I’m torn on this one. By any objective measure, the deal is really, really bad public policy. And the one thing that really scares me about failing to reach a deal — defaulting on Treasuries, which would be beyond catastrophic — has been taken off the table by the Treasury, which said that it will prioritize interest payments.

The relevant question in this situation, however, is whether a revolt by House Democrats could move the bill to the left. I think it could, but it unfortunately depends on what the Tea Party freshmen do. The way I see it, the only way the deal moves to the left is if it fails in the House because of a significant Tea Party revolt.

If Boehner loses so many Tea Partiers that he can’t possibly expect to win them back, then his only option will be to pass a bill with the Dems. If that happens, then the Dems could — and should — extract significant concessions from Boehner in exchange for their support. And I think Boehner would absolutely be open to making significant concessions. When Boehner was whipping for his bill last week, he was telling Tea Party freshmen that if his bill failed, then he was going to introduce a clean debt limit bill and pass it with the Democrats and 30 moderate Republicans.

I still think Boehner can be forced into that position — but only if there’s absolutely no chance that he can win enough Tea Partiers to pass a bill with just Republicans. If the deal fails in the House because something like 5–7 Tea Partiers vote no, then Boehner can still probably pick off enough Tea Party holdouts to pass the bill on a second try. But if the deal fails and Boehner loses 20–30 Tea Partiers, then there are no changes that he could realistically make to win them back. His only option would be to pass a bill with the Dems and 30 moderate Republicans. (And yes, I think the Senate will pass whatever deal the House sends them. McConnell would pass a clean debt limit bill if he really had to.)

So at this point, I think House Dems should vote against the debt limit deal. If Boehner/Cantor/McCarthy have enough juice to pass the deal with just Republicans, then good for them. Make them own it though. I’m sure a few conservative House Dems (e.g., Shuler, Matheson) will vote for the deal, but hopefully Pelosi can hold the line with the rest of the caucus.

31 comments:

Tom Lindmark said...

Missed this post yesterday. Somewhat moot now I suppose but could you, when you have time, please elaborate on the reasons you consider it bad public policy.

Anonymous said...

Somebody needs to tell Obama that as president he has some power. I'm getting very tired of Mitch McConnell calling all the shots.

jdw said...

How is this post any different than the Dean Baker column you assailed two weeks previous?

You're basically saying here that you think a clean debt limit bill was possible to get with a little more brinksmanship, which I agree with you and Baker on. The question left unanswered in this post is why you think a clean debt bill is better than the agreement that passed.

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Actually, S&P was right. The United States has a worse debt to GDP ratio than Greece. S&P, if they were not worried about being harassed by every liberal, should have done years ago. We cannot go on spending. We also cannot put off cutting the budget for the "out" years. We have to do that now. What is wrong with paying off our debt. Yes, some will have to stop suckling from the government tit. Life is not fair.

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