BO and JB Close In On Deal To Cut Debt Nearly $3 Trillion

[General Mung Beans]

http://www.nytimes.com/2011/07/22/us/po ... ml?_r=1&hp

Boehner and Obama Nearing Deal on Cuts and Taxes
By CARL HULSE and JACKIE CALMES
Published: July 21, 2011

* Recommend
* Twitter
* comments (446)
* Sign In to E-Mail
* Print
*
Reprints
* ShareClose
o Linkedin
o Digg
o MySpace
o Permalink
o

WASHINGTON — President Obama and the Republican House speaker, John A. Boehner, raced against the calendar and resistance from their respective parties on Thursday in a last-ditch effort to strike a sweeping deficit-reduction agreement that could avert a government default in less than two weeks.
Multimedia
TimesCast | Close To A Debt Deal
TimesCast | Close To A Debt Deal
Close Video
See More Videos »
Document
'Gang of 6' Deficit Reduction Plan
Related

*
Push Intensifies for Larger Deal on Debt Impasse (July 21, 2011)

Related in Opinion

*
Editorial: Signs of Intelligent Life in Congress (July 21, 2011)
*
Op-Ed Contributor: An Amendment That Could Not Be Enforced (July 21, 2011)
*
Room For Debate: What Will the Debt Debate Mean for 2012?

Room For Debate
Presidents and Their Debts, F.D.R. to Bush

Who were the true budget hawks? Who were the Keynesians? Some historians tell us how the past led to the current budget standoff in Washington.
Blogs
The Caucus

The latest on President Obama, the new Congress and other news from Washington and around the nation. Join the discussion.

* FiveThirtyEight: Nate Silver's Political Calculus
* More Politics News

Readers’ Comments

Share your thoughts.

* Post a Comment »
* Read All Comments (446) »

Congressional and administration officials said that the two men, who had abandoned earlier talks toward a deal when leaks provoked Republicans’ protests, were closing in on a package calling for as much as $3 trillion in savings from substantial spending cuts and future revenue produced by a tax code overhaul. If it could be sold to Congress, the plan could clear the way for a vote to increase the federal debt ceiling before an Aug. 2 deadline.

But the initial reaction to the still-unfinished proposal hardly suggested a quick resolution. This time, the objections came mostly from senior Congressional Democrats, who are angry at some of Mr. Obama’s concessions and at being excluded from the talks. The president worked to ease concerns from members of his party, inviting Democratic leaders to a nearly two-hour White House meeting on Thursday evening.

Mr. Obama and Mr. Boehner had maintained tight secrecy to prevent a recurrence of the rebellion that stymied their effort earlier this month. With only a few top advisers involved, the news that they were nearing an accord broke after administration officials told Democratic Congressional leaders on Wednesday night about the outlines of talks earlier in the day between the president, Mr. Boehner and Representative Eric Cantor of Virginia, the No. 2 House Republican.

Congressional Democrats, who had pressed for a debt-reduction approach balanced between new tax revenue and spending cuts, expressed alarm at the emerging proposal and some vented their criticism at Mr. Obama’s budget director, Jacob J. Lew, during a heated party lunch of Senate Democrats on Thursday.

“The president always talked about balance: there had to be some fairness in this, this can’t be all cuts,” said Senator Harry Reid, the Senate majority leader, as he exited the meeting. “The caucus agrees with that. I hope the president agrees with that, and I’m confident he will.”

But the president and Mr. Boehner were moving ahead with their plan, aides said, trying to nail down questions like how much new revenue would be raised, how much would go to deficit reduction, how much to lower tax rates and how to enforce the requirement for new tax revenue from people with high incomes should Congress not succeed in overhauling the tax code in 2012.

Officials on all sides of the tense negotiations warned that no firm deal to raise the nation’s $14.3 trillion borrowing ceiling was in hand, and tried to play down progress — if only to stave off attempts to block it or to change its shape by hard-liners on both sides of the debate on taxes and spending.

“While we are keeping the lines of communication open, there is no ‘deal’ and no progress to report,” said Kevin Smith, a spokesman for Mr. Boehner.

The White House also denied that any agreement was imminent. Jay Carney, the White House press secretary, said: “There is no deal. We are not close to a deal.”

The same issues that foiled earlier negotiations between Mr. Obama and Mr. Boehner remain. Many Republicans oppose abandoning the party’s no-compromise stand against any new taxes, while many Democrats fear a “grand bargain” will undercut their party’s ability in the 2012 campaigns to use Republicans’ support of deep cuts in Medicare, Medicaid and Social Security against them.

Congressional Democrats already are suggesting that the potential Obama-Boehner deal is more tilted toward Republican priorities than a comprehensive bipartisan plan suggested this week by the so-called Gang of Six senators, three Republicans and three Democrats.

House Republicans, too, expressed some wariness. While initial reports suggested the emerging plan would appear to meet Republican demands for less reliance on new revenue than Democrats had insisted on, Republicans could be uneasy about accepting a deal tied to higher future revenue through tax changes.

“The trick on this has always been the tax issue,” one Republican said.

Alternative solutions in Congress appeared to be faltering as the Senate on Thursday took up and prepared to reject on Friday a conservative House Republican plan to slash spending by $5.5 trillion, deeper cuts than anything proposed before.

A backup plan being prepared in the Senate by Mr. Reid and his Republican counterpart, Mitch McConnell, the minority leader, was meeting stiff resistance from the House. That plan would allow a debt ceiling increase without the approval of Congress, in effect, but also without the guarantees of deep spending cuts that Republicans wanted in tandem.

Mr. Reid and Mr. McConnell summoned the Gang of Six — rather, the Gang of Eight with the addition of Senator Michael Bennet of Colorado, a Democrat, and Senator Mike Johanns, Republican of Nebraska — to a meeting on Thursday. Both party leaders were unhappy with the group’s re-emergence this week, and with Mr. Obama’s immediate warm words for the group, because it complicated their own efforts to reach a solution to the debt-limit impasse.

As Mr. Boehner called for some action to avert a default, he said Thursday that he was confident that many in the conservative House majority would ultimately be willing to accept some compromise.

“At the end of the day, we have a responsibility to act,” Mr. Boehner told reporters. But he also made clear that he was not inclined to take any steps that could be considered a tax increase.

“I’ve never voted to raise taxes,” he said, “and I don’t intend to.”

As the capital markets continued to assess the possibility of American default on its debt, R. Bruce Josten, the executive vice president for government affairs of the United States Chamber of Commerce, wrote a blog post warning that such a potential default “has real, immediate, and potentially catastrophic consequences.”

Warning of the possibility of heightened interest rates, and blaming no party, Mr. Josten wrote: “Now, make no mistake; too much spending and the need for real entitlement reform has led to the debt crisis we’re in today. But jeopardizing our country’s credit rating and fiscal security by refusing to compromise isn’t the answer.”

Jennifer Steinhauer contributed reporting.

There are conflicting reports about this actually with both the Speaker and the President's spokesmen denying it.

[Pelranius]

Might have been a trial balloon for public consumption, so the public doesn't get too nervous (or so goes the inside Beltway reasoning).

[Dartzap]

Don't they need to get something sorted within the next day so it can actually be passed by the 2nd? I wasn't aware doing things by the skin of your teeth was an accepted policy motivator

[GrandMasterTerwynn]

Don't they need to get something sorted within the next day so it can actually be passed by the 2nd? I wasn't aware doing things by the skin of your teeth was an accepted policy motivator :P

Yeah, they need to get something sorted, like getting off square one, for example . . .

Budget talks fail, again

Both Sides Point Finger As Debt Talks Falter

House Speaker John Boehner abruptly broke off talks with President Obama Friday night on a deal to make major cuts in federal spending and avert a threatened government default, sending already uncertain compromise efforts into instant crisis.

Within minutes, an obviously peeved Obama virtually ordered congressional leaders to the White House Saturday morning for fresh negotiations on raising the nation's debt limit. "We've got to get it done. It is not an option not to do it," he declared.

"President Obama is this perpetually cool guy. I don't think I have ever seen him as fuming as he was in this news conference," NPR's Ari Shapiro told All Things Considered co-host Michele Norris.

For the first time since talks began, Obama declined to offer assurances, when asked, that default would be avoided. Moments later, however, he said he was confident of that outcome.

At a rebuttal news conference of his own a short while later in the Capitol, Boehner said, "I want to be entirely clear, no one wants default on the full faith and credit of the United States government, and I'm convinced that we will not."

The two men offered sharply different accounts of the compromise efforts so far and who was at fault for the collapse.

"I've been left at the altar now a couple of times," Obama said wryly.

"It's the president who walked away from his agreement," Boehner contended.

Boehner said he spent Friday morning talking to other congressional leaders as well as rank-and-file lawmakers about the proposed deal.

"I think that statement that he spent the morning talking with members is important because Boehner is an old-school Republican who has been a deal-maker for years and years and years," Shapiro said.

"But to get this through the House he has to get the approval of at least some of these freshmen Tea Party-backed Republicans, many of whom are simply are not willing to budget on the issue of tax revenues," Shapiro said. "And it does the House speaker no good to agree to a deal that he doesn't have the other Republicans in the House supporting."

The speaker said Obama wanted higher taxes and not enough spending cuts.

The president countered that he had offered an "extraordinarily fair deal" that totaled $2.6 trillion in spending cuts and $1.2 trillion in additional revenue.

A key House Democrat laid the blame squarely on the GOP.

"We need to come up with a balanced approach to reducing the deficit," Rep. Chris Van Hollen of Maryland, the top Democrat of the House Budget Committee, told NPR's Norris. "It's unfortunate that these talks apparently collapsed because Republicans once again refuse to have that shared responsibility."

Strikingly, the two sides had agreed on two highly controversial changes, according to aides on both sides of the talks. One would raise the age of eligibility of Medicare gradually from 65 to 67 for future beneficiaries, while the other would slow the increase in cost-of-living raises in Social Security checks.

Given that accord, it seemed likely those agreements would be among many carrying over to the broader meeting Saturday morning and beyond.

Barring action by Congress by an Aug. 2 deadline, the Treasury will be unable to pay all its bills. Officials say a default could destabilize the already weakened U.S. economy and send major ripple effects across the globe.

Even by the recent standards of divided government, Boehner's decision triggered an extraordinary evening in which first the Democratic president and then the Republican speaker maneuvered for political position on an issue of enormous national import.

Unspoken, yet unmistakable in all the brinkmanship was the 2012 election campaign, still 18 months away, with the White House and both houses of Congress at stake.

In a letter circulated earlier to the House Republican rank and file, Boehner said he had withdrawn from the talks because the president wanted to raise taxes and was reluctant to agree to cuts in benefit programs.

The disconnect was "not because of different personalities but because of different visions for our country," he said, and he announced he would now seek agreement with the Democratic-controlled Senate.

Obama Calls Saturday Meeting

Obama was having none of that, announcing instead a morning White House meeting where he said he expected to hear proposed solutions from the top leaders of both parties in both houses.

"One of the questions the Republican Party is going to have to ask itself is, `Can they say yes to anything?"' Obama said.

The president avoided direct criticism of Boehner, although he did mention that his phone calls to the speaker had gone unreturned during the day. Administration officials said the president had tried to reach Boehner twice over two days. Asked about the spurned calls, Boehner said he didn't think his relationship with Obama had been "irreparably damaged."

He said he would attend the Saturday meeting at the White House.

Private, sometimes-secret negotiations had veered uncertainly for weeks, generating reports as late as Thursday that the two sides were possibly closing in on an agreement to cut $3 trillion in spending and add as much as $1 trillion in possible revenue while increasing the government's borrowing authority of $2.4 trillion.

That triggered a revolt among Democrats who expressed fears the president was giving away too much in terms of cuts to Medicare and Social Security while getting too little by way of additional revenues

Further Economic Damage Feared

"Failing to raise the debt ceiling would do irreparable harm to our credit standing, would undermine our ability to lead on global economic issues and would damage our economy," former Treasury Secretary Henry Paulson, a Republican, told reporters during the day.

Current administration officials and Federal reserve Chairman Ben Bernanke have said much the same thing for weeks — while gridlock persisted in Congress.

Obama said his only requirement for an agreement was legislation that provides the Treasury enough borrowing authority to tide the government over through the 2012 election.

Senate Majority Leader Harry Reid, D-Nev., agreed in a written statement, saying a shorter-term extension was unacceptable.

His counterpart, Senate Republican Leader Mitch McConnell supported Boehner for "insisting on reducing spending and opposing the president's call for higher taxes on American families and job creators."

Not for the first time, he said, "it's time now for the debate to move out of a room in the White House and onto the House and Senate floors."

The two Senate leaders will be among the lawmakers at the White House meeting called by the president, presumably joined by Boehner and Rep. Nancy Pelosi, the House Democratic leader.

At the same time Obama and Boehner sought to define the clash to their political advantage, their aides provided details of the abortive talks.

Republican aides said Obama has upped his demand for higher taxes during the week, in the wake of a proposal by the bipartisan "Gang of Six" in the Senate. The group called for an overhaul of the tax code that would increase revenue by $1.2 trillion over a decade.

Additionally, the aides said the two sides were not able to bridge their differences over the triggers designed to force Congress to enact both tax reform and cuts to Medicare and other benefit programs by early next year.

Yet aides on both sides said the negotiations had yielded agreement for cuts of $250 billion from Medicare. Obama said Medicare, Medicaid and Social Security combined would have accounted for $650 billion.

An additional $1 trillion or slightly more would come from hundreds or thousands of government programs that are funded annually. Assumed savings from the end of the wars in Iraq and Afghanistan totaled another $1 trillion.

[Highlord Laan]

Will somebody please hit Boner with a bus already? Everybody with two brain cells to rub together knows full dammed well it's the reich wing standing in the way of getting this done in the name of protecting their corporate donors.

[The Romulan Republic]

Will somebody please hit Boner with a bus already? Everybody with two brain cells to rub together knows full dammed well it's the reich wing standing in the way of getting this done in the name of protecting their corporate donors.

You might want to rephrase that first sentence, as it could be interpreted as inciting violence against the Speaker of the House.

Anger is understandable (I'm pretty fucking pissed by this myself), but that kind of rhetoric, even as a joke, isn't going to do anything good for America or the political process. There's also the whole "not wanting to sink to the level of your enemies" thing.

Edit: But Jesus Christ this shit is outrageous.

[MarshalPurnell]

To be fair, I rather suspect the corporate paymasters of the GOP dread the consequences of an actual default, or even the results of a (now probably inevitable) credit downgrade. The problem is the crop of extreme conservatives that came up in 2010, who are economic illiterates guided only by empty phrases and fervent belief. They are genuinely stupid enough to let America crash and burn in the name of ideological purity, because they can't see how their actions will lead to disaster until it's too late. And then they'll blame liberals for it.

[Lord Zentei]

You may rest assured that Wall Street does NOT want a default. This is almost certainly the nutcase ideologue wing of the Republican Party, a.k.a. the Tea Party. The usual GOP guys (i.e. the corporate stooges) are mercenary, but they're rational enough to realize where their own financial interests lie, as well as the financial interests of their real constituents. But they've painted themselves into the political corner.

An opinion piece in the NYT opines that Obama should raise the debt ceiling unilaterally. That looks increasingly attractive.

PRESIDENT OBAMA should announce that he will raise the debt ceiling unilaterally if he cannot reach a deal with Congress. Constitutionally, he would be on solid ground. Politically, he can’t lose. The public wants a deal. The threat to act unilaterally will only strengthen his bargaining power if Republicans don’t want to be frozen out; if they defy him, the public will throw their support to the president. Either way, Republicans look like the obstructionists and will pay a price.

Where would Mr. Obama get his constitutional authority to raise the debt ceiling?

Our argument is not based on some obscure provision of the 14th amendment, but on the necessities of state, and on the president’s role as the ultimate guardian of the constitutional order, charged with taking care that the laws be faithfully executed.

When Abraham Lincoln suspended habeas corpus during the Civil War, he said that it was necessary to violate one law, lest all the laws but one fall into ruin. So too here: the president may need to violate the debt ceiling to prevent a catastrophe — whether a default on the debt or an enormous reduction in federal spending, which would throw the country back into recession.

A deadlocked Congress has become incapable of acting consistently; it commits to entitlements it will not reduce, appropriates funds it does not have, borrows money it cannot repay and then imposes a debt ceiling it will not raise. One of those things must give; in reality, that means that the conflicting laws will have to be reconciled by the only actor who combines the power to act with a willingness to shoulder responsibility — the president.

Franklin D. Roosevelt saw this problem clearly, and in his first inaugural address in 1933, addressing his plans to confront the economic crisis, he hinted darkly that “it is to be hoped that the normal balance of executive and legislative authority may be wholly equal, wholly adequate to meet the unprecedented task before us.”

“But it may be,” he continued, “that an unprecedented demand and need for undelayed action may call for temporary departure from that normal balance of public procedure.” In the event, Congress gave him the authorities he sought, and he did not follow through on this threat.

The basic problem today is that the president and the House Republicans are locked in a classic bargaining game. The worst outcome for both is default on the debt, but each side holds out for a favorable deal. They will certainly go to the wire, but economists who have studied bargaining games have shown that there is always a real possibility of breakdown rather than compromise, because only by refusing to deal can each side convey the seriousness of its position. That is why labor strikes occur even though workers and managers do jointly better if they make a deal. Failure to raise the debt ceiling, however, is not akin to any old plant shutdown: it would be catastrophic.

A proposal has been floated by Senator Mitch McConnell of Kentucky, the Republican minority leader, under which Congress would delegate to the president the power to raise the debt ceiling, subject to some minor procedural constraints. Mr. McConnell’s ploy is suspect, because it assumes away the problem that it attempts to solve: the internal paralysis of Congress. Congress probably cannot act on its own — for example, by creating a veto-proof budget — because it is internally deadlocked. Not only do Democrats and Republicans disagree, but so do the Republican leaders, who want to avoid a debt default, and the Tea Party-inspired Republican back-benchers, who appear to believe that only a purifying Götterdämmerung can put public finances back in order. The latest proposed deal negotiated by House Speaker John A. Boehner and President Obama is vulnerable to the same problem.

Discussions of an earlier proposal to rely on the 14th Amendment for the President’s authority to raise the debt level centered on whether the debt issued after the president’s action would be under a cloud. Commentators pointed out that the language in the 14th Amendment, which commands that the validity of legally authorized public debt shall not be questioned, does not explicitly authorize the president to do anything. But debt under a cloud is better than default. It would be better if the parties made a deal, but if they don’t, default is the worst outcome.

The 14th Amendment is a red herring, however; even if its debt provision did not exist, the president would derive authority from his paramount duty to ward off serious threats to the constitutional and economic system.

Mr. Obama needs to make clear that he will act unilaterally to raise the debt ceiling if Congress does not cooperate; if he does so, then we predict that Congress will cooperate by enacting the McConnell plan or a similar fig leaf, and so Mr. Obama will not need to follow through on his threat, and the constitutional crisis will pass — just as it did with Roosevelt. Republicans will be publicly outraged, but privately relieved. They do not want an economic catastrophe; they can avoid violating their no-taxes pledge; and they retain the power to fight the budget battle another day. As for the president, he really has no other choice.

[The Romulan Republic]

That seems to basically say "the President should have/has the authority to be a dictator in a time of crisis", which is not a good attitude in a democracy. The President's power has expanded a lot lately- more unilateral use of executive power is not appealing. And wouldn't the Republicans just love to paint Obama as a dictator abusing his powers if he does this? Also, I don't like the words "constitutional crisis".

But then, when the alternative is looking more and more certain to be default, I can see why some people might want this. God knows we don't need a Default (and the depression/shut-down of essential services that would likely follow).

Fucked if you do, fucked if you don't.

[Zaune]

You may rest assured that Wall Street does NOT want a default. This is almost certainly the nutcase ideologue wing of the Republican Party, a.k.a. the Tea Party. The usual GOP guys (i.e. the corporate stooges) are mercenary, but they're rational enough to realize where their own financial interests lie, as well as the financial interests of their real constituents. But they've painted themselves into the political corner.

An opinion piece in the NYT opines that Obama should raise the debt ceiling unilaterally. That looks increasingly attractive.

But how will said nutcase ideologue wing react to that? These are after all the people who paint Obama as a Stalinesque autocrat, and make veiled threats like Sarah Palin's notorious "don't retreat, reload!" tweet. I daresay it's all hot air of course, and even if it isn't then they couldn't hope to do more damage than a default will, but it's still something to factor in.

[mingo]

Much as the Tea Party nutjobs think they are winning, I don't see anything but lose-lose for the GOP. They cut Medicare and social security and lose the elder vote, crash the whole economy and lose everybody, give in and lose the tea party. I don't see a win here at all, maybe even a party killer.

[The Romulan Republic]

No doubt Fox will be working overtime to convince the public that if a Default occurs, its because evil, dictatorial Obama wouldn't compromise on his socialist agenda. Fucking shitholes.

Edit: Don't know if people will buy it though. I'd like to think not.

[Lord Zentei]

Frankly, I think the tea party will accuse Obama of whatever, regardless of what he does. If he unilaterally raises the debt ceiling, then they accuse him of abusing his power, if he doesn't do anything and the result is a default, then they blame him for the default. The thing is, they're accusing him of abusing his power anyway.

[Flagg]

I don't think I've ever seen Obama this pissed off before. Frankly, I'd like to see it more often.

[The Romulan Republic]

Frankly, I think the tea party will accuse Obama of whatever, regardless of what he does. If he unilaterally raises the debt ceiling, then they accuse him of abusing his power, if he doesn't do anything and the result is a default, then they blame him for the default. The thing is, they're accusing him of abusing his power anyway.

True enough, sadly.

[Eframepilot]

No doubt Fox will be working overtime to convince the public that if a Default occurs, its because evil, dictatorial Obama wouldn't compromise on his socialist agenda. Fucking shitholes.

Edit: Don't know if people will buy it though. I'd like to think not.

If the right could lie that effectively and convince a majority, the Democrats would never have won a single election since 2000.

[K. A. Pital]

I'd have a laugh if in a few days this thread gets renamed to "American Default Ahoy".

[aieeegrunt]

Now now, you're better than that.

I think that Obama may have finally found his balls.

[Mr Bean]

Now now, you're better than that.

I think that Obama may have finally found his balls.

No, the Tea Party Republicans are just insane and or ignorant of economics. Keep in mind Obama was willing to hand them two billion dollars in cuts for in essence nothing and by the way the debt ceiling was going to get raised when they walked away from that deal then went to to three with a whittle bit of closing loopholes and they walked away from that. The closer we get to the August deadline the more the markets are going to freak and the more the moneyed interests who make up the real core of the Republican base are going to start panicking if it looks like House Tea Party Republicans won't not blink but won't even deal and there are not enough Republicans to make up the difference. Come the August dealine I'm guessing Obama is going the Constitution route but he will in the end still give them three trillion dollars in cuts for nothing.

I do so predict.

[The Romulan Republic]

Why would he? If he did end up with "the Constitution route" (which as I understand it is unilaterally raising the debt cealing), why would he have to give them anything?

You know, its one thing to complain about Obama compromising. Its another to argue that he will fold completely when their is no real reason for doing so. What, you think he likes surrendering to Teabaggers just for fun?

Now, maybe there's some nuance of American politics I'm missing here, so please explain your reasoning beyond "I don't like Obama".

[TimothyC]

Now, maybe there's some nuance of American politics I'm missing here, so please explain your reasoning beyond "I don't like Obama".

Because he has no demonstrable spine?

The republicans at this point probably think that they will be able to get everything they want out of him, and only a handful of non-tea party republicans will have to vote for it in the house because the President will get the democrats behind it, similar to what happened with health care. In short, the republicans are using past performance to predict future results, and I can't say I blame them for that - I do however blame them for being idiots.

For the record - I didn't vote for the President, but I didn't vote for my current representative either.

[aerius]

You know, its one thing to complain about Obama compromising. Its another to argue that he will fold completely when their is no real reason for doing so. What, you think he likes surrendering to Teabaggers just for fun?

Now, maybe there's some nuance of American politics I'm missing here, so please explain your reasoning beyond "I don't like Obama".

Obama has folded over and grabbed his ankles on every major issue I can think of, it's hard for me to see him growing a spine anytime soon. I could happen, but frankly I'd place better odds on convincing my sister inlaw to sleep with me.

Getting back on topic, it's $3 trillion in deficit reductions over 10 years, which sounds nice, until you remember that the US is going $3 trillion in the hole every 2 years. Plus it doesn't do anything to fix the root of the problems. If you go back to this nice NYT budget puzzle, you'll see that the big savings are in Social Security, Healthcare, and Tax code reform. But no one really wants to touch those things for various reasons, or if they do it's to move them in the wrong direction.

The ratings agencies are saying they're going to downgrade America's AAA rating unless they come up with a plan to fix the structural issues in the budget & economy of the country. I don't think the plans being floated around meet that target. So even if they pass the current plan and raise the debt limit, the US gets its debt downgraded if the ratings agencies aren't bluffing. I bet the markets will just love that one.

[The Romulan Republic]

I see you both ignored my first sentence.

My question is, if he raises the debt ceiling single-handedly on his own authority, why would he give the Teabaggers anything? Its not like he'd need to buy their support at that point.

[Julhelm]

So what will realistically happen if they fail to resolve the problem by the August deadline?

[JME2]

To be fair, I rather suspect the corporate paymasters of the GOP dread the consequences of an actual default, or even the results of a (now probably inevitable) credit downgrade. The problem is the crop of extreme conservatives that came up in 2010, who are economic illiterates guided only by empty phrases and fervent belief. They are genuinely stupid enough to let America crash and burn in the name of ideological purity, because they can't see how their actions will lead to disaster until it's too late. And then they'll blame liberals for it.

And under normal circumstances, I'd gloat and observe it's their own damm fault for courting these fuckers -- except now we're all at risk because of their stupidity.