Last week, Treasury Secretary Jacob Lew sent the House a very serious warning that, for the first time, the United States would be unable to pay its bills beginning on Oct. 17 if the debt ceiling is not lifted. House leaders responded this past Thursday with one of the least serious negotiating proposals in modern Congressional history: a jaw-dropping list of ransom demands containing more than a dozen discredited Republican policy fantasies:
Speaker John Boehner and the other GOP leaders said they would refrain from deliberately sabotaging the global economy if President Obama allows more oil drilling on federal lands, drops regulations on greenhouse gases, builds the Keystone XL oil pipeline, stops paying for the Consumer Financial Protection Bureau, makes it harder to sue for medical malpractice, and, of course, halts health care reform for a year. (We will also hold our breath and turn blue in the face if we do not get what we want!)
The absurdity of the list shows just how important it is that Mr. Obama ignore every demand and force the House extremists to decide whether they really want to be responsible for an economic catastrophe. Many items on the list are intended to put vulnerable red-state Democratic senators on the spot should the plan wind up in their chamber. One of them, Joe Manchin III of West Virginia, said Thursday he could support a year’s delay on health reform. If the unified Democratic opposition to the debt-ceiling threat is shattered in the Senate, the pressure on Mr. Obama to come to the table would be intense.
It is clear the Republican agenda is to overturn the duly enacted Affordable Care Act while nullifying the Supreme Court decision and the presidential election of 2012. They want to prove that their intransigent brand of “constitutional conservatism” can work politically. They want to prove that the minority can rule the majority through temper tantrums, lies, and obstruction.
Any sober-minded lawmaker should realize that the danger of trifling with the debt limit is far too high. But Mr. Boehner has been encouraging his members to toss their pet projects onto the towering list of demands. By day’s end, many Republican members remained skeptical of the leadership plan. The House leaders clearly hope the president will take the bait and negotiate on a few items on the list, forcing him to break his promise never to bargain over the debt ceiling ever again.
A failure to raise the debt ceiling would cause a default on government debt, shattering the world’s faith in Treasury bonds as an investment vehicle and almost certainly bringing on another economic downturn. Unlike a government shutdown, a default could leave the Treasury without enough money to pay Social Security benefits or the paychecks of troops. The full effects remain unknown because no Congress has ever allowed the government to go over the brink before. The Government Accountability Office estimated that simply by threatening to default in 2011, Republicans cost taxpayers $1.3 billion in higher interest payments because of that uncertainty. The 10-year cost of those higher-interest bonds is $18.9 billion.
There is no one, not even debt default enthusiasts, who think wrangling over the debt limit is going to be good for the economy.
To prevent the House from making every debt-ceiling increase an opportunity to issue extortionist demands for rejected policies they can achieve in no other way, the president has to put an end to the routine creation of emergencies once and for all by simply saying NO. Obama made a mistake by negotiating in 2011, hoping to reach a grand bargain. During that negotiation the GOP produced and insisted on the corrosive sequester cuts to which the president agreed.
If no negotiations occur, then there is a reasonably high probability that the GOP’s corporate allies will make Boehner walk the plank and cooperate with House Democrats to pass a “clean” debt limit increase. That’s actually the only sane way out of the dark place Boehner is leading the country towards right now.
Keep telling the Teapublicans “NO,” Mr. President. Stay firm. Walk a straight line. Do not waver. Nip this hostage taking in the bud. Once this happens, the Teapublicans in the House will have real head-exploding convulsions – hopefully to the point of not being re-elected next year.