 2016. All that was made possible by Boehner’s surrender. Given the stakes involved, that’s the sort of exchange that conservatives should like.

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Will GOP Rescue Obama with Debt Fight?

Yesterday, Senate Minority Leader Mitch McConnell threw down the gauntlet again on the debt ceiling. Speaking to reporters in Washington, McConnell made it clear that Senate Republicans wouldn’t consider putting through a “clean” debt ceiling bill that would merely rubber stamp the latest installment of out-of-control government spending. The issue was specifically left out of the pragmatic deal cut between the two parties by Rep. Paul Ryan and Senator Patty Murray that eliminated the possibility of another government shutdown for two years. But are Republicans really sanguine about the prospect of another bruising fight about the debt ceiling as well as of the attendant dire and somewhat self-fulfilling prophecies about default and the collapse of the economy?

The budget agreement seemed to indicate that the GOP—or at least House Speaker John Boehner—had learned its lesson from the series of debilitating and largely self-destructive fights they’ve engage in over both the budget and the debt in the last two years, but McConnell’s comments seem to indicate that we may be in for another one sometime early in 2014. But given the beating Republicans have taken over previous attempts to exact concessions from Democrats in such situations, the White House may be hoping that McConnell makes good on his threat. While McConnell and other conservatives are right to believe extending the debt ceiling ought to be accompanied by some gesture from the government that indicates a move toward reform, they need to consider whether another skirmish of this sort will do more to harm their cause than help it.

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Yesterday, Senate Minority Leader Mitch McConnell threw down the gauntlet again on the debt ceiling. Speaking to reporters in Washington, McConnell made it clear that Senate Republicans wouldn’t consider putting through a “clean” debt ceiling bill that would merely rubber stamp the latest installment of out-of-control government spending. The issue was specifically left out of the pragmatic deal cut between the two parties by Rep. Paul Ryan and Senator Patty Murray that eliminated the possibility of another government shutdown for two years. But are Republicans really sanguine about the prospect of another bruising fight about the debt ceiling as well as of the attendant dire and somewhat self-fulfilling prophecies about default and the collapse of the economy?

The budget agreement seemed to indicate that the GOP—or at least House Speaker John Boehner—had learned its lesson from the series of debilitating and largely self-destructive fights they’ve engage in over both the budget and the debt in the last two years, but McConnell’s comments seem to indicate that we may be in for another one sometime early in 2014. But given the beating Republicans have taken over previous attempts to exact concessions from Democrats in such situations, the White House may be hoping that McConnell makes good on his threat. While McConnell and other conservatives are right to believe extending the debt ceiling ought to be accompanied by some gesture from the government that indicates a move toward reform, they need to consider whether another skirmish of this sort will do more to harm their cause than help it.

After a year in which a string of scandals and then a disastrous rollout of his signature health-care bill have caused President Obama’s approval ratings to collapse, the White House is looking for a way to change the subject from broken promises and dysfunctional websites.

Their strategy appears to be one in which the president finally makes good on the promises of his 2013 State-of the Union speech and pivots hard left. That’s part of the reason veteran liberal strategist John Podesta has been drafted to help shore up the team of presidential advisors. Obama’s recent speech attempting to make income inequality the fulcrum of the national political debate was largely unpersuasive ideological cant. That’s what the Democratic base wants to hear, but it’s not the sort of thing that will do much to help reelect vulnerable Democrats in red states and keep the Senate out of Republican hands. Nor will it divert the public or even the mainstream media from coverage of the ongoing fiasco that is ObamaCare. But if Republicans throw Obama a lifeline in the form of another debt ceiling crisis, they might provide him with just the opening he needs to both bury the ObamaCare story and to resurrect his favorite campaign theme about GOP extremists who are willing to sacrifice the nation in pursuit of partisan goals.

Such a characterization of Republican efforts to rein in government spending and taxes before agreeing to go on expanding the debt is patently unfair. Tea Party activists and some of their GOP congressional hostages, like McConnell, are in the right on this issue. Raising the debt ceiling isn’t merely paying the bills, it’s a gesture that enables more irresponsibility and has done just that every time it has been raised.

But it needs to be reiterated that with control of only one half of one third of the government, neither House Republicans nor the GOP minority in the Senate have the ability to force Obama and the Democrats to agree to any of the commonsense ideas they propose. Going to the brink over this is a political loser. It is a given that neither Speaker Boehner nor Senator McConnell is really willing to see the nation go over the fiscal cliff over this. Whether the dire predictions heard from liberals are false or not it can’t be denied that the uncertainty will hurt the economy and that Republicans will take the brunt of the blame. Doing so in an election year will only help Democrats reframe the issues in a way that could revive Obama’s increasingly dismal second term and give their party the boost they need to hold onto the Senate.

Conservatives and Tea Partiers will dismiss such warnings as cynical political gamesmanship and brand, as they’ve done every commonsense thing congressional Republicans have done in the past year (like ending the government shutdown or passing the Ryan compromise budget), as a sellout. But the same realism that pushed them to abandon suicidal tactics in the past shouldn’t be ignored now. If conservatives are serious about changing Washington, they are going to have to start by winning the 2014 midterms. A debt-ceiling crisis, like the shutdown, will be a gift to Democrats allowing them to evade questions about presidential misrule and the devastating impact ObamaCare is having on millions of Americans.

Its understandable that McConnell and other Republicans who face stiff primary challenges from the right this year don’t want to be called RINOs and thus are talking about going to the brink again. But if McConnell wants to win in November and move to the majority leader’s desk, he’s going to have to find a way to avoid a debt debacle.

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Cruz’s Lack of Surprise is Surprising

Senator Ted Cruz reacted to the collapse of the strategy that he had urged on the Republican Party with remarkable sangfroid today. While saying that he would not seek to block the agreement to end the shutdown, Cruz tacitly conceded that he had lost. But he predictably blamed it all on the weak willed “Washington establishment” that refused to listen to the voice of the people and trash ObamaCare and thereby preserved the “status quo.” There’s an element of truth to that as most politicians could use a little shaking up and where Cruz to limit it his activity to messing up the establishment’s hair on a regular basis rather than bullying his party into suicidal tactics, he would not deserve the opprobrium that is being launched in his direction today. But the key phrase he kept repeating today was that he was “not surprised.”

Oh really, senator?

Wasn’t it Cruz who told Republicans that if they only went along with him and passed a bill funding the government while eliminating money for ObamaCare, that the other side would blink? If he wasn’t surprised that this happened, that means, contrary to what he had been telling us for months, he knew very well that this was the only possible outcome for the shutdown. If he knew this would happen, why did he keep saying that the GOP would win if it held out? As such, instead of railing at the insincerity and corruption of the establishment, Tea Partiers and other conservatives who rightly wish to stop ObamaCare, should be asking some tough questions about Cruz’s cynicism.

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Senator Ted Cruz reacted to the collapse of the strategy that he had urged on the Republican Party with remarkable sangfroid today. While saying that he would not seek to block the agreement to end the shutdown, Cruz tacitly conceded that he had lost. But he predictably blamed it all on the weak willed “Washington establishment” that refused to listen to the voice of the people and trash ObamaCare and thereby preserved the “status quo.” There’s an element of truth to that as most politicians could use a little shaking up and where Cruz to limit it his activity to messing up the establishment’s hair on a regular basis rather than bullying his party into suicidal tactics, he would not deserve the opprobrium that is being launched in his direction today. But the key phrase he kept repeating today was that he was “not surprised.”

Oh really, senator?

Wasn’t it Cruz who told Republicans that if they only went along with him and passed a bill funding the government while eliminating money for ObamaCare, that the other side would blink? If he wasn’t surprised that this happened, that means, contrary to what he had been telling us for months, he knew very well that this was the only possible outcome for the shutdown. If he knew this would happen, why did he keep saying that the GOP would win if it held out? As such, instead of railing at the insincerity and corruption of the establishment, Tea Partiers and other conservatives who rightly wish to stop ObamaCare, should be asking some tough questions about Cruz’s cynicism.

Though Cruz appears to be positioning himself to blame members of his own party — the so-called “surrender caucus” — for the failure of this tactic, let’s have a moment of clarity before the recriminations formally begin.

The shutdown ploy didn’t fail because Republicans failed Ted Cruz, Mike Lee and the rest of the crew that pushed them down this path. The GOP did stick together as he urged them to do through 16 days of a government shutdown as their poll ratings plummeted and the nation grew increasingly uneasy at the spectacle of Washington dysfunction. It failed because, as more sensible conservatives had warned all along, it was a strategy without a path to victory. All the Democrats had to do was to hang tough and wait out the Republicans. Though it took longer than most observers thought it would, that’s what happened. Since even Cruz knows that the GOP can’t countenance anything that even smacks of a defaulting on the national debt, after “fighting the good fight,” House Speaker John Boehner and Senate Minority Leader Mitch McConnell had to throw in the towel.

The cause for which Cruz and other Tea Partiers labored here was a good one. ObamaCare is a disaster and should be stopped. And if the country hadn’t spent the last two weeks obsessing about the shutdown and the debt ceiling, maybe more of the mainstream media would have been forced to expend their resources covering the fiasco that was its rollout.

Nor are President Obama and the Democrats blameless here. Their refusal to negotiate with Boehner and the Republicans until the latter were forced to surrender almost unconditionally was irresponsible. So, too, were the administration’s efforts to exacerbate the effects of the shutdown.

But the bottom line is that Ted Cruz charted a course for his party that he knew all along would result in a catastrophic failure and never acknowledged that truth or sought to change course. For all of his self righteous anger at the establishment — much of which I would concede is at times entirely appropriate — what he has done is every bit as cynical as anything DC veterans have done.

While the Republican Party will recover from this debacle and live to fight another day on budget issues, entitlement reform, the debt and ObamaCare, it has been materially damaged by the strategy Cruz recklessly advocated. For that he should be held as accountable. For all of his virtues, and they are not inconsiderable, if the GOP is to eventually prevail on these issues in the future one thing is clear: it won’t happen under the leadership of Cruz or anyone like him.

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Can a Deadbeat America Stay on Top?

In the 19th century, individual deadbeats could go to prison and countries that defaulted on their debt could be invaded. To choose only two examples of many, Britain invaded Egypt in 1882 and the U.S. invaded Haiti in 1915 because those countries were not meeting their obligations to international debt-holders.

Today we take a far more relaxed view about owing money. The law makes bankruptcy relatively easy and painless for individuals and corporations–at least less painful than the prospect of debtors’ prison. There is no ethic of living within your means; instead we are now encouraged to run up debt, whether via a home mortgage or a credit card bill, and spend, spend, spend. This isn’t necessarily a bad thing—we don’t need to return to the Puritanical, anti-debt attitude of the 19th century. There is nothing wrong with a responsible amount of debt, whether for a family or a country.

But we are carrying our easy-going modern-day ethos a little too far when we run the risk of defaulting on the debt of the United States. Odds are we will see an 11th-hour reprieve from this calamity; at least the markets seem to think so, judging by the run-up of stocks in recent days. But, even if we avert the worst today, it is grossly irresponsible and harmful for lawmakers—meaning principally Tea Party hardliners in the House—to have allowed the deadline to come so close.

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In the 19th century, individual deadbeats could go to prison and countries that defaulted on their debt could be invaded. To choose only two examples of many, Britain invaded Egypt in 1882 and the U.S. invaded Haiti in 1915 because those countries were not meeting their obligations to international debt-holders.

Today we take a far more relaxed view about owing money. The law makes bankruptcy relatively easy and painless for individuals and corporations–at least less painful than the prospect of debtors’ prison. There is no ethic of living within your means; instead we are now encouraged to run up debt, whether via a home mortgage or a credit card bill, and spend, spend, spend. This isn’t necessarily a bad thing—we don’t need to return to the Puritanical, anti-debt attitude of the 19th century. There is nothing wrong with a responsible amount of debt, whether for a family or a country.

But we are carrying our easy-going modern-day ethos a little too far when we run the risk of defaulting on the debt of the United States. Odds are we will see an 11th-hour reprieve from this calamity; at least the markets seem to think so, judging by the run-up of stocks in recent days. But, even if we avert the worst today, it is grossly irresponsible and harmful for lawmakers—meaning principally Tea Party hardliners in the House—to have allowed the deadline to come so close.

Thankfully the U.S. armed forces are still strong enough—for the time being anyway—to prevent the Chinese military from showing up on our shores to collect the trillions we owe them. (But for how much longer? Given the increases in Chinese military spending and our own across-the-board cuts as a result of the mindless sequestration process, the trends are not favorable when it comes to the shifting balance of power in the Pacific.) But the U.S. cannot rely on military strength alone. Much of our economic strength is underpinned by the fact that the dollar is the favorite reserve currency in the world and by the fact that the U.S. is the favorite destination for foreign investment.

That strong financial position will not be sacrificed overnight. But it will gradually erode if we have too many more perils-of-Pauline flirtations with a sovereign debt default. Already China’s Xinhua news agency is using this occasion to call for the world to “de-Americanize.” Such calls are likely to fall on deaf ears—for now. But we cannot afford to make the world think there is any doubt about America’s ability and willingness to repay its debts. That is a fundamental obligation of government, which, if called into question, will erode our national standing and hence our national security. There is no excuse for the willingness of some lawmakers to drive us so close to the cliff’s edge.

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Is the Shutdown Caucus Happy Now?

Yesterday’s farcical failure of House Speaker John Boehner to get enough members of his own party to commit to supporting his compromise measure to reopen the government and extend the debt ceiling told us all we needed to know about just how dysfunctional the Republican caucus has become. As I noted yesterday, Boehner’s measure was an acceptance of reality. The GOP has lost the shutdown fight and the only thing that is yet to be determined is the terms of surrender. Boehner tried to give his party a slightly larger fig leaf than the Senate Republicans were able to coax out of Harry Reid. But conservative hardliners were having none of it. Even at this late date and with the debt-ceiling deadline hanging over them, they wouldn’t go along with Boehner forcing him to withdraw his proposal and leaving the field to a Senate bill. That will likely mean that in order to avoid even the theoretical danger of default, Boehner may have to simply let the Senate bill onto the House floor for a vote where it will pass on the strength of Democratic votes along with a minority of Republicans.

In other words, after weeks of suffering the opprobrium of the mainstream media as well as increasing the distrust felt by many Americans for their party, what exactly did the GOP accomplish via the shutdown tactic?

Did trying a government shutdown defund ObamaCare? No. Did it force President Obama to make a single tangible concession to Republicans or give way on something that would help them fight the battle against growing deficits and debt or the ObamaCare fiasco further down the line? No. Did it weaken and further divide the Republican Party? Yes.

That leaves us with one more question: Are those that egged Boehner on to force a shutdown fight happy with these results?

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Yesterday’s farcical failure of House Speaker John Boehner to get enough members of his own party to commit to supporting his compromise measure to reopen the government and extend the debt ceiling told us all we needed to know about just how dysfunctional the Republican caucus has become. As I noted yesterday, Boehner’s measure was an acceptance of reality. The GOP has lost the shutdown fight and the only thing that is yet to be determined is the terms of surrender. Boehner tried to give his party a slightly larger fig leaf than the Senate Republicans were able to coax out of Harry Reid. But conservative hardliners were having none of it. Even at this late date and with the debt-ceiling deadline hanging over them, they wouldn’t go along with Boehner forcing him to withdraw his proposal and leaving the field to a Senate bill. That will likely mean that in order to avoid even the theoretical danger of default, Boehner may have to simply let the Senate bill onto the House floor for a vote where it will pass on the strength of Democratic votes along with a minority of Republicans.

In other words, after weeks of suffering the opprobrium of the mainstream media as well as increasing the distrust felt by many Americans for their party, what exactly did the GOP accomplish via the shutdown tactic?

Did trying a government shutdown defund ObamaCare? No. Did it force President Obama to make a single tangible concession to Republicans or give way on something that would help them fight the battle against growing deficits and debt or the ObamaCare fiasco further down the line? No. Did it weaken and further divide the Republican Party? Yes.

That leaves us with one more question: Are those that egged Boehner on to force a shutdown fight happy with these results?

It still remains to be seen whether Senators Ted Cruz and Mike Lee will fall on their swords and try to delay or prevent the Senate bill re-opening the government from passing. It is also possible that Speaker Boehner may try one more last, likely futile, parliamentary trick to cook up a deal that will be marginally more favorable to conservative interests. But the odds are, by the end of the week, we’ll be talking about Congress having to clean up the rubble left behind by the brutal battle these two and their House Tea Party friends fomented.

It’s also likely that they will take no responsibility for this crushing defeat. If anything, we can expect that they will blame their failure to come up with a strategy that had a chance of success or even an endgame that would allow their party a dignified path of retreat, on more reasonable Republicans — wrongly called RINOs by some Tea Partiers — who looked on in horror as they goaded Boehner to take the GOP over the cliff. But let’s make it clear that what is happening now isn’t the fault of those who said all along that this wouldn’t work. It’s the responsibility of a faction that simply wasn’t thinking straight about the best way to advance their goals and wound up doing more damage to the conservative movement than the Democrats could have ever done without their help.

As bad as it looks now, having wasted the country’s time in this manner won’t mean the end of the Republican Party. Like any party that doesn’t control the White House, it will remain divided and prey to factional disputes. But it will survive to fight another day and, with luck, will still be in position to hold onto the House and maybe even challenge the Democrats for control of the Senate next year. Perhaps once the shutdown is over, the nation will turn its full attention to the debacle of the ObamaCare rollout, which is where it should have been all along.

But neither should we forget who were the architects of defeat this week. John Boehner may be the poor soul who will have to preside over the formal surrender to the Democrats who will rightly crow about how they stood up to the Tea Party and defended the president’s signature health care legislation. Cruz and Lee and all those House members who thought this was a good idea owe their party and the country a better explanation than the one we’re likely to hear. And if either ever seeks the leadership of the party in 2016, they should be called to account for what they’ve done.

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The GOP Chooses Surrender Over Suicide

After more than two weeks, it appears that a deal is in place to end the government shutdown and raise the debt ceiling. The bargain that has been agreed to in principle by the leaders of the Senate will kick the can down the round until early next year. It will end the current crisis before things get so messy that it will cease to be a political problem and become an economic one. But there isn’t much doubt about the fact that Republicans get virtually nothing out of it. After months of huffing and puffing about ObamaCare as well as the debt, the GOP is now in a position where it has to choose between spiraling the country into what could become an economic crisis or to concede that it was basically all for nothing.

At the moment it appears that House Speaker John Boehner will ask members of his caucus to vote for a House version of the deal that is so similar to that of the Senate that any distinction is purely theoretical. But some of the conservatives who goaded Boehner into setting off this showdown are saying they won’t wave the white flag and hand this victory to President Obama. Indeed, one of them said this to the New York Times about supporting the Senate plan:

“We’ve got a name for it in the House: it’s called the Senate surrender caucus,” said Representative Tim Huelskamp, Republican of Kansas. “Anybody who would vote for that in the House as Republican would virtually guarantee a primary challenger.”

Huelskamp is blowing smoke about a primary challenge for everyone who votes with Boehner but he’s right that what he and other Republicans are being asked to do today is to surrender. But the question for him is the same one that could have been posed every day throughout this debate. What’s the alternative? Having started a fight without a strategy to win it or an endgame that could allow them to opt out of it without looking servile, it’s a little late to complain about a surrender caucus when the only other choice is a suicide caucus since allowing the debt ceiling to expire or to continue the shutdown indefinitely is not only bad politics but a blueprint for, as our John Steele Gordon pointed out yesterday, another recession or worse.

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After more than two weeks, it appears that a deal is in place to end the government shutdown and raise the debt ceiling. The bargain that has been agreed to in principle by the leaders of the Senate will kick the can down the round until early next year. It will end the current crisis before things get so messy that it will cease to be a political problem and become an economic one. But there isn’t much doubt about the fact that Republicans get virtually nothing out of it. After months of huffing and puffing about ObamaCare as well as the debt, the GOP is now in a position where it has to choose between spiraling the country into what could become an economic crisis or to concede that it was basically all for nothing.

At the moment it appears that House Speaker John Boehner will ask members of his caucus to vote for a House version of the deal that is so similar to that of the Senate that any distinction is purely theoretical. But some of the conservatives who goaded Boehner into setting off this showdown are saying they won’t wave the white flag and hand this victory to President Obama. Indeed, one of them said this to the New York Times about supporting the Senate plan:

“We’ve got a name for it in the House: it’s called the Senate surrender caucus,” said Representative Tim Huelskamp, Republican of Kansas. “Anybody who would vote for that in the House as Republican would virtually guarantee a primary challenger.”

Huelskamp is blowing smoke about a primary challenge for everyone who votes with Boehner but he’s right that what he and other Republicans are being asked to do today is to surrender. But the question for him is the same one that could have been posed every day throughout this debate. What’s the alternative? Having started a fight without a strategy to win it or an endgame that could allow them to opt out of it without looking servile, it’s a little late to complain about a surrender caucus when the only other choice is a suicide caucus since allowing the debt ceiling to expire or to continue the shutdown indefinitely is not only bad politics but a blueprint for, as our John Steele Gordon pointed out yesterday, another recession or worse.

At this point, the problem is no longer about who is to blame for this.

Yes, as I have noted many times, blaming it all on the Tea Party doesn’t tell us much about how it happened. President Obama and the Democrats are being just as ideological as the GOP when they say they will not accept the defunding of ObamaCare. It’s also true that the president has been hoping for a shutdown since 2011 because he thought it would damage Republicans. His refusal to negotiate made the standoff happen and his party is also suffering a decline in public approval as a result of it.

But let’s also not deceive ourselves about which side gave Obama what he wanted. Conservatives like Ted Cruz and Mike Lee pushed for a showdown because they assured us that if Republicans hung tough, the president would blink. Much to the dismay of many more sober conservatives, Speaker Boehner went along with them and the GOP did wind up hanging as tough as the Tea Partiers had demanded. But as just about everybody who didn’t drink Cruz’s Kool-Aid predicted, the Democrats also stood their ground. With control of the Senate and the White House, the Democrats have a clear advantage over the Republicans and used it. If Boehner is now looking for the exit sign from the dead end that his party’s hardliners backed him into, it is because there really isn’t a choice.

No doubt conservatives will try and cling to some of the fig leaves left the in the Senate and House versions of the deal and say they accomplished something. But this will be as disingenuous as the Democrats’ claim to be the adults in the room. This is a Republican defeat pure and simple and there’s no way to sugarcoat it. And they’re accepting it because the alternative is to do the country material damage and to dig an even deeper political hole than the one they’ve already dug for themselves.

If there is anything to be retrieved from the rubble of the shutdown for Republicans it is the hope that the budget conference that is part of the deal might enable Rep. Paul Ryan — the voice of principle and sanity in the GOP caucus — to move the discussion from the simplistic demands of Cruz and Lee to a more productive debate about entitlement reform and debt that will strengthen the party’s position.

But that’s a discussion for another day. The real story now is about a GOP decision between surrender and suicide and their inevitable vote in favor of the former. It’s a bitter day for Boehner but the ones who should really be eating crow are Cruz, Lee and all those who backed him into this foolish gambit.

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The Wages of Default

There has been much wringing of hands and gnashing of teeth over the prospect that the United States Government might actually default if Congress and the President can’t agree to raise the debt ceiling by Thursday, when, according to Treasury Secretary Jack Lew, the Treasury will be empty.

Of course, the Treasury receives on average about $14 billion a business day in receipts. That vastly exceeds the daily interest costs on the debt.  Old debt can be simply rolled over without increasing the total debt. But apparently the Treasury’s system of paying the bills is mostly on autopilot and there is no prioritizing. So interest on the debt and paying a contractor for roadwork stand in the same line. Still, I find it impossible to believe that emergency action cannot be taken to see that default does not occur. If such action doesn’t comport with every jot and tittle of the law, so what?  As Justice Robert H. Jackson wrote in 1949, in the common paraphrase of the actual quote, “the Constitution is not a suicide pact.”

And while a contractor being paid late would be, at the least, an embarrassment, a real default would be, if not financial suicide, a body blow to the American—and thus the world—economy. Something like a quarter of GDP flows through the federal government in the course of a year. Stopping that flow, or even curtailing it, would be about as disruptive to the economy as anything short of nuclear war could be. Millions of families depend on Social Security and other federal payments. They would stop. Consumption would thus decline markedly and that would ripple through the economy throwing us back into recession. The world would follow along in short order.

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There has been much wringing of hands and gnashing of teeth over the prospect that the United States Government might actually default if Congress and the President can’t agree to raise the debt ceiling by Thursday, when, according to Treasury Secretary Jack Lew, the Treasury will be empty.

Of course, the Treasury receives on average about $14 billion a business day in receipts. That vastly exceeds the daily interest costs on the debt.  Old debt can be simply rolled over without increasing the total debt. But apparently the Treasury’s system of paying the bills is mostly on autopilot and there is no prioritizing. So interest on the debt and paying a contractor for roadwork stand in the same line. Still, I find it impossible to believe that emergency action cannot be taken to see that default does not occur. If such action doesn’t comport with every jot and tittle of the law, so what?  As Justice Robert H. Jackson wrote in 1949, in the common paraphrase of the actual quote, “the Constitution is not a suicide pact.”

And while a contractor being paid late would be, at the least, an embarrassment, a real default would be, if not financial suicide, a body blow to the American—and thus the world—economy. Something like a quarter of GDP flows through the federal government in the course of a year. Stopping that flow, or even curtailing it, would be about as disruptive to the economy as anything short of nuclear war could be. Millions of families depend on Social Security and other federal payments. They would stop. Consumption would thus decline markedly and that would ripple through the economy throwing us back into recession. The world would follow along in short order.

(It has been argued that Social Security could continue because the Social Security Trust Fund has many billions in federal bonds that it could sell to keep the checks flowing. Unfortunately, they are special Treasury bonds and are not negotiable. They can only be sold back to the Treasury at par. In this situation the Treasury would have no money and would be unable to raise money in the bond market.)

And the blow to American prestige would be immense.  The cost of future borrowing would increase, as the risk of a new default—long thought non-existent—would now be priced in.

It has been widely said, including by President Obama that the United States has never defaulted on either the principal or interest of its debt. That’s not so.

The United States was in default in the 1780’s, after the Revolutionary War and Britain’s closing of West Indian ports to American ships threw the country into deep depression. It was that financial crisis that led to the present Constitution.

Then in November of 1814, with Washington, D.C., in ruins and with American soldiers going unpaid, the Treasury defaulted on some bonds. The default was temporary and quickly forgotten as the war ended soon afterwards.

In 1979, another dust up over the debt ceiling caused the Treasury to be late, for up to a week, on redeeming $122 million in Treasury bills. The Treasury blamed it on new word-processing software and called it a “delay,” but the market called it a default and the interest rate on T-bills rose 0.6 percentage points and stayed up. A study in 1989 calculated that that cost us $12 billion.

But I suspect that the best guarantee against a default this time around is the certainty that any default would result in a firestorm of anger on the part of the American population. A recent poll showed that the people are in a throw-the-bums-out mood, with 60 percent of the people agreeing that everyone in Washington, including their own representatives, should be kicked out of office. If the country defaults that will go to over 90 percent and a lot of bums will be thrown out come next November.

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The Democratic Moment Won’t Last

With days to go before the artificial deadline set for the national debt ceiling to expire, there’s little doubt that Democrats believe the political pendulum has swung in their direction. Polls show them to be the beneficiaries of the disgust felt over the government shutdown and the general dysfunction evident in Washington. But they are just as encouraged by what they not reasonably conclude is division in the ranks of their foes. Republicans still seem split between those who are working to find a way out of the dead end that advocates of the shutdown have steered them into and those who are still insisting that what is needed is more determination to stick to their principles on the debt and ObamaCare while waiting for the Democrats to blink even if it is more likely that hell will freeze over first. President Obama spent the last two years daring the Republicans to shut down the government in the hope that it would be a political disaster for the GOP. Now that he seems to have been proven right, Democrats believe a moment has arrived in which they may not only rout the Tea Party but perhaps alter the dynamic of budget negotiations that have seemed to run against their big government beliefs for the past few years.

That’s what motivated Senator Harry Reid to refuse to accept what might have been considered a Republican surrender offer over the weekend. Rather than accept a so-called clean bill that would reopen the government and lift the current debt ceiling with no conditions as they had been calling for over the last month, Democrats raised the ante in the talks about finding a way out of the current impasse. Now they are demanding a relatively quick end to sequester budget cuts and are refusing even to accept a permanent repeal of the ObamaCare medical device tax, a face-saving measure that would allow the Republicans to act as if they had not been completely defeated.

Reid and the president are hoping Republicans are sufficiently spooked by the prospect of a default to surrender on those humiliating terms. But as strong as their position seems to be today, Democrats are still very much in danger of overplaying their hand. That’s not just because if the nation does slide into economic difficulties as a result of the expiration of the current debt ceiling and the shutdown the administration and its allies will be blamed along with the GOP. But by moving the discussion from what is perceived to be an unreasonable Republican demand to shut down the government if ObamaCare isn’t defunded to one about expanding debt and spending, Democrats are shifting the struggle back onto strong ground for their opponents.

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With days to go before the artificial deadline set for the national debt ceiling to expire, there’s little doubt that Democrats believe the political pendulum has swung in their direction. Polls show them to be the beneficiaries of the disgust felt over the government shutdown and the general dysfunction evident in Washington. But they are just as encouraged by what they not reasonably conclude is division in the ranks of their foes. Republicans still seem split between those who are working to find a way out of the dead end that advocates of the shutdown have steered them into and those who are still insisting that what is needed is more determination to stick to their principles on the debt and ObamaCare while waiting for the Democrats to blink even if it is more likely that hell will freeze over first. President Obama spent the last two years daring the Republicans to shut down the government in the hope that it would be a political disaster for the GOP. Now that he seems to have been proven right, Democrats believe a moment has arrived in which they may not only rout the Tea Party but perhaps alter the dynamic of budget negotiations that have seemed to run against their big government beliefs for the past few years.

That’s what motivated Senator Harry Reid to refuse to accept what might have been considered a Republican surrender offer over the weekend. Rather than accept a so-called clean bill that would reopen the government and lift the current debt ceiling with no conditions as they had been calling for over the last month, Democrats raised the ante in the talks about finding a way out of the current impasse. Now they are demanding a relatively quick end to sequester budget cuts and are refusing even to accept a permanent repeal of the ObamaCare medical device tax, a face-saving measure that would allow the Republicans to act as if they had not been completely defeated.

Reid and the president are hoping Republicans are sufficiently spooked by the prospect of a default to surrender on those humiliating terms. But as strong as their position seems to be today, Democrats are still very much in danger of overplaying their hand. That’s not just because if the nation does slide into economic difficulties as a result of the expiration of the current debt ceiling and the shutdown the administration and its allies will be blamed along with the GOP. But by moving the discussion from what is perceived to be an unreasonable Republican demand to shut down the government if ObamaCare isn’t defunded to one about expanding debt and spending, Democrats are shifting the struggle back onto strong ground for their opponents.

The Republican stand on funding the government is widely seen as being driven by an ideological position on ObamaCare even if the other side is no less ideological in their insistence on preserving the president’s signature health care legislation despite its disastrous rollout and the deleterious impact it will have on the economy. That places them at a real disadvantage so long as the question is finding a way to reopen the government and ensure that the government doesn’t default.

But once the discussion turns, as Reid’s attempt to do away with sequester cuts indicates, to whether Congress will allow the government to go back to the free spending ways that actually got the country into this mess, the Democratic advantage disappears. While the sequester is not the smartest way to cut government spending and has done some damage, especially to national defense, it is not unpopular because the American people have understandably come to the conclusion that it is only by such draconian means that the nation’s spending addiction can be brought under control.

Once we stop arguing about whether the government will continue to operate or whether the national debt will be paid, the question becomes one of whether Washington is capable of reforming the entitlement spending that is sinking the nation in a sea of red ink and reducing the size of government to one that can be paid without increasing the debt. And that is where the Republicans have not only the stronger argument but also the ability to rally a majority to their side.

The question for the Republican Party isn’t really so much whether Senator Ted Cruz and the Tea Party will cause it to crash and burn and loose the 2014 midterms, as it is whether it can keep the national discussion focused on taxes and spending. If, fueled by their belief that the GOP is a rudderless and sinking ship, Obama and Reid choose to try and roll back the sequester cuts and refloat the liberal agenda in the coming weeks and months, what they will be doing is actually reviving the Republicans rather than placing a stake in their hearts. The Democratic moment we are currently experiencing is real but that irresistible liberal temptation is an almost sure guarantee that it will pass.

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Another Dem “No” Could Be a Big Mistake

After weeks of heeding the calls to confrontation from their most hard-line members, the House Republican leadership has taken a step toward at least a partial settlement of the current fiscal standoff. The question is: can President Obama and the Democrats get off their high horse and accept this olive branch? Leading up to today’s meeting between the president and a group of Republicans, every indication is that the answer is no.

Democrats will argue that the Republican proposal, which would grant a six-week extension of the debt ceiling (with no spending cuts) while setting in place a process for resolving the other conflict over the budget that has led to a government shutdown, doesn’t satisfy the president’s demands. It leaves the government shutdown in place and obligates the president and his Democratic allies to negotiate with the GOP over both the budget and the debt. As such, they may well turn it down and demand either a one-year debt extension offered by Senate Democrats or simply hunker down and stick to their ultimatum requiring a complete Republican surrender on both the shutdown and the debt before the White House will deign to negotiate about anything else. Such a response would be consistent with the administration’s belief (backed up by opinion polls) that they are winning the shutdown and that all that is needed for the president to complete his triumph is just to stick to his position and wait for House Speaker John Boehner and his allies to give up.

But ten days into the shutdown, it’s time for the president to start re-evaluating his position. As much as the Democrats are getting less of the blame for the mess in Washington than the Republicans, the president’s 37 percent job approval rating should remind them that although the GOP is getting battered, nobody is winning in this fight. And if the president can’t find a way to accept the Republicans’ debt ceiling extension offer, then he may discover that the political fallout will start to even out.

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After weeks of heeding the calls to confrontation from their most hard-line members, the House Republican leadership has taken a step toward at least a partial settlement of the current fiscal standoff. The question is: can President Obama and the Democrats get off their high horse and accept this olive branch? Leading up to today’s meeting between the president and a group of Republicans, every indication is that the answer is no.

Democrats will argue that the Republican proposal, which would grant a six-week extension of the debt ceiling (with no spending cuts) while setting in place a process for resolving the other conflict over the budget that has led to a government shutdown, doesn’t satisfy the president’s demands. It leaves the government shutdown in place and obligates the president and his Democratic allies to negotiate with the GOP over both the budget and the debt. As such, they may well turn it down and demand either a one-year debt extension offered by Senate Democrats or simply hunker down and stick to their ultimatum requiring a complete Republican surrender on both the shutdown and the debt before the White House will deign to negotiate about anything else. Such a response would be consistent with the administration’s belief (backed up by opinion polls) that they are winning the shutdown and that all that is needed for the president to complete his triumph is just to stick to his position and wait for House Speaker John Boehner and his allies to give up.

But ten days into the shutdown, it’s time for the president to start re-evaluating his position. As much as the Democrats are getting less of the blame for the mess in Washington than the Republicans, the president’s 37 percent job approval rating should remind them that although the GOP is getting battered, nobody is winning in this fight. And if the president can’t find a way to accept the Republicans’ debt ceiling extension offer, then he may discover that the political fallout will start to even out.

Boehner’s strategy is fraught with danger for both parties. Though the House leadership appears willing to try and start finding a way out of the current impasse, many hard-line GOP conservatives are still reluctant to compromise and might actually vote against Boehner’s proposal if it came to a vote because there are no conditions attached to the debt limit extension. That would set up a theoretical situation in which the House leadership would be dependent on Democratic votes and therefore allow the president’s allies to scuttle the compromise and embarrass Boehner.

Just as troubling for Boehner is a scenario in which the president turns him down and forces him to get closer to the artificial debt deadline of next Wednesday. That would, as the president hopes, probably increase the pressure on the House to bend to the president’s demands.

But blindly sticking to his position of no negotiations until the House gives in on both the debt ceiling and the shutdown may be more dangerous for President Obama than he thinks.

So long as the public’s focus has been on Tea Party leaders like Senator Ted Cruz and their unrealistic (if justified) demands that ObamaCare be scrapped in exchange for a continuing resolution to fund the government, the White House wins. But once the spotlight shifts irrevocably to the affable Boehner and his compromise efforts, all the rhetoric emanating from the White House and Democratic leaders about hostage taking and extremism begins to sound a bit hysterical. It also makes the president’s refusal to negotiate sound that much more shrill and partisan.

Today’s compromise proposal may not be the beginning of the end of this battle. But it may be, to use one of Winston Churchill’s lines, the end of the beginning. At some point, the president is going to realize that not talking and demanding surrender are unattractive to most of the American public. As a second-term president with mounting problems at home and abroad, he’d be wise to find a way out of this mess before the turning point arrives and more Americans start blaming him, as they perhaps should have done all along.

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No Deal Yet? Blame Obama’s Credibility Gap

This morning House Republicans are meeting to discuss ideas floated by Rep. Paul Ryan to avert a showdown over the debt ceiling. Ryan, who outlined his proposal in yesterday’s Wall Street Journal is, as we have come to expect of him, the leading voice of reason in the GOP caucus, and the White House ought to seize on this opportunity to avert what it keeps telling us is a fiscal catastrophe that will happen on Oct. 17 if the Republicans don’t surrender. But since we already know that President Obama is far more interested in pushing confrontation with the Republicans because he believes it to be in his political interests, there’s little chance of that happening.

While more conservatives are coming to grips with the fact that they are not going to be able to defund ObamaCare, it’s also unclear whether enough House Republicans will get behind Ryan’s scheme that trades off a short-term extension of the debt ceiling along with reform of Medicare and a start on comprehensive tax reform. These are core conservative ideas that are focused on the underlying problems behind the deficit—entitlements and tax unfairness—that are opposed by Democrats who seek to preserve an indefensible status quo.

But if Ryan is having trouble rallying his party behind his proposal it is in no small measure due to the fact that a lot of Republicans just aren’t buying the hype about next week’s debt ceiling deadline. Nor is there any massive public groundswell of fear pushing them to give in as the president says they must. That is causing some in the liberal mainstream media to recycle their “debt denier” slur first trotted out last winter during the fiscal cliff showdown. But, as Politico noted in a feature published today, the reason why Republicans aren’t running scared is what the site aptly terms “Obama’s Chicken Little challenge.” After repeatedly falsely prophesying doom and destruction about the sequester and the government shutdown, the nation, let alone the GOP, just isn’t buying his debt ceiling warnings.

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This morning House Republicans are meeting to discuss ideas floated by Rep. Paul Ryan to avert a showdown over the debt ceiling. Ryan, who outlined his proposal in yesterday’s Wall Street Journal is, as we have come to expect of him, the leading voice of reason in the GOP caucus, and the White House ought to seize on this opportunity to avert what it keeps telling us is a fiscal catastrophe that will happen on Oct. 17 if the Republicans don’t surrender. But since we already know that President Obama is far more interested in pushing confrontation with the Republicans because he believes it to be in his political interests, there’s little chance of that happening.

While more conservatives are coming to grips with the fact that they are not going to be able to defund ObamaCare, it’s also unclear whether enough House Republicans will get behind Ryan’s scheme that trades off a short-term extension of the debt ceiling along with reform of Medicare and a start on comprehensive tax reform. These are core conservative ideas that are focused on the underlying problems behind the deficit—entitlements and tax unfairness—that are opposed by Democrats who seek to preserve an indefensible status quo.

But if Ryan is having trouble rallying his party behind his proposal it is in no small measure due to the fact that a lot of Republicans just aren’t buying the hype about next week’s debt ceiling deadline. Nor is there any massive public groundswell of fear pushing them to give in as the president says they must. That is causing some in the liberal mainstream media to recycle their “debt denier” slur first trotted out last winter during the fiscal cliff showdown. But, as Politico noted in a feature published today, the reason why Republicans aren’t running scared is what the site aptly terms “Obama’s Chicken Little challenge.” After repeatedly falsely prophesying doom and destruction about the sequester and the government shutdown, the nation, let alone the GOP, just isn’t buying his debt ceiling warnings.

To acknowledge the president’s credibility gap on fiscal issues is not to ignore the dire possibilities of a default on the national debt. Were that ever to happen, it really would be an economic catastrophe and no one, not even the most ardent advocates of going to the brink with the White House, is saying anything different. However, as Senator Pat Toomey calmly explained on MSNBC’s Morning Joe program yesterday, that isn’t what will happen if there is no deal by next Wednesday:

First of all, there is zero chance that the U.S. government is going to default on its debt. It’s unfortunate that people have conflated this idea of not raising the debt ceiling immediately on October 17 with somehow defaulting on our debt. We bring in tax revenue about 12 times as much money as it takes to pay our interest on our debt. There is no way that any Treasury secretary or administration would willfully choose to have the catastrophic results that would occur if we actually defaulted on our debt when it’s not necessary. So this is pretty well understood in financial circles. You see Treasury prices have barely moved through this entire episode. But I’ve got legislation that would simply codify and formalize the obligation to make sure that under no circumstances we would default on our debt. Interestingly, the White House doesn’t want that legislation. They’ve threatened to veto it precisely because they want to be able to hold the specter of a catastrophe in front of Republicans to cow us and intimidate us into giving the president what he wants, which is a whole lot of additional borrowing authority with no reforms whatsoever, and I think that’s irresponsible.

Toomey’s reality check debunks the administration’s latest “the sky is falling” routine. But even if we accept the notion that a failure to reach a deal on the debt would be problematic, there’s little chance that even those who agree that the government shutdown is more the GOP’s fault than the president’s are going to believe the Democrats’ warnings of imminent danger. After all, we were told the same thing about the sequester cuts only to discover that the republic could survive if government departments were forced to make across-the-board cuts. Nor have the predictions of disaster about the government shutdown that began last week proved true.

That is not to say that the sequester or the shutdown are positive developments. There is long-term damage being done by cuts, especially those to national defense. But the American public saw right through the stunts staged by the administration to illustrate the pain of the shutdown, like closing open-air national monuments. When the president says the country is in danger no one, not even most of his supporters, believe him anymore. They understand every word coming out of his mouth about the standoff with his Republican foes is political in nature and designed to force them to unconditionally surrender on their fiscal demands. Some may support that position, but few believe the doom and gloom predictions that underlie his “no negotiations” stand.

It is to be hoped that as the artificial debt deadline approaches, more Republicans will get behind Paul Ryan’s ideas and that enough Democrats will be willing to talk to avert more damage being done to the economy. But if we do go over the brink, the primary responsibility will belong to the Chicken Little in the Oval Office.

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Is Boehner’s Endgame a Debt Deal?

It’s day two of the government shutdown and, contrary to the expectations of optimists on both sides of the political divide, neither House Speaker John Boehner nor President Obama appears to be blinking. But no one should be under the impression that the two are fighting this battle on an equal footing.

The president has a united Democratic Party behind him with the overwhelming majority of the mainstream media cheering him on from the sidelines and portraying his foes as either clowns or terrorists holding the nation hostage. Boehner can’t even count on all of the Republicans in the House, let alone a Senate minority caucus, most of which never wanted any part of this circus. And with complaints about the hardships being caused by the shutdown—whether it is to cancer patients or national intelligence—rising Democrats see no reason why they should allow House Republicans to alleviate some suffering in the bills they are attempting to pass today. Despite the president’s invitation to congressional leaders to come the White House later today, we’ve been told he won’t negotiate.

Since the president is not only not negotiating but also acting as if nothing short of unconditional surrender by the GOP will satisfy him, it’s little wonder that a lot of the smart money has been on Boehner folding sometime in the next couple of days. That possibility can’t be discounted, but even with some of his caucus wavering, the desire of many Republicans to dig in their heels and wait for the debt-ceiling deadline to approach may enable Boehner to hold on for longer than many thought possible.

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It’s day two of the government shutdown and, contrary to the expectations of optimists on both sides of the political divide, neither House Speaker John Boehner nor President Obama appears to be blinking. But no one should be under the impression that the two are fighting this battle on an equal footing.

The president has a united Democratic Party behind him with the overwhelming majority of the mainstream media cheering him on from the sidelines and portraying his foes as either clowns or terrorists holding the nation hostage. Boehner can’t even count on all of the Republicans in the House, let alone a Senate minority caucus, most of which never wanted any part of this circus. And with complaints about the hardships being caused by the shutdown—whether it is to cancer patients or national intelligence—rising Democrats see no reason why they should allow House Republicans to alleviate some suffering in the bills they are attempting to pass today. Despite the president’s invitation to congressional leaders to come the White House later today, we’ve been told he won’t negotiate.

Since the president is not only not negotiating but also acting as if nothing short of unconditional surrender by the GOP will satisfy him, it’s little wonder that a lot of the smart money has been on Boehner folding sometime in the next couple of days. That possibility can’t be discounted, but even with some of his caucus wavering, the desire of many Republicans to dig in their heels and wait for the debt-ceiling deadline to approach may enable Boehner to hold on for longer than many thought possible.

Keeping this standoff going until Congress must raise the debt ceiling is potentially an even more dangerous strategy for Republicans than their original idea to tie continuation of government funding to a demand to ditch or delay ObamaCare. As the days go by, the government shutdown is—despite the histrionic attempts by the administration to hype the impact—appearing as more of an inconvenience than a catastrophe, let alone a tragedy. But going to the brink on paying the national debt is the sort of thing that can create genuine economic problems that can’t be paid for by stunts like the Republican National Committee’s attempt to pay for keeping the World War II Memorial open. Should Republicans wind up getting the blame for a default as well as a shutdown, the blowback will be considerable and perhaps even felt by red-state stalwarts who theoretically have nothing to fear from the electorate.

It’s worth restating that the strategy of trying to stop ObamaCare by refusing to fund the government was a colossal error by the Republicans. Speaker Boehner and many GOP members of the House and the Senate didn’t want to do it but were dragged into it by a faction of their caucus determined to plunge the party off the cliff on the issue. The shutdown has transformed the president from the weakling who got pushed around by Bashar Assad and Vladimir Putin into the tough guy that won’t back down from the GOP. But it’s possible that Boehner has gotten in so deep he can’t find a rationale that will enable him to escape this dilemma. Having arrived at this point, a precipitate retreat now might hurt his ability to hang on as speaker as much as ignoring the Tea Party prior to this week might have done.

So while it’s difficult to imagine what Boehner’s endgame can possibly be, the approach of a new, far more urgent deadline might give him a glimmer of hope. It is possible that even though Obama’s position has never been stronger or the president more confident of victory, Boehner may think he can trade the end of the shutdown for a debt deal that he can sell to his party as at least a partial victory. If so, even though the GOP position seems hopeless and about to get even worse, holding out for another few days or even a couple of weeks might cause the president to start sweating. And once that happens, a deal over some elements of the budget or some of the secondary issues with ObamaCare, such as elimination of the congressional exemptions or the medical device tax or something that won’t look like Robert E. Lee at Appomattox, is theoretically possible.

If that doesn’t sound to you like a coherent plan or viable political strategy, you’re right, it isn’t. But it’s all John Boehner has right now, and barring a massive defection of GOP members in the next 24 hours, it may be what Republicans are waiting for.

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Next Recession Belongs to Obama, Not GOP

Democrats spent the 2012 presidential campaign successfully blaming George W. Bush for the country’s sluggish economy. But a week after President Obama’s second inaugural, they are still not taking responsibility for the country’s fiscal health. The White House responded to yesterday’s disturbing news that GDP declined for the first time since 2009 in predictable fashion: they blamed the bad numbers on Republicans. White House spokesman Jay Carney said the dip was the fault of “Congressional Republicans” who have tried to restrain the government’s out-of-control spending. Even though the president got his way in the fiscal cliff negotiations with the GOP, Carney said the threat of sequestration, which would mandate across-the-board spending cuts, is the real culprit for the downturn and that the “brinksmanship” by the House Republicans was victimizing the nation’s economy.

This was thin gruel even from a practiced spin master like Carney. The idea of sequestration, which will have a particularly devastating effect on defense, originated in the White House and not the GOP caucus before it was put into the 2011 deal on the debt ceiling. But while we must give Carney credit for his usual chutzpah, the idea that Republican efforts to face up to chronic fiscal problems via entitlement reforms is to blame is a particularly depressing example of the ideological dead end into which the administration has driven the economy. As John Steele Gordon wrote yesterday, there is no way of knowing yet whether yesterday’s GDP numbers are the harbinger of an Obama recession or merely a statistical anomaly, but the steadfast refusal of the White House to face up to the long-term threats is what could be driving the economy into the ditch.

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Democrats spent the 2012 presidential campaign successfully blaming George W. Bush for the country’s sluggish economy. But a week after President Obama’s second inaugural, they are still not taking responsibility for the country’s fiscal health. The White House responded to yesterday’s disturbing news that GDP declined for the first time since 2009 in predictable fashion: they blamed the bad numbers on Republicans. White House spokesman Jay Carney said the dip was the fault of “Congressional Republicans” who have tried to restrain the government’s out-of-control spending. Even though the president got his way in the fiscal cliff negotiations with the GOP, Carney said the threat of sequestration, which would mandate across-the-board spending cuts, is the real culprit for the downturn and that the “brinksmanship” by the House Republicans was victimizing the nation’s economy.

This was thin gruel even from a practiced spin master like Carney. The idea of sequestration, which will have a particularly devastating effect on defense, originated in the White House and not the GOP caucus before it was put into the 2011 deal on the debt ceiling. But while we must give Carney credit for his usual chutzpah, the idea that Republican efforts to face up to chronic fiscal problems via entitlement reforms is to blame is a particularly depressing example of the ideological dead end into which the administration has driven the economy. As John Steele Gordon wrote yesterday, there is no way of knowing yet whether yesterday’s GDP numbers are the harbinger of an Obama recession or merely a statistical anomaly, but the steadfast refusal of the White House to face up to the long-term threats is what could be driving the economy into the ditch.

What Carney failed to mention is that every business in America is worrying about the implications of the president’s signature legislative achievement. ObamaCare is about to go into effect and the fear that it will drive up health-care costs in a way that could sink even substantial companies is already having a powerful impact on job growth and investment. Add in worries about the mounting federal debt and the government’s spending problems—which, contrary to the assertion of Senator Mary Landrieu, is a grim reality and not the invention of FOX News analysts—as well as Democratic threats to raise taxes and you have the makings of a perfect storm that could well create another Great Recession.

It is true that the uncertainty over the future that is fueled by the standoffs over the debt ceiling hasn’t helped the economy. The president has succeeded in fooling much of the public into believing this is solely the work of Republican obstruction, but now that the House GOP has punted on the debt ceiling, it is going to be difficult for Carney to keep pretending that it is House Speaker John Boehner and the Tea Party, rather than the man in the Oval Office, who has the principal responsibility for what is going on.

If the next growth report shows a negative number, President Obama will find himself presiding over his own recession. He may try to pin it on the GOP, but in his fifth year in the White House, that is a trick that even a master like Jay Carney will have trouble pulling off. The next recession, which may already be starting, is the work of an administration that is prepared to saddle the country with more debt in order to realize their liberal fantasies of expanded government, not the last-ditch efforts of generally powerless Republicans trying to stave off impending disaster.

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Rand Auditions for Role of Insurgent Leader

Senator Chuck Schumer earned some chuckles among Democrats when he said today that the decision by House Republicans to suspend any limits on the national debt for three months was evidence that “The president stared down the Republicans. They blinked.” The GOP chose to remove, at least for a time, any threat of a government shutdown because they knew they were locked in an unequal struggle with the White House and the Democratic majority in the Senate. By backing down on the debt ceiling deadline, the House leadership decided they’d be better off avoiding a confrontation that would lead to them being blamed for damaging the economy while probably not getting the spending cuts and entitlement reform that they rightly know the country needs. But there is at least one Republican in the Senate who thinks Schumer is right and who hopes to gain from making clear his disagreement.

Senator Rand Paul made it clear earlier this week that he disapproves of Speaker Boehner’s embrace of Fabian tactics. Instead of trying another Alamo-like last stand such as the GOP’s ill-fated fiscal cliff tactics, Boehner is hoping the GOP will be better off retreating now and living to fight another day. But Paul isn’t the only Republican unhappy about the decision. The 33 Republicans who defected during the House vote on the debt legislation made it obvious that a substantial portion of the party is unwilling to accept anything but a policy of all-out war all the time against the president’s refusal to deal with the debt crisis. Boehner has his hands full in a fractious caucus, but the impulse to rebel against a more cautious approach to their political problem is not limited to the House. Paul’s statement makes it clear that he is auditioning for the role of the party’s insurgent leader.

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Senator Chuck Schumer earned some chuckles among Democrats when he said today that the decision by House Republicans to suspend any limits on the national debt for three months was evidence that “The president stared down the Republicans. They blinked.” The GOP chose to remove, at least for a time, any threat of a government shutdown because they knew they were locked in an unequal struggle with the White House and the Democratic majority in the Senate. By backing down on the debt ceiling deadline, the House leadership decided they’d be better off avoiding a confrontation that would lead to them being blamed for damaging the economy while probably not getting the spending cuts and entitlement reform that they rightly know the country needs. But there is at least one Republican in the Senate who thinks Schumer is right and who hopes to gain from making clear his disagreement.

Senator Rand Paul made it clear earlier this week that he disapproves of Speaker Boehner’s embrace of Fabian tactics. Instead of trying another Alamo-like last stand such as the GOP’s ill-fated fiscal cliff tactics, Boehner is hoping the GOP will be better off retreating now and living to fight another day. But Paul isn’t the only Republican unhappy about the decision. The 33 Republicans who defected during the House vote on the debt legislation made it obvious that a substantial portion of the party is unwilling to accept anything but a policy of all-out war all the time against the president’s refusal to deal with the debt crisis. Boehner has his hands full in a fractious caucus, but the impulse to rebel against a more cautious approach to their political problem is not limited to the House. Paul’s statement makes it clear that he is auditioning for the role of the party’s insurgent leader.

Paul’s desire to run for president in 2016 is not exactly a secret. In addition to assuming a far more strident public role than in his first two years in the Senate, Paul even went to Israel this month in a not terribly persuasive effort to convince the pro-Israel community that he is evolving from an isolationist foreign policy worldview. But by criticizing Boehner in this manner, Paul is setting himself up as being far more than just another frustrated Tea Party critic of the party leadership.

In doing so, he is also picking a fight with the one Republican who is most identified with the cause of entitlement reform: Representative Paul Ryan. Democrats have spent the last two years demonizing Ryan for his visionary proposals challenging the status quo on Medicare. As the intellectual leader of the party, Ryan has been doing much of the heavy lifting for the party articulating the position that unless Washington changes the way it does business, that vital program as well as other government benefits won’t survive the coming fiscal meltdown. By backing Boehner’s compromise measure, Ryan is showing once again that he’s a team player who, though determined to promote reform ideas, isn’t interested in grandstanding or showing up Boehner or Majority Leader Eric Cantor.

Yet if Ryan is, as many of his admirers hope, interested in running for president in 2016, this leaves him vulnerable to future attacks from Paul as a compromiser rather than a true Tea Party believer.

Paul’s increasing visibility makes it look as if he intends to spend the next three years auditioning for the role of leader of a far bigger faction of the party than his extremist libertarian father Ron ever had at his back. But part of that will entail a program of guerrilla warfare against Republicans like Ryan who are just as interested in stopping Obama’s liberal program but aren’t willing to throw his party’s leadership under the bus to do it. Some in the GOP may still dismiss his chances in 2016 but bashing Boehner’s decision, taking a shot at New Jersey Governor Chris Christie, and being among the most strident critics of Hillary Clinton at the Senate Benghazi hearing today are the kind of things that will win him fans among the GOP base. Paul’s isolationist foreign policy views and loner mentality still mark him as an outlier in his party, as well as someone who might have trouble winning a general election. But his bid to be the party’s leading insurgent is laying the groundwork for what may be a formidable presidential bid.

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Republicans Avoid a Political Pickett’s Charge

Two-and-a-half weeks ago I wrote a post urging Republicans to back away from a confrontation with President Obama over raising the debt ceiling and warning them against engaging in high-profile confrontations and brinksmanship except on the most favorable terrain.

I was therefore quite relieved when Republicans announced that this week they will propose extending the federal debt limit by three months while also requiring that both the House and the Senate pass a budget for the next fiscal year. If either chamber failed to adopt a budget by April 15, that chamber’s members would then have their congressional pay withheld.

As the Wall Street Journal put it,

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Two-and-a-half weeks ago I wrote a post urging Republicans to back away from a confrontation with President Obama over raising the debt ceiling and warning them against engaging in high-profile confrontations and brinksmanship except on the most favorable terrain.

I was therefore quite relieved when Republicans announced that this week they will propose extending the federal debt limit by three months while also requiring that both the House and the Senate pass a budget for the next fiscal year. If either chamber failed to adopt a budget by April 15, that chamber’s members would then have their congressional pay withheld.

As the Wall Street Journal put it,

The move represents the clearest sign yet Republicans are backing away from using the debt ceiling as the battlefield for their next budget fight with President Barack Obama. It’s also evidence of what top GOP leaders have been hinting in recent weeks: that the recurring cycle of fiscal crises isn’t helping the party politically, failing to give them substantive victories while sticking them with political blame… the concession indicates that GOP leaders would prefer to wage a budget fight with the White House on different and less fraught grounds: the automatic spending cuts that take effect on March 1 and a government-funding measure that expires weeks later.

This is the triumph of prudence and common sense. Republicans decided that Pickett’s Charge should remain a Civil War reference, not a political blueprint for the GOP.

It’s dawning on Republicans that it’s impossible for them to govern from the House. Nor are they in any position to extract large concessions from the president. It simply isn’t worthwhile for Republicans in this context to press for deep spending cuts and entitlement reforms when no such things will be forthcoming. To have pushed for a high-stakes showdown on raising the debt ceiling would have had very damaging political consequences for Republicans. They would have emerged from the battle looking ideological and irresponsible one the one hand (for forcing the fight), and weak and unprincipled on the other (for caving in).

During this political season, Republicans need to demonstrate patience and care. They need to avoid the traps being laid for them by the president. And they need to offer proposals (like the one House Republicans have) that are measured and realistic, politically intelligent, defensible and difficult to caricature.

Remember: President Obama’s aim is to portray House Republicans as extreme to the point of being nihilistic. His hope is to go to the country in 2014 and blame the GOP for standing in the way of reasonable proposals and progress. Republicans, on the other hand, need to point out that the House has been the responsible chamber, passing budgets on time and annually, while the Senate (controlled by Democrats) is acting in a wildly irresponsible and lawless fashion (for example, not passing a budget in nearly four years).

There is an intense battle over narratives taking place–and Republicans, in pulling back from an intense, high-stakes, down-to-the-wire battle with Obama over raising the debt ceiling, have avoided a huge setback. 

This isn’t all they need to do, of course–but Do No Harm is not a bad starting point. 

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Time-Out May Be the GOP’s Best Option

The top news out of the House Republican retreat in Williamsburg, Virginia is that the party is considering a short-term extension of the debt limit in order to give the party more time to try and convince their Democratic antagonists to start cutting spending. The proposal, which according to the New York Times, is being floated by Rep. Paul Ryan, could wind up connecting the debt ceiling issue with the deadline for the implementation of sequestration that would mandate devastating across-the-board spending cuts. That would theoretically give the GOP some room to maneuver in order to avoid a confrontation with President Obama that few think they would win. But it is hard to avoid the impression that the main object of a delay would be to deal with the Republicans’ biggest problems: a lack of unity.

Like a sports team in disarray, the GOP needs a time out where they can catch their breath and somehow get on the same page with each other. As the votes over House Speaker John Boehner’s Plan B and then the final fiscal cliff deal revealed, the party is badly split between those who don’t want to give an inch on spending and taxes, those who think that compromise with the president is inevitable and those who believe the best the party can do is to speak out for its principles and oppose tactics that will blow up the economy and help demonize the party. But the problem for the Republican leadership is that even if they can buy themselves some more time to get their fractious caucus in line, the likelihood that a confident and aggressive President Obama will either accept a short-term extension or deal honestly with them on the issues.

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The top news out of the House Republican retreat in Williamsburg, Virginia is that the party is considering a short-term extension of the debt limit in order to give the party more time to try and convince their Democratic antagonists to start cutting spending. The proposal, which according to the New York Times, is being floated by Rep. Paul Ryan, could wind up connecting the debt ceiling issue with the deadline for the implementation of sequestration that would mandate devastating across-the-board spending cuts. That would theoretically give the GOP some room to maneuver in order to avoid a confrontation with President Obama that few think they would win. But it is hard to avoid the impression that the main object of a delay would be to deal with the Republicans’ biggest problems: a lack of unity.

Like a sports team in disarray, the GOP needs a time out where they can catch their breath and somehow get on the same page with each other. As the votes over House Speaker John Boehner’s Plan B and then the final fiscal cliff deal revealed, the party is badly split between those who don’t want to give an inch on spending and taxes, those who think that compromise with the president is inevitable and those who believe the best the party can do is to speak out for its principles and oppose tactics that will blow up the economy and help demonize the party. But the problem for the Republican leadership is that even if they can buy themselves some more time to get their fractious caucus in line, the likelihood that a confident and aggressive President Obama will either accept a short-term extension or deal honestly with them on the issues.

The argument for a time out is that in its current condition with a leadership that can’t count on its members to agree to back a unified strategy on fiscal issues, Republicans are doomed to defeat no matter what option they choose. The president is counting on the GOP splintering into warring factions and has done his best to help that process along by goading his opponents whenever possible including his stunning attack on them even as the two sides were negotiating a deal to prevent the nation from going over the fiscal cliff earlier this month.

As Robert Costa and Andrew Stiles noted in their sum up from the retreat, even though Republicans remain in control of the House, the tone of the gathering was that of a defeated party searching for answers. Given the shock felt by many in the party over the president’s re-election and the beatings they’ve received over the debt ceiling and the fiscal cliff, that’s understandable. But Bill Kristol’s advice to them to “suck it up,” is exactly what they need to hear.

I think those Republicans who want to make a stand on the debt ceiling are right. Even though the odds are against them prevailing in such a battle, the party can’t simply stand by and let President Obama off the hook without at least trying to stop him by whatever means are at their disposal. That sort of surrender would split the GOP and make it harder for them to recover at the next midterm.

But the one given in this equation is that without a united caucus, House Republicans haven’t a prayer of doing anything effective to halt the country’s drift toward insolvency and to head off new taxes.

For all of their pessimism, the GOP still controls the power of the purse. President Obama may have the wind at his back right now but his political capital is finite. So is his time. If conservatives can use the coming weeks to agree on a strategy to exploit his weaknesses — such as the division among Democrats and the president’s refusal to deal with entitlement reform — their position could be stronger than they think. The question is do Boehner, Eric Cantor or even Paul Ryan have the ability to convince their colleagues that if they don’t hang together, their hopes of stopping Obama from worsening the nation’s problems are nonexistent.

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Denier Label a Way to Avoid Debt Debate

The administration and its media allies are ramping up the pressure on Republicans determined not to vote for another hike in the debt ceiling without a meaningful agreement from the White House about entitlement reform and cutting spending. The president is refusing even to talk to the GOP about any deal in order to gain their assent for expanding the government’s ability to keep running up the debt and trying to paint them as insensitive misers who want sick children to suffer. In response, some conservatives have argued that the apocalyptic talk about the impact of a failure to reach an agreement about the debt ceiling is absurd hyperbole since what would follow would not be a default in any real sense. But now some of his allies in the media are going one step further by branding those who have said such an eventuality can be managed without the government failing to meet its obligations as “debt deniers.”

The term denier is a loaded one in contemporary political discourse. In common usage these days, deniers aren’t merely people who say something that others believe is not true. They are troglodyte reactionary haters who don’t accept the scientific community orthodoxy about global warming or, even worse, claim the Holocaust never happened or that 9/11 was an U.S. government or Israeli plot. Yet “Default Deniers” is the headline Politico placed on an article devoted to examining the views of people Like Pennsylvania Senator Pat Toomey or Utah Representative Jason Chaffetz. Conservatives were allowed to defend their thesis about the consequences of not raising the debt limit in the article even though the thrust of the piece was aimed at portraying Toomey, Chaffetz and those who agree with them as extremists determined to ruin the country for the sake of their ideology. But the use of this sort of language about their views is about an effort to avoid discussion about the merits of the arguments on this issue and to cast aspersions about the motives of those who oppose the president’s desire for a blank check to keep spending.

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The administration and its media allies are ramping up the pressure on Republicans determined not to vote for another hike in the debt ceiling without a meaningful agreement from the White House about entitlement reform and cutting spending. The president is refusing even to talk to the GOP about any deal in order to gain their assent for expanding the government’s ability to keep running up the debt and trying to paint them as insensitive misers who want sick children to suffer. In response, some conservatives have argued that the apocalyptic talk about the impact of a failure to reach an agreement about the debt ceiling is absurd hyperbole since what would follow would not be a default in any real sense. But now some of his allies in the media are going one step further by branding those who have said such an eventuality can be managed without the government failing to meet its obligations as “debt deniers.”

The term denier is a loaded one in contemporary political discourse. In common usage these days, deniers aren’t merely people who say something that others believe is not true. They are troglodyte reactionary haters who don’t accept the scientific community orthodoxy about global warming or, even worse, claim the Holocaust never happened or that 9/11 was an U.S. government or Israeli plot. Yet “Default Deniers” is the headline Politico placed on an article devoted to examining the views of people Like Pennsylvania Senator Pat Toomey or Utah Representative Jason Chaffetz. Conservatives were allowed to defend their thesis about the consequences of not raising the debt limit in the article even though the thrust of the piece was aimed at portraying Toomey, Chaffetz and those who agree with them as extremists determined to ruin the country for the sake of their ideology. But the use of this sort of language about their views is about an effort to avoid discussion about the merits of the arguments on this issue and to cast aspersions about the motives of those who oppose the president’s desire for a blank check to keep spending.

The views of those who see a halt to the routine raising of the debt ceiling are debatable. Their strongest argument is that even if it were not raised, the government would still have plenty of money to pay many off its bills but would have to prioritize which of its obligations would be satisfied first. That would mean debt payments and Social Security checks could still go out. Proposed legislation that would set those priorities would ensure that there would be no default even after the ceiling was reached.

However, critics are right to note that such a path would still upset the markets and the uncertainty might trigger a number of unforeseen circumstances that could adversely impact the economy. As even Toomey concedes, forcing the government to operate without an increased debt limit isn’t desirable. That’s why many conservatives worry that playing the debt ceiling card is a political error that can only hurt the GOP and help President Obama without doing the country much good.

Yet the attempt to brand those Republicans as extremists or to use the “denier” label on them is merely one more effort to avoid having a debate about government spending. Contrary to the president’s assertion that raising the ceiling is just a matter of Congress paying its bills, this is about an effort to end Washington’s practice of unchecked spending. Though it is politically perilous, it is the only method in sight to call the president to account for refusing to negotiate real spending cuts.

Rather than come down off his high horse and deal with the country’s chronic spending problems, the president has sought to demonize the other side in this discussion. But if you call your opponents deniers or even terrorists, as many liberals have labeled conservatives who want to stop the spending orgy do, you don’t have to talk with them or even discuss the issue. While the outcome of a default is uncertain and possibly dangerous, refusing to talk about the issue is a formula for fiscal catastrophe in the long run.

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Barack Obama, Negotiator

At his press conference yesterday:

The president demanded that the Republicans surrender their most powerful bargaining chip—the debt ceiling—first and then “I’m happy to have a conversation about deficit reduction.” Translation: Give me everything I want first and then we’ll talk.

He threatened that “If congressional Republicans refuse to pay America’s bills on time, Social Security checks, and veterans benefits will be delayed.” Translation: I’ll choose not to pay the bills that will cause maximum political blow-back and the mainstream media will see to it that the Republicans bear all the blame.

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At his press conference yesterday:

The president demanded that the Republicans surrender their most powerful bargaining chip—the debt ceiling—first and then “I’m happy to have a conversation about deficit reduction.” Translation: Give me everything I want first and then we’ll talk.

He threatened that “If congressional Republicans refuse to pay America’s bills on time, Social Security checks, and veterans benefits will be delayed.” Translation: I’ll choose not to pay the bills that will cause maximum political blow-back and the mainstream media will see to it that the Republicans bear all the blame.

He lied that “The last time Republicans in Congress even flirted with this idea, our AAA credit rating was downgraded for the first time in our history.” It was, of course, downgraded for the long-term outlook of the federal government’s finances, not for any delay in raising the debt ceiling.

He blamed “some House Republicans, [for insisting] that, ‘Nope, we gotta do it our way. And if we don’t, we simply won’t pay America’s bills.’” Translation: I get to refuse to negotiate, you don’t.

He slandered the party that controls one house of Congress: “But it seems as if what’s motivating and propelling at this point some of the House Republicans is more than simply deficit reduction. They have a particular vision about what government should and should not do, so they are suspicious about government’s commitments, for example, to make sure that seniors have decent health care as they get older. They have suspicions about Social Security. They have suspicions about whether government should make sure that kids in poverty are getting enough to eat or whether we should be spending money on medical research.” Translation: Republicans want children to starve, old ladies to freeze in their beds, and cancer to run rampant.

He implied that Republicans favor “corporate loopholes” in the tax code by saying that “it makes a lot more sense for us to close, for example, corporate loopholes before we go to putting a bigger burden on students or seniors.” Translation: My billionaire pals, such as Hollywood, “green energy” crony capitalists, and Chuck Schumer’s hedge fund tycoons paying only 15 percent on their nine-figure incomes, keep the loopholes I insisted on including in the fiscal cliff deal. The brain-dead Washington press corps will never call me a hypocrite.

I have only one question. Where did President Obama learn the art of negotiation? Ramallah?

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When Obama Voted Not to Pay the Bills

President Obama used the last press conference of his first term today to continue attacking Republicans for even thinking about using the debt ceiling as leverage to force him to accept spending cuts. Over and over again, the president said he wouldn’t discuss whether the debt ceiling would be raised since it was simply a matter of Congress having to pay the country’s bills. Assuming the tone of a parent trying to instruct an unruly child in proper conduct, he likened it to going out to dinner and then deciding not to pay the bill, and declared it to be an unprecedented act of irresponsibility. But at least one member of the White House press corps wasn’t willing to let him get away with this line.

CBS News’s Major Garrett had the chutzpah to ask how the president’s denunciations of Republican threats not to raise the debt ceiling squared with his own votes while a U.S. senator. Senator Barack Obama voted several times not to raise the debt ceiling as part of a Democratic protest against the profligate spending of the George W. Bush administration. Yet when he was called out for this apparent contradiction, the president refused to be deterred. He simply ignored the point of the question, making it apparent that he was not going to let the facts interfere with his talking points. But the discrepancy between his record and the high-handed manner with which the president has continually sought to tar Republicans as extremists goes straight to the heart of the debate on the issue.

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President Obama used the last press conference of his first term today to continue attacking Republicans for even thinking about using the debt ceiling as leverage to force him to accept spending cuts. Over and over again, the president said he wouldn’t discuss whether the debt ceiling would be raised since it was simply a matter of Congress having to pay the country’s bills. Assuming the tone of a parent trying to instruct an unruly child in proper conduct, he likened it to going out to dinner and then deciding not to pay the bill, and declared it to be an unprecedented act of irresponsibility. But at least one member of the White House press corps wasn’t willing to let him get away with this line.

CBS News’s Major Garrett had the chutzpah to ask how the president’s denunciations of Republican threats not to raise the debt ceiling squared with his own votes while a U.S. senator. Senator Barack Obama voted several times not to raise the debt ceiling as part of a Democratic protest against the profligate spending of the George W. Bush administration. Yet when he was called out for this apparent contradiction, the president refused to be deterred. He simply ignored the point of the question, making it apparent that he was not going to let the facts interfere with his talking points. But the discrepancy between his record and the high-handed manner with which the president has continually sought to tar Republicans as extremists goes straight to the heart of the debate on the issue.

Far from this being just a case of Republicans not being willing to pay the bills for the expenses they have already incurred, what is really at stake here is a willingness to go on giving the government carte blanche to run up the debt without any real accountability. To use the president’s analogy, what is happening here is not a restaurant customer not paying his tab so much as it is one who demands that his credit card company raise his credit limit every month so he can go on paying for items that he couldn’t really afford. Contrary to the president’s assertion, raising the limit is very much related to new spending since it would be impossible without it. While another debt ceiling crisis and more uncertainty could hurt the economy, the president needs to own up to his own responsibility for the creation of this mess. The country will continue to sink under the weight of our growing debt until something is done about it. If Republicans have seized upon the debt ceiling it is only because there is no alternative that has been left available to them.

Only a few years ago when George W. Bush was president, Democrats took the tactical decision to use the vote on the debt ceiling to highlight what they thought was a government that had lost control of the budget. Though their suggestions for how to curb that spending were non-starters, they weren’t wrong about the need to focus on the subject. What President Obama seems to be saying now is that it was okay for Democrats to do that to Republicans but that it is unconscionable to try and turn the tables.

The entire focus of the president’s comments about the budget had one aim only: demonizing his Republican critics in the hope that public opinion would punish the GOP for using the debt ceiling vote to pressure the White House to negotiate on spending. Rather than talk with House Republicans about a deal, the president prefers to accuse them of holding the country hostage in order to advance their ideological goals. That’s a smart political tactic and played a not insubstantial role in his re-election.

But the inconvenient facts about his own use of the same tactic lays bare his hypocrisy on the issue. Far from being rooted in principle, the president’s refusal to acknowledge his past conduct shows that his current stonewalling on the debt ceiling is an act of cynicism unworthy of his office or the support of the public. 

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The Trillion-Dollar Platinum Coin

There is a new idea racing through the chattering classes for how President Obama could avoid the debt ceiling. It’s simple: He instructs the Treasury to mint a $1 trillion coin made of platinum that is then sent to the Federal Reserve. The Fed, in turn, credits the Treasury with $1 trillion and the Treasury, its coffers replenished, then goes on its merry way writing checks.

Is it legal? Well, yes, in the narrowest sense.  Section (k) of 31 USC § 5112 says that:

The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

Of course, there is one small problem: Platinum is currently selling for about $1,590 a troy ounce. So a $1 trillion coin would weigh 26,221 “troy tons,” which might present a bit of a transportation problem getting from the mint to the Federal Reserve. There is also the problem that nowhere near that much platinum has ever been mined since the metal first came to the attention of chemists in the 1740s. Last year a grand total of 211 tons was mined worldwide, almost all of it from South Africa, Russia, and Canada.

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There is a new idea racing through the chattering classes for how President Obama could avoid the debt ceiling. It’s simple: He instructs the Treasury to mint a $1 trillion coin made of platinum that is then sent to the Federal Reserve. The Fed, in turn, credits the Treasury with $1 trillion and the Treasury, its coffers replenished, then goes on its merry way writing checks.

Is it legal? Well, yes, in the narrowest sense.  Section (k) of 31 USC § 5112 says that:

The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

Of course, there is one small problem: Platinum is currently selling for about $1,590 a troy ounce. So a $1 trillion coin would weigh 26,221 “troy tons,” which might present a bit of a transportation problem getting from the mint to the Federal Reserve. There is also the problem that nowhere near that much platinum has ever been mined since the metal first came to the attention of chemists in the 1740s. Last year a grand total of 211 tons was mined worldwide, almost all of it from South Africa, Russia, and Canada.

So the Treasury doesn’t have that much platinum. Indeed, as far as I know, it doesn’t have any at all, as platinum has never been considered specie, the metals from which coins are minted.

And coins, by economic definition, must be made of metal whose value approximates the face value. (Coins, even when not debased, have always contained a little less metal than the face value to discourage melting them down. The difference is known as “seigniorage,” and provided the sovereign power that minted the coins with a tidy profit.) The United States hasn’t minted coins for general circulation since 1965. Those bits of metal jingling in your pocket are technically tokens. And they aren’t legal tender.

So could the Treasury mint a coin, say the size of a silver dollar, out of platinum, and simply inscribe it $1,000,000,000,000? To do so would be indistinguishable, in a practical sense, from sending over new bonds with the face value of $1 trillion, as the coin would have an intrinsic value that would be only the tiniest fraction of a trillion dollars. That would violate Congress’s sole power to borrow money.

And, of course, if the Treasury were to try such a stunt, it would only make the lawyers rich and would, inevitably, cause the world’s money markets to think the United States government must be in really bad financial shape to even think about doing such a thing. The result of that: Good luck rolling over outstanding federal debt at anywhere near the same interest rates the government is paying now. We would be instant Greece.

So the platinum coin idea is nice for cocktail-party chatter, but it won’t solve the Obama administration’s desire to gut the constitutional power of the House of Representatives and do as it damn well pleases with regard to spending. Indeed, how such desperate ploys can exist in the same intellectual universe as the idea that the government doesn’t have a spending problem is a question only a liberal could ignore.

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