Editore"s Note
Tilting at Windmills

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May 3, 2011

SETTING UP A 'CLEAN' VOTE FOR FAILURE.... House Majority Leader Eric Cantor (R-Va.) suggested this morning that the House will agree to vote, up or down, on a "clean" bill to raise the debt ceiling before the country reaches the debt limit in two weeks.

That may sound encouraging, but it's not. The point would be to set up the "clean" bill to fail in order to "send a message" to the Senate and the White House.

"If it is necessary for us to tell the president that it is dead on arrival in the House, I believe that we can do that," Cantor said following a Republican conference meeting. [...]

Cantor, who sets the floor schedule for House Republicans, rejected the idea of raising the debt ceiling without real cuts to spending and accompanying reforms. He said the White House wants to raise the nation's ability to borrow without cutting spending.

"I think that what we've heard from the president as well as a number of Democrats here in the House is that they'd like us to just go ahead and increase the nation's credit limit without any changes," Cantor said.

Um, yeah, actually they would. This isn't a secret. When Dems say, "Let's pass a clean bill," it means they want a clean bill. Does Eric Cantor think he was sharing some kind of new revelation this morning? Is he just now figuring out that Democrats want lawmakers to "go ahead and increase the nation's credit limit without any changes"?

For that matter, I also wonder if Cantor realizes that every other Congress, including those led by Republicans, also went ahead and increased the nation's credit limit without any changes. It's not like a clean bill would somehow be a radical departure -- it's actually the norm, and consistent with how the process has always worked. Indeed, Republicans holding the debt limit hostage is something no majority party has ever done.

Now, former Bush aide Peter Wehner doesn't see it that way. He argues that the Republican expectation of a payoff in exchange for doing the right thing isn't unprecedented at all -- Dems, he said, played the same game just a few years ago during the Bush presidency.

I get the sense others in the media buy into this, as if what we're seeing now is just another routine partisan game. Dems hatched reckless schemes under Bush, Republicans are hatching a reckless scheme under Obana, and this is just how the world turns.

But that's not true at all. What House Republicans are up to in 2011 has no modern American precedent. Parties have huffed and puffed about the debt limit before, but Wehner's misguided outrage notwithstanding, Democrats never seriously put the country in danger, never invited a debt-ceiling crisis, and they certainly received a ransom for doing their duty.

Did previous Congresses posture? Sure. Did they hold administrations hostage, threatening to destroy the economy on purpose? Of course not.

Nevertheless, the House will consider and kill the clean bill, probably soon, and tell the White House to start meeting the GOP's ransom demands. The moment that happens, though, it may also send a signal to the financial industry and foreign investors that Washington dysfunction really is putting America's future at risk.

As Ezra Klein noted last week, "The danger in this is that as the rhetoric ramps up, the market may not realize this is all just more of Washington's fun and games. Brinksmanship runs the risk of misjudging what is the last minute, or the maximum amount of uncertainty, that the market will accept before it reevaluates the American government's capacity to pay its debts back in a timely and smooth way."

Steve Benen 4:50 PM Permalink | Trackbacks | Comments (16)

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Comments

Look, it's not the Republicans' fault that Obama hasn't renounced his Presidency, given the Oval Office to Roger Ailes to pick a worthy successor on a reality series and put on a housecoat to start serving drinks for the Fox News primetime lineup, like the good boy he ought to be. Until this uppity Chief Executive learns his place, the GOP has no choice but to keep teaching him a lesson.

Posted by: slappy magoo on May 3, 2011 at 4:57 PM | PERMALINK

A minor correction. I believe Steve meant to say, "Democrats never seriously put the country in danger, never invited a debt-ceiling crisis, and they certainly [never] received a ransom for doing their duty."

Posted by: Chris on May 3, 2011 at 4:59 PM | PERMALINK

Right now, Obama should simply say he will accept no bill but a clean bill, and if Congress can't pass one he will use his constitutional authority to protect the United States by instructing the Treasury to issue securities as needed with or without a new limit.

Posted by: JMG on May 3, 2011 at 5:01 PM | PERMALINK

Come on the media will 'invent' that the Democrats did it too .. reality does not matter to them either because they and the Repiglicans are one and the same ........ just wait for it on corporate cum slut David Gregories 'Meet The Propagandists' ... it's coming soon ..........

Posted by: stormskies on May 3, 2011 at 5:20 PM | PERMALINK
Is he just now figuring out that Democrats want lawmakers to "go ahead and increase the nation's credit limit without any changes"?

Actually, they don't want that at all, and Cantor is demonstrating that he has no idea what he is talking about by presenting that as even an issue (or as something that anyone would want to oppose.) The debt ceiling is not a credit limit. A credit limit is how much other people will let you borrow, and is driven by perceptions of your creditworthiness. A debt ceiling is how much you will let yourself borrow, and has nothing to do with your creditworthiness.

The U.S.'s credit limit, at any given cost of borrowing, is set by the markets and there is very little directly Congress can do about it (though irresponsible action with regard to the debt ceiling could indirectly result in a lower credit limit at any given cost of borrowing, by reducing the U.S.'s perceived creditworthiness.)

Obviously, if Congress could raise the credit limit without any other changes (which is exactly equivalent to reducing the cost of federal borrowing), that would be an unqualified good thing for government finances and it would be ludicrously irresponsible for anyone in Congress to oppose it.

Posted by: cmdicely on May 3, 2011 at 5:35 PM | PERMALINK

What House Republicans are up to in 2011 has no modern American precedent.

It has NO American precedent. No other congress has ever acted so recklessly and irresponsibly as this one. Not one. These Southern traitors are NOT "Republicans" as that term is commonly understood. They are Unreconstructed Confederate Traitors.

They are doing what Alexander Stevens and his team of traitors only dreamed Southerners could do to screw things up in Congress before the Civil War.

Posted by: TCinLA on May 3, 2011 at 5:47 PM | PERMALINK

Actually, the only other legislature to ever see this much active undermining was the German Reichstag in 1931-33, with what the Nazi members were doing to discredit the government in its attempts to deal with the crisis of the Depression.

They did it as these guys are doing it: for the sole purpose of subverting and destroying the government.

Posted by: TCinLA on May 3, 2011 at 5:50 PM | PERMALINK

In essence, (as TCinLA notes) these people are little more than a bunch of white-collar crooks. Their almost desperate behavior to establish a right-wing "conservative" utopia before their power is diminished by future elections is obscene.

Posted by: -syzygy- on May 3, 2011 at 6:16 PM | PERMALINK

BHO is likely to be faced with a stark choice. Cave to domestic terrorist tactics or face a credit crisis. BHO didn't cave on Osama BL. It would be nice to see him use his new-found political capital and not cave on the debt ceiting or the 2012 budget--- as he has caved time and time again on economic issues (including insurance "reform") in the last two years. Caving only prolongs the crisis-- it doesn't avoid it.

I applaud BHO's agressive risk taking on OBL. Insofar as the past predicts the future, I'd still bet it doesn't apply to domestic terror tactics. I bet the Repubs also think it doesn't.

Posted by: gdb on May 3, 2011 at 6:33 PM | PERMALINK

What scares me in all this is the GOP myth that markets are rational. Markets operate on mob psychology - nothing rational about that. Every couple of years I hear that such and such is a fool proof investment, will only go up. I say no and people taunt me, sometimes for years, as they get richer and richer, claiming that the most basic economic rules have been suspended (more likely that the laws of gravity would be suspended), but, if I hold out long enough I always get the last laugh. In the periods in between those irrational highs I listen to people telling me that civilization as we know it is doomed - buy all the gold you can get your hands on, leaving some money over to stock up on guns, ammo, and canned goods. Eventually things get better.

The market place is like a big field, filled with cows, browsing for food. So long as things remain calm every thing appears rational, but you really don't want to go shooting off any guns. Voting down a clean bill on the debt ceiling will be like shooting off a gun on the edge of a vast prarie full of browsing cows. It won't be absolutely certain to set off a stampede, but I would want to be standing on high ground when the shot goes off - just in case. Not all investors are going to hold on to their government bonds till defaults start, some will start selling as soon as there is a failed vote...some may start selling even before that.

Posted by: majun on May 3, 2011 at 6:51 PM | PERMALINK

BTW, love the juxtaposition of this post, right above "The Wisdom of Crowds" :o)

Posted by: majun on May 3, 2011 at 6:54 PM | PERMALINK

What the Democrats did under Bush was force him to raise the debt ceiling with Republican votes. Standard operating procedure for the Republican majority was to cut taxes, spend like drunken sailors, and then beat up the Democrats for raising the debt ceiling. The Democrats just made it clear that they would not vote to raise the Bush debt ceiling unless there was Republican support for it.

Posted by: J. Frank Parnell on May 3, 2011 at 6:55 PM | PERMALINK

I'm with JMG on strategy.

And Obama can remind the Republicans of Section 4 of the 15th Amendment:
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

Posted by: jsjiowa on May 3, 2011 at 7:07 PM | PERMALINK

oops, that's the 14th amendment.

Posted by: jsjiowa on May 3, 2011 at 7:09 PM | PERMALINK

The debt ceiling WILL be raised.
The only question is whether that happens BEFORE or AFTER the markets crash...

Posted by: Doug on May 3, 2011 at 7:42 PM | PERMALINK

I think House Democrats should abstain from voting on the bill, and decline to vote for the new debt ceiling unless the GOP makes concessions to *them.*

The Senate and Obama need to reject anything but a clean bill. Then House Dems should refuse to vote for any bill. The GOP could pass the clean bill themselves, of course, but they won't be able to. Too many of them will be too afraid of their base. It will need Dem votes to pass.

So Dems should sit on their hands until Boehner comes begging them on his knees (crying, of course) to save his tenure as Speaker from perpetual infamy by voting for the clean bill.

Call that bluff. The limit has to get raised. Dems have the power to demand a clean bill, and the House is going to have to pass a clean bill. The GOP has nothing to bargain with here except the demolition of the country, which their corporate backers won't let them use. This is a no-brainer for Democrats. They just need to sit back and watch.

Posted by: Jon on May 3, 2011 at 8:39 PM | PERMALINK
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