For the last few months, congressional Republicans have fallen into two broad categories when it comes to dealing with the debt ceiling. The first, which includes the GOP leadership in both chambers, believes the debt limit must be raised, and failure to do so would be catastrophic, but this should be nevertheless be held hostage until Democrats give Republicans stuff to make them happy.
The second includes rank-and-file Republicans who simply aren’t very bright, and who are convinced that concepts such as “default” and “full faith and credit” just aren’t a big deal.
This week, we’re starting to see a third group, which is something a hybrid of the first two. This contingent believes a congressionally-created debt crisis would, in fact, be a disaster, but doesn’t believe the deadline is actually the deadline.
Treasury Secretary Timothy Geithner has said if Congress doesn’t raise the $14.294 trillion debt limit by Aug. 2, the federal government won’t be able to pay all its bills, which would have a “catastrophic economic impact.”
But many conservatives, including some GOP freshman who campaigned in 2010 against raising the debt limit, say he is exaggerating the danger. […]
“When you say the drop-dead day is going to be August, I question that,” said Rep. Tom Rooney (R., Fla.). “I’ll believe it when I see it.”
A senior administration official told Politico, “These are the kinds of people who get eaten by bears.”
That’s a good line, but it’s more than just amusing. I can appreciate healthy skepticism as much as the next blogger, but guys like Rooney have to understand they’re playing with fire. When he says, “I’ll believe it when I see it,” when the right-wing congressman may not recognize is a simple truth — if he’s wrong, what he may “see” is 20% unemployment and a global recession.
In the meantime, as guys like Rooney press their (and our) luck, we draw closer to an economic calamity. As Ezra Klein recently explained, “The danger in this is that as the rhetoric ramps up, the market may not realize this is all just more of Washington’s fun and games. Brinksmanship runs the risk of misjudging what is the last minute, or the maximum amount of uncertainty, that the market will accept before it reevaluates the American government’s capacity to pay its debts back in a timely and smooth way.”
In the meantime, 62 leading U.S. business groups, including the American Gas Association, the Telecommunications Industry Association, and the National Association of Manufacturers, all pleaded with Congress this week to get this done quickly. “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,” the groups said. “It is critically important that the United States stands fully behind its legal obligations.”
Ordinarily, the “pro-business” Republican Party would take this seriously. For now, GOP leaders simply don’t care.