House Speaker John Boehner (R-OH) is once again insisting that Congress won’t raise the debt limit this winter absent dollar-for-dollar spending cuts.
The response from numerous White House officials amounts to calling Boehner’s bluff. We’re not going to replay last August again, they say, and we don’t think you’ll shoot the hostage — the politics, and the economic consequences are just too deadly.
Republicans insist they’re not bluffing. It’s not just about their desire to tie the debt limit to spending cuts, but that a debt limit can’t pass the House absent significant cuts — the votes won’t be there.“Wishful thinking isn’t a strategy — it’s just wishful thinking,” says a House GOP leadership aide, responding to White House officials, in a statement to TPM. “The votes aren’t there in the House to pass a ‘clean’ debt limit increase. Not last year, not now, not in the lame duck, not in 2013. It’s an incredibly unpopular thing to vote for — among Democrats and Republicans. The only way it will ever pass is if it’s coupled with spending cuts and reforms. If the White House doesn’t realize that, they are living in La-La Land, and they are risking an economically disastrous default.”
Breaking this down further, there’s not really a binary choice between a “clean” debt limit increase, and one that’s paired with dollar-for-dollar cuts. White House officials say the president would happily sign a significant, but balanced, deficit reduction plan, big enough to make raising the debt limit a formality. Separately, it’s plausible that Obama would sign a big debt limit increase that included modest cuts or reforms. But unless Republicans either yield on tax increases or soften their debt limit requirement — or unless the White House caves — it’s hard to see how we don’t end up on the brink of an economic catastrophe early next year.