There’s a fascinating dynamic going on in fiscal politics right now, all of it within the Republican Party. On the one hand, congressional Republicans are “backloading” all their demands onto the next debt limit negotiations rather than the “regular order” budget resolution negotiations they’ve been supposedly wanting for four years. On the other hand, they’ve cried wolf too many times on the debt limit, and their leaders have made it plain they won’t trigger a debt default to get their way.
WaPo’s Greg Sargent nicely sums up where the GOPers have arrived:
What all of this ultimately comes down to is that GOP leaders don’t have any endgame here. They don’t know how to get House Tea Partyers to agree to any constructive way out of this mess. They can’t get them to agree to a deficit reduction deal that includes new revenues. They can’t get them to agree to raise the debt ceiling without securing concessions from Dems that Dems are not willing to give up – but they also know that failure to raise it, and flirting with economic Armageddon, will be politically disastrous for the party.
It seems the initial strategem was to make the hostage for a debt limit increase something Democrats could probably live with if they had to: some sort of “framework” for “tax reform” that wouldn’t involve any major substantive precommitments. But conservative activists are already rejecting that idea. The scenario Republican leaders presumably don’t want is to drift along towards the debt limit with conservatives whipping up “the base” in expectations of big Democratic concessions or even an actual default–only to fall back at the last minute as business leaders warn them away from brinkmanship.
At some point conservative opinion-leaders may start arguing that Republicans should just kick the can all the way down the road and make deficits-and-debt a 2014 campaign issue rather than a daily struggle in Congress. The one thing that’s reasonably clear is that GOPers are about out of bluffs, and will be called on them from both the Left and the Right.