Boehner prepares for a second debt ceiling showdown

House Speaker John Boehner is looking for a second chance.

In a talk at the Peter G. Petersen Foundation on Tuesday, Boehner said he intends to use the next debate over increasing the federal debt ceiling as yet another chance to get the spending cuts his caucus desires:

House Speaker John Boehner said Tuesday that any increase in the government’s borrowing limit must be accompanied by spending cuts and other budget savings of greater value, and he rejected tax increases as part of any deal to reduce the federal deficit.

Speaking at the Peter G. Peterson Fiscal Summit in Washington, D.C., Treasury Secretary Timothy Geithner said Congress needed to act smartly this time around on raising the debt ceiling.

Those positions signaled to the White House that congressional Republicans are prepared for fiscal brinkmanship at the end of the year, when Bush-era tax cuts are scheduled to expire, large automatic spending cuts are set to begin and the government reaches its $16.394 trillion borrowing limit.

“It is a line in the sand because Washington has kicked the can down the road, kicked the can down the road, kicked the can down the road, and the American people think we’re crazy…”

“Crazy” is being generous.

But we recall what happened last summer when the debt ceiling increase became one of those great DC spectacles, where a shutdown and possible government default loomed large over the scene. While I’ve nothing against government shutdowns (they do wonders for mall traffic in and around DC), the last round of debt ceiling brinksmanship ended in farce. It lead to the creation of the supercommittee, which was supposed to come up with an array of savings or, if it failed, a budget-wide sequester. The committee failed, the sequester became real and the political class has been scrambling ever since looking for ways to avoid the nasty cuts to this, that and the other program (nevermind that even these hysteria-inducing cuts would hardly dent overall federal spending).

Why should we expect a different outcome the second time around?

The presidential election. Or so some folks hope.

Except the debates will all likely occur during the lame duck session of Congress. Potentially, and hopefully, a great number of the current seat warmers will be spending their last days in power. With their elevation to private status imminent, it might be possible for them to cast aside their partisan chains and do what’s right for the nation’s long-term fiscal health.

Plus, if some estimates are to be believed, the federal government will reach its debt ceiling right after the election. Minds focused, party ties loosened, Congress and a presumably lame duck president will stop abusing cans on our roadways and reach a deal that makes everything better.

Or it all devolves into Greece-like chaos and at the last possible moment will result in a series of band-aids and promises wrapped around a short-term debt ceiling increase.

Rinse, repeat.

With all due respect to the Speaker, the only thing that will bring the two sides together is stern external discipline. Not from voters, but from the market. When the debt market decides our government’s paper isn’t worth its ink, and interest rates begin their relentless rise despite the Fed’s efforts, the political class — and us — will have no choice but to do what we’ve always known would have to be done one day, but kinda hoped wouldn’t: make the cuts, or raise the taxes, or both, that hurt.

That day is coming much sooner than anyone cares to admit.

  • Mike Barrett

    Boehner does not seem to have learned one thing. He wants to repeat a failed strategy with another attempt to do the same thing. Perhaps he is just plain tired of Cantor snipping at his heels, making it clear that if he does not do the bidding of the republoican study committee, he will be overthrown.

    The failure to abide by the deal they made just shows once again that republicans are not interested in real solutions that will strengthen our nation, but in political machinations that increase their own chances of returning to unfettered power. One need only look as far as the Legislature and Governor in Virginia to see what that looks like.

    Again, we all know what is required; real tax reform, increased revenue, reductions in programs, and reform of entitlement programs. Boehner knows that better than anyone, and he was close to a deal with the President on this very formula.

    But then, his caucus realized that this formula was good for America but bad for their electoral chances this November. So republicans have returned to more traditional themes; fear, derision, free markets, deregulation, shutting down government, and attacks. Anything will do if it disrupts our nation and makes the President look bad.

  • Jim Wilson

    Mike Obama doesn’t need any help looking bad.He’s doing that for himself.

  • It was wrong when Allen voted 4 times for an increase 6 yrs ago and it is wrong now. More debt means more power and greedy republicans just cant seem to wean themselves off of their addiction to more debt.

  • Eric McGrane

    Using the word “showdown” evokes images of a battle or struggle. When you say “second” showdown, it implies that there was a first.

    Would Boehner’s/Cantor’s performance on the first round indicate a “showdown”?

  • Anonymous

    Have not Boehner and the republican study committee in the House of Representatives learned that extreme enforced austerity, like that in the Ryan budget, is not only a prescription for recession, but worse, would increase our debt as the economy grinded to a halt?

    Anyone who thinks that austerity creates growth has been proven to be so wrong that it is astounding that any rational person would recommend such action in the face of mounting evidence to the contrary.

    Extreme spending cuts in a depressed economy just make things worse, not better. But apparently Boehner has failed to convince his caucus what just about everyone in America knows; we need growth and we need new more revenue so we can all get back to working at full productivity.

    The President and his team have managed this recovery as best they could with the tools available, and of course with all the extreme obstructionism that Boehner and minions could muster. If another shut down is in the cards, it will be on Boehner and his caucus.

  • Jim Wilson

    With the tools available wth ? Obama and the Democrats were in FULL control for two years and made things worse.Thats why Obama doesn’t want to talk about Stimulus, Obamacare, cash for clunkers,etc.

  • Mike Barrett

    So Jim Wilson, I assume you would suggest that even though it took President Bush and his team eight years to put us into the Great Recession, his successor should only have two years to get us out?

  • SWilliams

    Wasn’t one GOPTeaparty downgrade enough? Because using the threat of default as leverage to force Dems to agree to deep cuts to aid programs worked well the first go round.

    >> “and the political class has been scrambling ever since looking for ways to avoid the nasty cuts to this, that and the other program ”

    Where “political class” is defined as “the GOP”. Man up Orange Julius.

  • Eric McGrane

    Its almost like reality is discussed here.


  • Tim J

    Mike, Obama spoon fed that “hope and change” to his cult followers and now you are making excuses for a little tummy ache as he is trying to “burp” you so you will eat some more for another four years. Unfortunately, the used diapers are being dumped on the rest of us, forcing us to live in a toxic landfill of failure and despair.

  • Mike Barrett

    Tim J, reality suggests that your post is simply a croc. Frankly, the recovery is gaining momentum, the stock market is much improved, job creation has picked up, GDP is increasing at a sustainable rate, the homebuilding industry is back in business, the war is winding down and we have flag officers who finally realize our military must stop fighting the cold war and retool for new threats, Main Street is creating jobs and economic opportunity, and there is a sense of opportunity returning to americans devastated by the sheer incompetence of the Bush Administration and its policies.

    Now we have Romney who would turn the clock back to the discredited policies from which we are just now recovering. Of course, Romney and the 1% never really felt the recession as they had the means to protect themselves. Perhaps they had table wine during the week, but still saved the good stuff for the weekends. How many cadillacs do we have, dear?

    I believe in capitalism, free enterprise, the minimum regulation necessary to ensure justice and fairness, and the partnership of the public and private sector to create the conditions for prosperity. I deplore the deterioration of our public infrastructure, the substitution of private wealth for the public interest, and the greed and corruption of those who think they created wealth all on their own.

    The President is a good man with our interests at his core. His integrity in the face of overt character assassination and covert inneundo spread on talk radio is astounding. He will lead the nation well for the next four years.

  • Tim J

    Thanks Mike for another diaper dump as our country is kidnapped by the creepy guy in the Whitehouse who is extorting us for ransom.

  • JayD

    Mike, I know it’s long, but here’s reportage on exactly what, how, and why the last budget deal went south.

    “Boehner does not seem to have learned one thing. He wants to repeat a failed strategy with another attempt to do the same thing.” – According to the NY Times (not right-leaning), Boehner got screwed by the president’s team; can’t say I blame him for not wanting a repeat of that.
    “The (republican) failure to abide by the deal they made.” – Not the way I read it and NYTimes describes it differently… Boehner bought the car based on it passing inspection and returned to find the car passed inspection PLUS the dealer tacked another $5 grand onto his price. Looks like Boehner had republican senators on board until the president’s team got greedy.
    “Even though it took President Bush and his team eight years to put us into the Great Recession.” – Sorry, that ‘dog don’t hunt’ anymore.

    No argument from me that indicators are looking up; I’ll take puny 2% growth over shrinking or no growth. But looming ahead is another Washington-induced slowdown if the tax cuts expire and spending cuts kick in at year’s end. Most forecasters predict IF that is allowed to happen it will shave 3.5% off of 2013 growth and undo all 2012 growth gains (plus extra).

    Curious … exactly HOW would Romney turn the clock back? Which one of his policies will put us in the ditch again?

  • Jim Wilson

    Mike Bush wasn’t in FULL control for 8 years.That is a Democrat lie.

  • Anonymous

    Actually JayD, the most relevant few sentences in the whole NYT story said…”And yet in the end, while both leaders had profound reservations about a grand bargain that would threaten their parties’ priorities, what’s undeniable, despite all the furious efforts to peddle a different story, is that Obama managed to persuade his closest allies to sign off on what he wanted to do, and Boehner didn’t, or couldn’t.”

    In other words, the President was prepared to take the political risk and sign, but Boehner would not, or could not. Afterall, he had Cantor ready and willing to take him down. Frankly, the republican strategy and tactics have been to obstruct and disrupt, believing that favors their chances this November. We shall see.

  • JayD

    Anon, Interesting. You think the “most relevant few sentences in the whole NYT story” were the reporter’s conclusion? Well God bless your partisan soul! 🙂
    Same author also opines and reports the following facts:

    By mid-July, just as Boehner was preparing to invite Daley and Geithner up to the Hill, the (Gang of 6) … scheduled a briefing for senators only — no staff — on Tuesday morning in the Capitol.
    … no one was more surprised than the gang members themselves when almost half the Senate, roughly divided between the parties, trickled in as Warner and Chambliss outlined the new revenue and spending cuts in their emerging plan to cut $4.6 trillion from the budget. The first one to rise, after the presentation was finished, was Coburn. The unpredictable sixth man
    (Republican) gave an impassioned endorsement of the plan, telling his colleagues it wasn’t perfect, but it was the best they were going to accomplish. Then Durbin (Democrat) stood up and echoed the sentiment. One by one, senators from both parties added their support.
    More than 20 Republican senators, by some counts, had stood up in favor of a plan that would raise more revenue, and Obama thought he now had an opportunity to exert more pressure on House Republicans by highlighting the widening split inside their own party.
    (Let that one sink in for a moment.)
    White House aides would later insist that, despite their rough agreement on a framework the previous Sunday, the discussion about tax reform had always been fluid and unsettled, an ongoing negotiation in which both sides were still feeling out each other’s limits. The Gang of Six briefing (plus the President’s televised endorsement of the plan) had no doubt complicated this negotiation, they agreed, but it wasn’t as if they had signed on to something and then taken it back. If this is true, though, then it’s true only in the technical sense. If you shake hands with a guy on the price of a car, and you agree to talk again after the car has been inspected and the loan has been approved, you don’t really expect to show up and find out that car now costs $5,000 more. This is essentially what happened to Boehner. What both Tuesday’s panicky calls from the White House and the subsequent counteroffer make clear is that Obama knew he was changing the terms and felt he had no choice.

  • Tim J

    Then prompting an angry Boehner to make “the President is moving the goalposts” comment…

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