Republicans are accelerating toward another debt limit fight with President Obama, aware that the political and economic consequences of not raising it will be dire.
And so they’re deploying dual rhetorical strategies to sway the public and lock in a dynamic where the only way around the debt limit impasse is the one they’ve charted: describing a debt limit increase as a huge concession while downplaying the risk of breaching it.
During the negotiations over the fiscal cliff, and continuing through today, Republicans have attempted to falsely portray President Obama’s insistence that Congress increase the debt limit as a demand for unlimited power to spend money.
Now that the tax issues at stake in the fiscal cliff negotiations have been addressed, the GOP is once again contemplating not raising the debt limit. And just as they misleadingly describe the nature of borrowing authority, they’re now also suggesting that not raising the debt limit might not be such a bad thing.“We Republicans need to be willing to tolerate a temporary partial government shutdown -which is what that could mean,” said Sen. Pat Toomey (R-PA) on MSNBC Wednesday. “A temporary disruption because we have to furlough the workers at the Department of Education, or close down some national parks, or not cut the grass on the Mall, that’s not optimal, it’s disruptive, but it’s a hell of a lot better than the path that we’re on.”
In a Friday Houston Chronicle op-ed, Sen. John Cornyn (R-TX), a member of GOP leadership, used the same language.
“It may be necessary to partially shut down the government in order to secure the long-term fiscal well being of our country,” he wrote.
The goal is to present to both the public, and perhaps rank and file Republicans who don’t fully understand the nature of the debt limit threat, that the consequences would be fairly modest — to foster a climate in which raising the debt limit without legislative concessions from Democrats will be impossible.
But for two years now, experts — from academia to the Treasury Department to the Congressional Budget Office — have warned in plain terms that the actual consequences would be much worse: a recessionary drop in spending at best and a calamitous debt default at worse.
A government shutdown, like the ones Republicans precipitated in 1995, occurs when Congress fails or refuses to appropriate funds for government operations. Because the executive branch lacks the power to raise and spend money on its own, government functions cease until the political pressure builds on Congress to pass appropriations and then those operations resume.
Not raising the debt limit, by contrast, leaves the government far short of the money it needs to execute the spending Congress has told it to undertake. That would be unprecedented, and put the executive branch in legally uncharted territory: unable legally to borrow the money needed to pay all of its bills, but still required by law to pay them. It would impact services in a chaotic and unpredictable fashion, while removing tens of billions of dollars a month from the economy — many times the contractionary effect of the fiscal cliff’s sequestration provisions.
It’s likely that the government would eventually fail to service all of its debt, damaging U.S. credit and touching off a major financial catastrophe.
Toomey, along with Reps. Paul Ryan and Eric Cantor, played a similar role in 2011 debt limit fight, arguing that breaching the debt limit for a brief amount of time would be relatively harmless.
History’s repeating itself.
The dynamic is dangerous enough that pundits, experts, and members of the general public are pressing President Obama to take advantage of an absurd-sounding legal loophole that allows the Treasury Secretary to order the minting of platinum coins of any value and to use the funds available upon deposit of those coins to meet federal obligations.
The Obama administration has ruled out another outside-the-box option — the legally dubious idea of circumventing the debt limit statute by citing the 14th amendment — and is generally hesitant to approach the fight outside normal legislative channels.
But Democratic leaders are concerned enough about the GOP’s ability to raise the debt limit, that they’re asking the president to reconsider.
“I would do it in a second, but I’m not the President of the United States,” House Minority Leader Nancy Pelosi told reporters at her weekly press briefing on Friday, referring to invoking the 14th Amendment. “Sometimes, I think the Administration hears you more clearly when you say it publicly than when you say it privately.”