Well this is about the most depressing way to start off the morning I can imagine. Greg Sargent reports:
There’s no way around it: Republicans have won the political war over the debt ceiling. The House is set to vote today on a proposal for a debt ceiling hike without any spending cuts attached. It will be rejected — the GOP is unified against it, and even some Democrats will vote No. This is the “clean” vote Dems originally sought, but it’s now clear that Dems think it’s politically impossible not to accede to the GOP demand for deep cuts in exchange for raising the debt ceiling.And so, with the Biden-led deficit negotiations set to resume this week, Mitch McConnell has now begun insisting that big Medicare cuts will be necessary in exchange for GOP support for the debt ceiling hike. Thanks to their willingness to draw a hard line at the outset, Republicans now appear poised to win big concessions in exchange for supporting something that they and everyone else have already said is inevitable.
Well yeah. I go back to my first post on this issue back in January:
Cantor just said that they will have to raise the debt ceiling. He said it out loud and on the record. Therefore, we now know that any capitulation made by the President and the Democrats in the negotiations will be made because they wanted to make them. There can be no doubt about that.
There’s a lot of interesting chatter this morning about all of this, but this one, by Stan Collender in Roll Call is most intriguing. He says that just because the Republicans get their wish for a failure of a clean vote, it does not necessarily follow that they would vote for a “dirty” one either. He feels this vote is entirely a kabuki dance that’s necessary (because of the polls saying people don’t want to raise the debt ceiling) for the Republicans to record a “no” vote no matter what’s in it.
Many Members publicly insist that a big “no” vote on a clean bill will have little to no effect on financial markets. But here’s another dirty little secret: There is a growing suspicion that, like what happened the day after the House rejected the Troubled Asset Relief Program in September 2008 and the Dow Jones Industrial Average fell by almost 7 percent, such a vote could quickly change market perceptions of the situation and have a substantial negative effect on interest rates and equity prices.
It’s even possible that’s part of the plan. Former Office of Management and Budget Director Peter Orszag said last week that it is going to be difficult to get Members of Congress to agree to increase the debt ceiling without some kind of “turbulence” in the bond market. A big “no” vote on a debt ceiling increase bill could easily accelerate that type of disturbance in the financial force. Indeed, it might be what’s needed to precipitate it and the leadership may be counting on that happening.It’s even possible that’s part of the plan. Former Office of Management and Budget Director Peter Orszag said last week that it is going to be difficult to get Members of Congress to agree to increase the debt ceiling without some kind of “turbulence” in the bond market. A big “no” vote on a debt ceiling increase bill could easily accelerate that type of disturbance in the financial force. Indeed, it might be what’s needed to precipitate it and the leadership may be counting on that happening.
I don’t know what kind of sick nihilism makes a scenario like that remotely possible, but again, I don’t believe it. We are talking about Big Money here and there are a lot of things that aren’t working right in this country right now, but the greed mechanism isn’t one of them. I don’t believe “the markets” are going along with that plan. And I don’t think even the Republicans are going to take that kind of risk going into an election year.
But if these people are actually planning a financial panic in order to destroy the safety net, can someone explain to me just how it is they can possibly be considered anything but criminals? This isn’t a joke. Panics have a way of getting out of hand — it’s not like you can wave a magic wand and it stops. At the very least can we at least admit that every single sentence they’ve ever uttered about the desperate need for market “confidence” and “uncertainty” was unadulterated rubbish? (If this happens keep an eye on the short sellers because somebody’s going to make money on it and you have to assume the people who caused it are among them …)
The Democrats can turn this clean vote against the Republicans if they want to. The polls may say that the people don’t want the debt ceiling raised, but they also don’t want the government shut down, Medicare to get privatized and the economy to get worse. If the Democrats have even a modicum of guts they’ll relentlessly hammer this vote home for the next two months as a sign of the Republicans’ willingness to do anything to destroy Medicare, even destroy the economy. There are several months of negotiations ahead and they could tie this albatross around their necks right along with the dead Ryan plan if they want to. The real question is whether they want to.
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