GOP Leadership caves. For now.
by David Atkins
The Republicans have caved on the debt ceiling hostage threat, at least for now:
House Republicans announced Friday that they will vote next week to authorize a temporary extension of the debt limit, pushing off a politically unpalatable fight in the hopes of extracting further spending cuts from Democrats in a new budget deal.
The new offer, announced at the conclusion of a three-day retreat, represents a modification of the Republican leadership’s previous demand that any debt limit increase, temporary or otherwise, must include equivalent spending reductions. The temporary increase this time comes with the stipulation that it will “give the Senate and House time to pass a budget,” something the GOP notes that the Democratic-led Senate has failed to do so for years.
But if Republicans are willing to release the hostage now, there's no reason to believe they'll be able to hold onto the hostage later. They hope to use the sequester itself as extra ante, but as Greg Sargent notes, that's not likely to work for them:
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.
On the debt ceiling, at least, this is a complete cave. As noted below, the mere willingness to raise the debt ceiling temporarily was itself an acknowledgment by Republicans that the threat of default gave them no leverage and that they had essentially lost this fight. Now the three month extension means that in practical terms, it’s essentially been removed from the talks entirely.
I'm not sure I entirely agree with Greg here. The threat of default does give the GOP leverage by definition (if it didn't they wouldn't have threatened it), as long as they're willing to threaten the nation with default to get what they want. Democrats would theoretically have the same leverage if they played the game that way, but making the government catatonically dysfunctional hurts Democratic ideas and interests (as well as, obviously, the entire national and global economy.) But there are still apparently enough sane Republicans left, combined with big money interest in avoiding default and worry about the collapsing public approval for the GOP for them to rethink taking down the entire American economy.
And, for what it's worth, it means the Republicans took seriously the President's statements about refusal to negotiate over the debt ceiling--meaning that Republicans don't necessarily see the President as a total pushover. All of that is good news. What's more, the momentum of negotiation is now on the other side, with Democrats now demanding a clean debt ceiling hike with no funny business attached. This would force Boehner to come up with at least a Hastert Rule majority of Republicans for the three-month extension, which will be no easy task with the rabid Tea Party faction demanding immediate default absent spending cuts. After the Plan "B" fiasco, it's not clear that Boehner could achieve that.
The two major concerns at this point are 1) whether Boehner can maintain his leadership position while constantly undercutting the Tea Party crowd; and 2) what sort of concessions Democrats will be tempted to make in order to take the sequester off the table.
All in all, though, today's news is good news. Democrats called the GOP bluff on their threat to destroy the economy for ideological gain, and the GOP folded. There's no reason to believe they won't fold again when the pressure's on. That leaves Democrats in the driver's seat.
At this point, if there are cuts to Social Security, Medicare or other important programs, it will be entirely on Democrats' heads unless the GOP finds a different, more credible hostage. I'm sure the search is already on.
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