Basically, where we’re at is this. Talks on the Debt Ceiling have broken down. The GOP was originally invested in a Debt Ceiling deal that had an 85-15 split of spending cuts to tax increases, that number coming from a report from the Conservative American Enterprise Institute. This was a report highlighted in fact on Speaker Boehner’s website. (Bet you dollars to doughnuts that that report has been taken down).
The good news in all this is that the spending cut number (around 2.4 Trillion over ten years) has pretty much been agreed to. This would be the 85 number.
Well, the Democrats offered an 83-17 split on spending cuts to tax increases (which included ending subsidies for Oil Companies and a Payroll Tax Cut), and that’s when Eric Cantor bailed on the talks and things pretty much collapsed.
Then the President spoke in a Press Conference that I enjoyed mightily. Still, the fact that the President had to speak was bad news because (as Ezra said on the day of the presser):
The best advice I’ve gotten for assessing the debt-ceiling negotiations was to “watch for the day when the White House goes public.” As long as the Obama administration was refusing to attack Republicans publicly, my source said, they believed they could cut a deal. And that held true. They were quiet when the negotiations were going on. They were restrained after Eric Cantor and Jon Kyl walked out last week. Press Secretary Jay Carney simply said, “We are confident that we can continue to seek common ground and that we will achieve a balanced approach to deficit reduction.” But today they went public.
Let me take a moment to answer one of Lawrence's questions. He asked, why didn't the Obama White House just use the Clinton model for deficit reduction?
Ummm, Lawrence. Have you met today's Republican party?
So what happens now?
Well, frankly…it depends on how batshit insane the Republicans are, and how pissed off the Chamber of Commerce actually gets.
Remember the Chamber of Commerce warned Republicans flat out, that should they fail to raise the debt ceiling; “We will get rid of you”. Of course the Teabagger Caucus did not react kindly to that threat, but I have no doubt that the Chamber is serious. A Debt Default is going to have catastrophic and frankly, unpredictable consequences to the greater, planet-wide Economy. Remember September 15th, 2008? (aka, the day Barack Obama won election), well…that only times ten.
If you’re a conservative, things look pretty simple. You’ve got a President in the White House you don’t like. You’ve got a stalled economy that stalled because of your policies and ideas, but you’re still committed to those same policies and ideas because even though they make the middle class miserable, they don't count in your world. All that does count are the people you really work for (Rich folks and Multinational corporations). If you cooperate with the sitting President (aka, doing your job) there’s a chance things will get better for the people. Can't have that, because that would mean the President would get re-elected. However, if you hold out for your most cherished, bat-shit insane policy ideas that you wouldn’t even let see the light of day under a Bush Administration, well, not only can you stall any economic momentum for a recovery (thereby damaging the President), but you can also appeal and excite your own base in the process. WIN-WIN!!!
I would first refer the Chamber of Commerce to the story of Pandora’s Box. You let these batshit insane Teabagger shitheads into the tent, this is what you get:
In case, you don't understand why I'm making this particular movie reference, or have (rightfully) forgotten Jurassic Park 2. The idiots (aka, the main characters) decided to "rescue" a baby T-Rex. That'd be Mama in the video, sniffing clothes that are soaked in the baby's blood. Think of them as tax breaks for Corporate Jet owners for the purposes of this argument. "Hilarity" ensues after that.
The more the Chamber stands by its threat to destroy any Republican who stands against a raise in the Debt Ceiling, the more likely there is to be a deal. Period.
Fortunately, we are seeing signs of life from the Democrats. One, they've pretty much thrown down a hard marker on Medicare cuts. Ain't happenin' chief, what else you got? Senator Schumer is taking to the airwaves repeatedly to accuse Republicans publicly of the scenario I’ve outlined. And yesterday, on Keith’s new Countdown show, he brought forth Ryan Grim to first discuss the 14th Amendment scenario.
My inclination the moment Keith brought it up was to dismiss it (after all, this is Keith we’re talking about). But then Lawrence brought it up as well.
I still kinda dismissed it, but the fact that he's got Bruce Bartlett to agree with the notion carries some weight with me.. But now, Senator Chuck Schumer (D-NY) has brought it up today, even though he has his doubts.
"It's certainly worth exploring," Schumer said. "I think it needs a little more exploration and study. It's probably not right to pursue at this point and you wouldn't want to go ahead and issue the debt and then have the courts reverse it."
I still see this as officially a push by the Democrats to get this idea out there.
The Senator from Wall Street is right. We don’t know what the economic consequences would be of a debt default, we also don’t know how markets would react to the President simply ignoring Congress and continuing to borrow money.
If you were interested in buying up U.S. Bonds, how would you react to the President taking the podium and saying, basically, screw Cantor and Boehner. We’re going ahead, business as usual. My guess is a Bond buyer might hesitate, and say “Should we be buying this stuff. Is it safe? What does it mean?”
Between this threat, this new Nuclear Option, and the release of a new drop-dead default date of July 22, it’s clear the full court press is on.
Basically, what I see happening is this. The Democrats rattle the Nuclear Option theory. Republicans howl in protest. Jim DeMint says the Constitution didn’t mean what it says. Someone tries to change the Constitution on Wikipedia, and ultimately, the GOP quietly agrees to the 83-17 split a week before the deadline and declares victory.
Of course, that'd mean dealing with a sane GOP. And frankly there's no evidence that they're out there.
I mean, for pity’s sake, you watch the Teabagger shithead caucus, always crying for their love of the Constitution is going to attack the President for sticking to the letter and law of the Constitution. Watch it happen. There’s never an egg-timer around when you need it. (Hat tip, Randi Rhodes).
The President is going to have to carry through with his unspoken threat, and while dear ol' Doctor Dad would disagree, I think the dire nature of what could happen would force to President to do it. I mean, if the GOP won’t deal fairly. If any bill the Democrats propose gets filibustered in the Senate. If the Teabaggers bite the hand of their Chamber of Commerce masters, what option is Obama going to have left?
As ugly as the consequences might be, they’d be worse if he did. If DeMint won’t come back to reality, pick the Constitutional fight, and pull the Debt Ceiling trigger. What would we have to lose?
