Editore"s Note
Tilting at Windmills

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April 28, 2011

TACKLING THE DEBT CEILING INCREMENTALLY.... There's no doubt that policymakers have to raise the debt ceiling. The question in recent months is what kind of ransom Republicans will expect in exchange for them doing their duty.

But that's not the only question. The assumption has been that Congress and the White House would raise the debt limit by a large enough amount to cover the annual deficit. Rep. James Lankford (R-Okla.), a member of the House Budget Committee, told ABC News today that Republicans may consider a more piecemeal approach.

As for one of the next big battles, Lankford said one of the strategies being discussed surrounding the debt ceiling would have Congress authorize only a relatively small increase, to force spending questions to come to the fore again soon if sufficient cuts aren't made to federal spending.

"There are a couple different strategies being talked about. One is keep it low and so we can come back repetitively and keep this in check. And the other one is do a larger piece," he said. "Obviously the president doesn't want to face the Congress that much and so he wants a bigger one. Congress is willing to say, you know ... let's only do it a little bit a time. We'll have to see where we land."

The only thing worse than watching policymakers fight over the debt ceiling is watching policymakers fight over the debt ceiling every couple of months.

It's a recipe for, among other things, (cue scary music) uncertainty. Indeed, playing incremental games with the ability of the country to pay its bills sends a pretty loud signal to foreign countries and markets around the globe: there are just enough children in positions of authority in Congress to cause genuine concern about the nation's finances.

The details of this strategy are not yet available, but it's not hard to imagine how the process would play out -- Republicans would agree to raise the limit a little in exchange for some concessions. Then repeat. Then repeat again. If this sounds familiar, it's because we saw the same dynamic in February and March -- Republicans agreed to fund the government in two-week increments, in exchange for $2 billion in spending cuts per week.

How long would the congressional GOP intend to pursue the "slow-bleed" strategy? Again, we don't know, but if they can trade for concessions at every step, I imagine they'll drag it out as long as possible.

It'll undermine economic stability, create uncertainty, and make the country look ridiculous in the eyes of the world, but then again, that's pretty routine for Republicans anyway.

Steve Benen 3:50 PM Permalink | Trackbacks | Comments (16)

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"How long?" Well, that's an easy one - until there is a Republican President, that's how long.

Posted by: T2 on April 28, 2011 at 3:54 PM | PERMALINK

It'll undermine economic stability, create uncertainty, and make the country look ridiculous in the eyes of the world, but then again, that's pretty routine for Republicans anyway.

A-MEN! The powers that be will talk about ANYTHING to avoid talking about JOBS ... so that once they've strangled the recovery in its crib, they'll be able to blame Obama for not magically creating jobs. I sure hope Team O has a secret plan for beating them back ... he'll be declared a lame duck on 1/21/2013 of course.

Posted by: ManOutOfTime on April 28, 2011 at 3:57 PM | PERMALINK

In my dream world, this announcement would be sufficient for the executive branch to announce that, due to the ongoing state of financial emergency, it would have to build up a cash reserve by eliminating all federal payments to certain legislative-branch functions and certain congressional districts.

Yeah, I know, bad idea. But we really are in the terrorism/blackmail phase, and some kind of summary response is the only thing that will get the blackmailers' attention.

Posted by: paul on April 28, 2011 at 4:04 PM | PERMALINK

Give them nothing, NOTHING. Any concession encourages more blackmail. They will blink first, even if Wall Street has to move their eyelids for them. Make sure everyone knows the Republicans are the ones playing with fire.

Posted by: Keeping Track on April 28, 2011 at 4:19 PM | PERMALINK

This may be the worst Republican idea I have ever heard. Really. Hard to believe, but this one wins the prize.

Posted by: PTate in MN on April 28, 2011 at 4:22 PM | PERMALINK

I'm old enough to remember when Republicans claimed uncertainty about policy was hurting the economy

Posted by: foosion on April 28, 2011 at 4:29 PM | PERMALINK

"This may be the worst Republican idea I have ever heard."

Why would they do anything else? It worked out great for them on the omnibus spending bill.

Posted by: Buckethead on April 28, 2011 at 4:35 PM | PERMALINK

Sounds like a risky strategy with a major election on the horizon. I don't think the public has much appetite for a repeated hostage-taking scenario. At some point, the public anger at Republicans could really work against them. Boehner seems saavy enough to realize this danger; the rest, not so much.

Posted by: jsjiowa on April 28, 2011 at 5:00 PM | PERMALINK

Cue Wall Street...

What force is powerful enough to halt a charging rogue elephant in its tracks?

Posted by: zandru on April 28, 2011 at 5:02 PM | PERMALINK

Obama should demand an increase in debt ceiling equal to what the Ryan budget would require: $6T should do it.

Posted by: Mike from Detroit on April 28, 2011 at 5:26 PM | PERMALINK

Democrats either have to refuse to go along with this approach, or else resign themselves to do everything the Republicans want.

Dems should simply state that raising the debt ceiling is not something that Democrats need to happen more than Republicans need to happen. It's not optional. Therefore there will be zero concessions. Zero, none, zilch. Proposals to cut spending can be discussed, but hostage-taking cannot be tolerated.

Posted by: Joe Buck on April 28, 2011 at 7:01 PM | PERMALINK

I think the Dons of Wall Street may have to communicate their message to the republitards in a somewhat less conventional fashion.

Mere words may not suffice at this point.

Posted by: bdop4 on April 28, 2011 at 7:39 PM | PERMALINK

zandru has a way with words.

This should be an easy one for the Democrats. Just say no to concessions. And then let Wall Street and the Bankers take care of the debt ceiling. They own Congress; it will happen.

Posted by: jeri on April 28, 2011 at 7:43 PM | PERMALINK

Perhaps the "conversations" with their constituents have something to do with this?
They may be waking up to the fact that their "economic policy" WON'T win them votes in 2012, will probably cost them control of the House and blast any chance they might have of winning control of the Senate. Therefore, ANYTHING that puts their policies into place can and will be done.
We should never forget that we're dealing with radical ideologues. As far as these Republican/Teabaggers are concerned it doesn't matter if the country slides into another recession or even a depression; what DOES matter is that their goals are met.
Boehner may be tempted by the idea of wearing Democratic resistance down by forcing a debt ceiling confrontation every six months or so as a way of maintaining "control" over a third of his caucus. It's a temptation he should resist, if only out of self-preservation. These people won't stop with one bite, if they're given ANYTHING in return for an increase in the debt ceiling, they'll keep upping the ante until they overplay their hand and really cause another economic catastrophe.
Too long a period of economic "uncertainty" and a fragile economic recovery can quickly reverse course into a major economic downturn. Nor can I see the present House majority acting swiftly in such circumstances.
If THAT does occur, Speaker Boehner will be the first to go and, while his departure would be nice, it's not worth the cost of another Great Depression.

Posted by: Doug on April 28, 2011 at 8:16 PM | PERMALINK

Based on recent history starting at the end of Bush's term. Who voted against the bank bailout?
Who voted against TARP? Auto companies bailout? Extending unemployment benefits?

Given a chance to destroy the economy some or just enough Republicans seem to stumble toward the possibility. I'd say some are eager to throw another grenade. Incrementally or annually. They enjoy the game.

We will see that the rest of us will have to suffer the consequences. Citizens United is the corporate answer to plutocrats' prayers to destroy populism and extend the era of corporatism.

Posted by: BigSkyDem on April 28, 2011 at 9:40 PM | PERMALINK

I'm more sanguine that Mr. Benen and several comm enters on this strategy.

Every six months, the Democrats could suggest returning to Clinton boom year tax rates for billionaires.

The GOP says no.
Democrats say, okay, spending cuts only, but only enough debt to cover two months.

Does the GOP want to remind the public that they're snipping ropes in the safety net and passing along the savings to billionaires every two months.

Add to it the discomfort of Wall Street allies and there may be some way to sour the love affair Republicans and American business have for each other. Sure she's hot and tells you how handsome you are, but she's no damn good for you. You know it and it's time to leave. Start by not calling so much. Send signals you want to see other people.

Either the GOP extends the debt for a longer period letting the banks breathe (he gives in) or he starts to play head games and she stops being so affectionate(GOP gets starved for cash).

This foolish game is easily double-edged IF the Democrats are willing to play. (After watching them squander countless opportunities, I have little faith.)

Posted by: toowearyforoutrage on April 29, 2011 at 8:24 AM | PERMALINK
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