Mitch McConnell Has Seen the Enemy, and It Isn't Democrats
Sen. Mitch McConnell's solution to the impasse over the debt ceiling represents: (a) Republican capitulation to President Obama; (b) a face-saving ploy allowing GOP lawmakers to avoid tax increases while averting economic catastrophe; (c) a reasonable escape hatch from the fight over deficit reduction?
Oops, I forgot (d) All of the above, which is probably closest to the truth. The Kentucky legislator unquestionably blinked in proposing to let Obama gradually raise the government's borrowing limit on condition that he vow to make spending cuts. Hard-line Republicans, some of whom bizarrely think the danger of failing to raise the debt ceiling is a hoax, predictably want to snuff out the plan. A few typical responses:
- "That dog don't hunt," said Rep. Allen West, a freshman Republican from Florida. "Seems like an acquiescence to me."
- "I will not vote to increase the national debt until we have a budget and we can tell the general public where their tax dollars are going to go," said Rep. Austin Scott of Georgia, president of the influential freshman class of House Republicans.
- "Nothing can get through the House right now," [Rep. Eric Cantor, R-Va.] said. "Nothing."
Once upon a time, of course, "blinking" was known as offering to compromise. If that's the idea, good for McConnell. What's interesting is that it is Republican intransigence, not Democratic unity, that forced him into conceding ground over the debt limit.
As the New Republic's Jon Cohn notes, House Speaker John Boehner and other Republican leaders long ago lost control of their caucus. What once seemed like a transparent bluff -- a threat not to lift the debt ceiling -- has in recent months morphed into a real, if self-annihilating, threat. Perhaps McConnell finally peered into the void and saw only doom when voters appropriately blamed Republicans for the inevitable carnage.
Or it could be that McConnell fears the wrath of the business community more than the ire of Tea Partiers. As I've written before, corporations are terrified of a U.S. debt default, or anything that smacks of one. Here's what a slew of corporate leaders had to say this week on behalf of the U.S. Chamber of Commerce in a letter to Obama and to Congress:
First, it is critical that the US government not default in any way on its fiscal obligations. A great nation -- like a great company -- has to be relied upon to pay its debts when they become due. This is a Main Street not Wall Street issue. Treasury securities influence the cost of financing not just for companies but more importantly for mortgages, auto loans, credit cards and student debt. A default would risk both disarray in those markets and a host of unintended consequences.And when the smoke clears?
Of course, if House conservatives reject the McConnell option, so may Obama and other leading Democrats. Obama's move to outflank Republicans on deficit-reduction has cleverly exploited fault lines within the GOP. Politically, going "big" on spending cuts has worked. For Boehner and McConnell, brinksmanship over the deficit increasingly looks like a damage-limitation exercise -- a question of how to dodge economic Armageddon without alienating their electoral base. Enjoy, fellas.
Nectar for the White House. . . if only there weren't an economy to cure. Even if Obama outmaneuvers Republicans on the debt ceiling, a deal leaves the debate more or less where it was before the congressional high jinks began. Lest we forget, that involves stuffing a giant austerity sandwich down the economy's throat. If we're wise, most of those cuts will be structured to take effect several years down the road, when growth has (let us pray) rebounded at last.
If not, all this mishigas over the debt ceiling will amount to nothing more than a prelude to a far more serious problem.
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