Friday, May 13, 2011

Debt Ceiling Machinations

Over the past 29 hours (note: all times listed there are PST), Digby has posted thrice on the debt limit, under the headings "Brinkmanship for Dummies," "Negotiatin'," and "McConnell pounds his chest and stomps his feet."

The bad news she notes is reflected in yesterday's exchange on Andrea Mitchell Reports between the Speaker of the House and the chairman of the Democratic National Committee:

John Boehner: Democrats want a free pass to continue to spend more. We're in a hole and Democrats won't give up the shovel. Doing nothing is not an option, the American people won't tolerate it and neither will we.

DebbieWasserman-Shultz: He has some nerve not sitting around the table with Democrats, hammering out some compromise and striking a balance. What President Obama called for a few weeks ago was that we needed to strike a balance. We need to make sure that we engaged in shared sacrifice. So Democrats aren't just calling for revenue increases and tax increases. What we are calling for is that the wealthiest among us and the middle class and even people who can't bear any more pain all share the sacrifice to fix our deficit and make sure that we can continue to create jobs and turn this economy around.

McConnell has learned that when negotiating with the Democratic Party of Barack Obama, there is no better tactic than staking out a position on the far left while Democrats gradually move from the center-left, to the center, and finally to the right in an effort to "compromise" with the defiant extremists of the GOP. Eventually, when a deal is struck, the President can claim victory for himself by reaching across the aisle and compromising, getting the deal- any deal, but a deal- done. The "shared sacrifice" cited by Wasserman-Schultz is euphemism for cutting Medicaid and Medicare, throwing the poor, the disabled, and the elderly to the side while the wealthy maintain their tax breaks and tax cuts. Digby explains

I'm sure there are plenty of people who think this is a terrific way to show that the Democrats are "serious" about deficit reduction and God knows there's nothing more important than that. But I will just remind them that actual human beings' lives are at stake in this and that the last time a president proved that Democrats were responsible fiscal stewards they impeached him for his trouble and gave the money to their rich friends the first chance they got.

Senate Minority Leader McConnell is holding out for a "grand bargain" which, in the words of Bloomberg News, would include "sharp cuts in entitlement spending," otherwise known as Medicaid and Medicare. (What, no Social Security? I guess it really doesn't have anything to do with the deficit, after all.) Democrats might demand a tax hike and/or cut in defense spending as part of this arrangement but, Digby notes, this is

not a bargain, that's a suckers play. The entitlements will stay cut while the tax hikes and defense cuts will be reversed the first time the Republicans gain the power to do it. That's always their first order of business.

But the good news comes from a Wall Street Journal blog:

Sixty-two business groups, including the American Gas Association, the Telecommunications Industry Association, and the National Association of Manufacturers, urged congressional leaders on Wednesday to raise the federal debt ceiling amid fears that political brinkmanship could lead to another financial crisis.

“Raising the statutory debt limit is critical to ensuring global investors’ confidence in the creditworthiness of the United States,” the groups wrote to Speaker of the House John Boehner (R., Ohio), House Minority Leader Nancy Pelosi (D., Calif.), Senate Majority Leader Harry Reid (D., Nev.) and Senate Minority Leader Mitch McConnell (R., Ky.). “With economic growth slowly picking up we cannot afford to jeopardize that growth with the massive spike in borrowing costs that would result if we defaulted on our obligations. It is critically important that the United States stands fully behind its legal obligations.”

The letter comes less than one week before the U.S. government is expected to hit the $14.294 trillion debt ceiling.

The American Gas Association, the Telecommunications Industry Association, and the National Association of Manufacturers. This is a big chunk of the GOP's corporate base which, ultimately, is its base. The powers- several of them, anyway- are eager to see the debt ceiling lifted, and anxious that it won't be. Given a choice between aggravating those powerful allies and seeming to anger the tea party enthusiasts, the Repub politicos will choose Option B. (The Tea Party leaders are corporate-connected and the rank-and-file can be bought off by abortion or some other issue.)

Top GOP leaders are primed to go with the Big Money Guys, who are their kind of fellows. Democratic leaders know it, and if they acquiesce in a cut to either Medicaid or Medicare, it's because they want the cuts, for tactical political reasons or otherwise. They will not have acquiesced, but collaborated. And we all know who the top co-conspirator will have been.

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