I'm still a little skeptical, but whether it's three months, or three years, a House Republican cave on the debt ceiling bodes well for our economy and dealings with Congress, wingnuts or no wingnuts.
According to The Hill, House Republicans are going to propose a three-month raise to the debt ceiling with some contingencies attached:
House Republican leaders on Friday announced a plan to condition a three-month increase in the debt limit on the Senate committing to pass a budget by the April 15 statutory deadline.
“Before there is any long-term debt limit increase, a budget should be passed that cuts spending,” Speaker John Boehner (R-Ohio) told the Republican conference in remarks to close the party’s three-day retreat in Williamsburg. “The Democratic-controlled Senate has failed to pass a budget for four years. That is a shameful run that needs to end, this year.”
The House will also seek to prevent members of Congress from being paid if the two chambers do not pass a budget resolution.“We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government’s spending problem,” Boehner said. “The principle is simple: no budget, no pay.”
The "no budget, no pay" piece of their proposal appears to be unconstitutional, according to ThinkProgress, but that's a small thing compared to the fact that it looks as though they're prepared to release the hostage, and once they do that, there's no turning back.
Steve Benen points out that releasing the debt ceiling hostage simply exchanges one for another:
That said, it also appears the congressional GOP hopes to trade one hostage for another.
Even if Republicans now seem to realize they can't follow through on their debt-ceiling threats -- they really should have thought this through beforehand -- GOP policymakers still appear committed to aggressive confrontations on automatic sequestration cuts and funding levels for the government itself.
To be sure, these threats carry a punch. The sequester includes deep cuts that neither side wants and a fight over spending levels may very well lead to a government shutdown, but neither pose the catastrophic dangers associated with a genuine debt-ceiling crisis -- and even House Republicans seem aware of this, which is why they have no intention of shooting this hostage.
There's apparently growing GOP support for a clean, short-term extension of the debt ceiling -- which, as we discussed yesterday, doesn't seem to make any sense at all -- which would presumably set the stage for additional talks. This will play out soon enough, but at a certain level its impact is limited. Once everyone in Washington -- Democrats and Republicans, the White House and Congress -- realizes that GOP leaders aren't prepared to allow a default on our obligations, the game is effectively over.
Here’s why this matters: This increases the debt ceiling to authorize borrowing to pay the country’s bills well into April. That punts the debt limit deadline until after the deadline for funding for the government to run out, which is on March 27th. In other words, Republicans will now use the threat of a government shutdown along with the coming expiration of the sequester to extract the spending cuts it wants. Presuming this all gets resolved by then, or soon after, it means the threat of default is no longer a factor. This will all but certainly get resolved in advance of this three month deadline, and a long term debt limit hike will get attached to that agreement.
It's that last bit that has me skeptical, though Krauthammer was pretty specific in his column about what the GOP will not get while this President is in office and while the Senate majority is a Democratic one. In that column, he's blunt:
The party establishment is coming around to the view that if you try to govern from one house — e.g., force spending cuts with cliffhanging brinkmanship — you lose. You not only don’t get the cuts. You get the blame for rattled markets and economic uncertainty. You get humiliated by having to cave in the end. And you get opinion polls ranking you below head lice and colonoscopies in popularity.
There is history here. The Gingrich Revolution ran aground when it tried to govern from Congress, losing badly to President Clinton over government shutdowns. Nor did the modern insurgents do any better in the 2011 debt-ceiling and 2012 fiscal-cliff showdowns with Obama.
Obama’s postelection arrogance and intransigence can put you in a fighting mood. I sympathize. But I’m tending toward the realist view: Don’t force the issue when you don’t have the power.
Releasing the hostage is good, but it isn't the end of the line by any means. It does, however, allow some breathing room to actually work through some kind of deal that ends the standoff over budget cuts and if Krauthammer's words carry any weight, it seems that he's signaling to Republicans that they take on more modest challenges and win smaller battles rather than trying to take on unwinnable large battles.
Jonathan Chait argues that a short-term debt ceiling increase seems somewhat pointless, and has similar concerns to mine:
Will it work? You have to ask yourself what the point is. If Republicans can’t threaten to shoot the hostage, what do they gain by holding new debt ceiling votes every few months? It’s either leverage or it isn’t. If it isn’t, then a new vote every few months won’t do anything for the GOP. Indeed, it will annoy Republicans, who will be forced to take more and more “he voted to increase the debt ceiling fourteen times!” votes.
Still. I don't trust Republicans enough to call this a win. At best, it's a stabilizing move, assuming it can pass the House without some Democrats tossing in their votes too. Or maybe they have come to the conclusion that holding the debt ceiling hostage is simply a losing strategy that would undo any hope of getting anything passed that is on their agenda, in which case they'd be better off doing one clean, long-term raise of the ceiling and moving on to the budget battles.
Stay tuned. They still have to vote on it.
Counterpoint: After writing this, I've seen more people weigh in. Nancy Pelosi will not accept a debt ceiling bill with contingencies, according to Greg Sargent. Jason Easley at PoliticusUSA weighs in with a warning that this is just an Eric Cantor bait and switch to force the Senate to pass the House budget without any changes.
Eric Cantor’s offer is totally bogus. Rep. Cantor was proposing that as long as the Senate will agree with the House on budget, the House will raise the debt ceiling for 90 days. Cantor expects the Senate to trade three months of debt ceiling for one year of spending cuts. Look carefully at what Cantor proposed. He didn’t propose that the Senate has to pass a budget. He said that the House and Senate both have to pass a budget. Rep. Cantor was referring to a budget that both the House and Senate agree to, not just a Senate budget.
It's unclear right now whether the actual bill would be a clean raise for three months, or one with contingencies attached. If the latter, then yes, it's simply a bait-and-switch.