Boehner preps his plan

Yesterday morning, President Obama and Treasury Secretary Tim Geithner told congressional leaders the risk of a market panic, driven by the Republican debt-ceiling dispute, was a very real possibility. East Asia is 13 hours ahead of EST in the United States, and to prevent the first wave of the larger disaster, they said, policymakers should try to announce a viable way forward beforehand.

The good news is, House Speaker John Boehner (R-Ohio) seems to care about that timeframe.

House Republican lawmakers are set to participate in a conference call with GOP leaders at 4:30pm Sunday, according to a source notified of the second such meeting in as many days.

The source, who intends to dial into the telephone conference, anticipates hearing from House Speaker John Boehner (R-Ohio) of a deal reached by congressional leaders to raise the debt ceiling before the Aug. 2nd deadline.

The bad news is, Boehner doesn’t seem to care about handling this in a responsible way.

With Asian markets set to deliver a verdict within hours on the U.S. debt crisis, House Speaker John Boehner, R-Ohio, said on Sunday morning that he was prepared to advance a House debt-ceiling plan without Democratic support.

I’m stepping away from my desk, and won’t be immediately available to write about Boehner’s message to his caucus. I sincerely hope the whispers coming from Capitol Hill are mistaken and that GOP leaders intend to be reasonable this afternoon.

But at this point, the picture appears rather bleak.

Boehner seems likely to tell his caucus that he’ll push a two-step process, in which Congress will vote to raise the debt ceiling twice — once this week, accompanied by $1 trillion in cuts (and no new revenue), and again early next year, after additional talks on “reforming” taxes and entitlements. Democrats are willing to accept these terms, but want one vote on the debt ceiling, not two. (One vote would assure the private sector and global markets that default is off the table at least until at after November 2012, resolving uncertainty that the GOP pretends to care about.) Boehner intends to ignore the Democratic demand and create economic uncertainty on purpose.

From there, the Speaker hopes to have the House approve his measure sometime this week, daring the Democratic Senate to oppose it. The goal would be to transfer blame in the event of a crisis — Boehner would say Senate Dems didn’t pass his bill, and are therefore responsible for missing the Aug. 2 deadline.

This is, in other words, a game of chicken wrapped in another game of chicken. The Senate could try to pass the House bill but improve it, sending it back to the House, but given how long it will take to pass the Senate version, there almost certainly won’t be enough time for the back and forth.

President Obama has suggested he will veto any package that fails to extend the debt ceiling through next year. Boehner believes the president is bluffing, and if given a choice between failure and the bad House bill, Obama will have no choice but to sign the latter.

Of course, maybe we’ll get a very pleasant surprise after the 4:30 call between Boehner and his caucus. Since I won’t be at my desk, let’s call this an open thread to discuss developments as they come to light.