From time to time, I remarked that the summer had a 1914 feeling about it in the context of military action against Syria. It may turn out the feeling was still correct but I was looking in the wrong place.
The start of what turned out to be the Great War was not seen as a big deal at the time. Aristocratic young men signed up for combat, eager to taste a bit of battle, convinced the dust up would last only a month or two. But after the German advance, a long and devastating trench warfare set in, with both sides holding their lines for years at enormous cost in men and materiel.
In the US, despite all the media frenzy over the Federal shutdown, the attention of the insiders has already moved to the real cliffhanger: the debt ceiling impasse, which starts to bind on October 17. Treasury is already fulminating how putting the sanctity of payments on Treasury bonds in doubt is a seriously bad idea. We also have the curious spectacle of Grover Norquist making the rounds of Vichy Left outlets (see Ezra Klein and Huffington Post) to condition liberals as to where the political professionals see a budget deal shaking out. (You know we’ve past an event horizon when Norquist is playing Republican good cop). Congress passes a continuing resolution to buy a couple of months to negotiate the prize sought by both parties, the middle class shellacking Grand Bargain that “reforms”, as in erodes, Medicare and Social Security.
The wee problem here is that the two sides wanted that last year. Remember the 2011 budget fight? Obama and Boehner were trading big deficit cut numbers, with Obama at one point proposing deeper reductions than Boehner. But a deal never came together. Boehner could not deliver the House. Obama wanted some token tax increases on the rich and the Republicans would have none of it.
So what has happened since then? The Tea Partiers, in classic Mafia style, have lowered their bid as time goes on. They’ve added a delay to ObamaCare to their demands and appear unwilling to make other concessions.
In addition, Obama has been hoist on the petard of the sequester. He had hoped it would apply enough pressure to both his left flank and to the less doctrinaire Tea Party types to help him get his
have old people die faster safety net cuts through. But the sequester didn’t inflict enough pain. Now the shutdown has upped the ante. But even though polls show that most Americans oppose using the shutdown as a way to force changed to Obamacare, the flip side is that those polls may not be germane to the block of intransigent Republicans in the House. As Politico describes it:
The prevailing wisdom ahead of the government shutdown was that tea party lawmakers who agitated for it would fold within a few days, once they got an earful from angry constituents and felt the sting of bad headlines. House GOP leaders called it a “touch the stove” moment for the band of Republican rebels, when ideology would finally meet reality.
But there’s another reality that explains why that thinking may well be wrong, and the country could be in for a protracted standoff: Most of the Republicans digging in have no reason to fear voters will ever punish them for it.
The vast majority of GOP lawmakers are safely ensconced in districts that, based on the voter rolls, would never think of electing a Democrat. Their bigger worry is that someone even more conservative than they are — bankrolled by a cadre of uncompromising conservative groups — might challenge them in a primary.
The Tea Party is beginning to look like the Wahhabis, a fringe sect promoted by the House of Saud to help secure their position that wound up taking on a bit too much of a life of its own.
Of course, the more sober minded argue that there is really only one obstacle to getting the deficit/debt ceiling squabble on a less dangerous negotiating path: Boehner himself. There are enough votes in the House to get the “clean” continuing resolution that Obama insists on passed. As the Washington Post explains:
There are currently 19 House Republicans on the record in support of a “clean” continuing resolution, meaning one without any other extraneous measures — like the defunding or delaying of Obamcare — attached. Combine those nineteen with the 200 Democrats who would almost certainly vote as a bloc in support of such a clean CR and you get 219 votes — a majority of the House. The bill has already been passed by the Democratic-controlled Senate, so it would go to straight to President Obama who would sign it. Shutdown over. Easy.
Except one little thing, which is that the only way for that scenario to happen is for Boehner to allow a piece of legislation supported by roughly 7 percent of his conference to come to the House floor for a vote. And, doing that on something as high-profile as a government shutdown/Obamacare, would almost certainly signal either the symbolic (or maybe even practical) end of his speakership.
The article elaborates how Boehner has pushed through other measures which had only minority support among Republicans. Both Democratic and Republican leadership in Congress just suffered a visible defeat in the effort to authorize the use of force against Syria. But the further complication is that it’s not worth it for Boehner to spend his limited political capital on the shutdown but on the debt ceiling. From a different Washington Post story:
Republicans who support the speaker argue that if he is going to antagonize the conservatives in his caucus, it would make more sense to do so on the debt-ceiling debate rather than on the funding of the government.
As painful as the government shutdown may be to some, the Treasury Department’s ability to use special measures to manage the nation’s finances will run out Oct. 17, setting up a potential default on the $16.7 trillion debt that would wreak far more havoc on the global financial markets than the shuttering of federal agencies and national parks.
Within the increasingly right-leaning GOP caucus, Boehner might survive one big vote that relied heavily on Democratic support. But two important votes — on the government funding and the debt ceiling — with mostly Democratic backing would leave the already embattled speaker on political life support.
The result is that Boehner has thrown in with the most conservative Republican lawmakers. A few dozen of them have urged holding up the government funding legislation to extract concessions from Democrats on President Obama’s Affordable Care Act.
Boehner is signaling that he is prepared to deal on the debt ceiling. From the New York Times:
Speaker John A. Boehner has privately told Republican lawmakers anxious about fallout from the government shutdown that he would not allow a potentially more crippling federal default as the atmosphere on Capitol Hill turned increasingly tense on Thursday.
Mr. Boehner’s comments, recounted by multiple lawmakers, that he would use a combination of Republican and Democratic votes to increase the federal debt limit if necessary appeared aimed at reassuring his colleagues — and nervous financial markets — that he did not intend to let the economic crisis spiral further out of control.
They came even though he has so far refused to allow a vote on a Senate budget measure to end the shutdown that many believe could pass with bipartisan backing. They also reflect Mr. Boehner’s view that a default would have widespread and long-term economic consequences while the shutdown, though disruptive, had more limited impact.
Now given the stakes, no one wants the Armageddon of a voluntary debt default on their record. But even with Boehner getting that vote through, where does that leave the budget fight? Boehner is already looking like damaged goods. The positions of the two sides seem to be moving further apart. There might be room for face-saving compromises, like whacking Congressional staffers to appease the calls for changes to Obamacare, and some changes in corporate taxation that both sides can declare to be a victory (such as a lowering of corporate rates combined with closing loopholes; the Obama side can claim it results in a rise in effective rates when it won’t be till corporations have filed tax returns for a couple for years before the public learns whether they’ve ben able to find new ways to avoid payments).
And confirming the distance between the bargaining positions of the two sides, my DC sources said no negotiations were underway, not simply the absence of meetings, but also a lack of staff prep work. Another impediment to reaching agreement is a lack of a clear consensus among key constituencies. For instance, as much as Wall Street is eager to see Social Security whacked (less public support of old people will presumably mean more individuals will be forced to put even more into 401 (k)s and IRAs, and thus ultimately into their hands), they aren’t willing to have the economy or stock prices take too much of a hit to get there. We’re going to have two weeks of shutdown by the time we get to the scary October 17 date, and Boehner will presumably blink shortly before then. But that does not tell us how long before the shutdown is resolved. It isn’t clear how the Democrats and Republicans can come to an agreement on the budget even assuming they avoid a debt ceiling train wreck.
The next couple of months will prove to be interesting, and not necessarily in a good way. Stay tuned.