The financial industry is desperate to hear congressional Republicans assure the world that they’ll do the right thing and raise the debt ceiling. Indeed, Wall Street wants to hear this sooner rather than later.
But House Speaker John Boehner (R-Ohio) is less concerned about responsible policymaking and the nation’s best interests, and more concerned with playing a very dangerous game of chicken. The Speaker who was, just a few months ago, sensible and mature when it came to the debt ceiling, has been replaced with this guy.
In his most specific statement to date on what Republicans will demand in the debt ceiling fight, Mr. Boehner told the Economic Club of New York that the level of spending reductions should exceed the amount of the increase in borrowing power.
“Without significant spending cuts and changes to the way we spend the American people’s money, there will be no debt limit increase,” Mr. Boehner told members of New York’s business and finance community. “And cuts should be greater than the accompanying increase in debt authority the president is given.” Mr. Boehner said those cuts should be in the trillions of dollars, not billions.
In more precise figures, the Speaker now expects Democrats agree to more than $2 trillion in cuts, without raising taxes on anyone by any amount. If Dems balk, Boehner and his party will deliberately destroy the economy — or, as part of the hostage strategy, that’s at least what the Speaker wants Democrats to believe.
Boehner added that, while failure on this issue could prove catastrophic, he believes a clean debt-ceiling bill would be worse for the economy. It’s an argument so preposterous, it’s enough to make me wonder if the Speaker has suffered some kind of head trauma recently.
It’s worth noting that the Speaker’s ransom note now has a price tag — albeit, an unrealistic price tag — but no additional details. Boehner doesn’t know where the $2 trillion in cuts should come from or over what kind of timeframe. He just knows that he’s picked an arbitrary number and expects Democrats to figure out a way to meet his demands.
The ambiguity is not an accident, and it’s not just the result of a lazy House Speaker who isn’t proficient enough with policy details to do the work himself. Rather, Boehner can’t get more specific without committing to massive reductions in Medicare and Social Security — there’s almost certainly no other way to find those kinds of savings, given the Speaker’s parameters — which he doesn’t want to put on paper.
Boehner prefers to present the radical target and demand that Democrats scramble to meet it. All the while, he’ll hold the proverbial hostage at gunpoint.
Given recent history, we know how this game is supposed to work. GOP leaders will start negotiations with an outlandish demand, with the hopes that a “compromise” will still be to their liking. The difference in this case is that the White House and congressional Dems know what Boehner knows — he can’t shoot the hostage without destroying the economy on purpose.
If the Speaker has even a modicum of patriotism — if, in other words, he actually cares about the health of the nation — he can’t pull the trigger. This should, in theory, undermine Republicans’ leverage, unless the GOP really has gone stark raving mad.