With the Republican debt-ceiling crisis lingering, and Congress inching ever-closer to next week’s deadline, it’s been an unpleasant week on Wall Street. The Dow Jones, for example, has lost about 300 points over the last three days.
Note the last line in this NYT excerpt:
Stocks were weighed down again on Wednesday by worries that the United States could default on its debt or see its credit rating cut as lawmakers in the world’s largest economy appeared no nearer to an agreement on raising the borrowing limit.
Though most investors think a last-minute deal to raise the debt limit will eventually emerge, the difficulty of reaching an agreement may leave a lasting impression on investor sentiment, some traders fear…. A worry in the markets is that only a short-term deal will be struck, with a promise to revisit the issue later. [emphasis added]
Just 24 hours ago, congressional Republicans said Democrats only want an extension through the end of next year for political reasons, and there’s no economic justification for this. Today we’re seeing that Wall Street — not exactly a reliable Democratic ally — is so afraid the GOP will get its way on this, it’s actually hurting market performance.
Also today, Sen. Bob Corker, a conservative Tennessee Republican, said the Boehner plan is on the wrong track on this specific point.
In particular, Corker warned that extending the debt ceiling for only six months, as Boehner has proposed, would still risk the nation’s credit rating, and leave lawmakers facing another ugly half a year.
“I know the president has been concerned, candidly, about a short-term extension,” Corker said. “In fairness, I think the business community around our country would be concerned about a long short-term extension.” […]
“To even set up a process that’s short of that doesn’t make any sense to me,” Corker said, referring to the size and duration of a deal. “It’s kind of like, you’ve got to be kidding me. We’ve got to go through the aggravation of the next six months working towards an aspirational goal that we all know doesn’t solve the credit rating issue.”
Dems want one extension, not two. Wall Street wants one extension, not two. The Republican line as recently as last month was one extension, not two, and as Corker helps demonstrate, some in the GOP still want one vote, not two.
Can Boehner and McConnell offer any kind of coherent defense for wanting to put us through this now and again six months from now? How on earth would that benefit anyone?