Last week the conventional wisdom was that President Obama made a grave mistake by not including a measure to raise the debt ceiling in his tax cut compromise.
The reasoning was pretty straightforward. Democrats finally had the GOP in a position to negotiate, and what they came up with was a plan that will increase the deficit without making Republicans accept, as the cost extending deficit-financed tax cuts for wealthy people, a promise not to let the country default on its debt. As a result, when the debt-limit approaches next year, Republicans can go back into hostage-taking mode and refuse to raise the debt ceiling unless Congress and the White House agree to dramatic spending cuts.
Harry Reid isn't buying it, and I'm beginning to think he has a point. As the current showdown over federal spending indicates, Republicans have no shortage of "hostages" or leverage, or whatever you want to call it. Congress controls the pursestrings, which means these showdowns are baked in, even in absence of the debt ceiling question.
The difference is that the stakes in the debt ceiling fight -- including default -- are higher than they are in appropriations fights. So where does that leave us: Spending cuts are probably inevitable. And since so many rank and file Republicans have refused to vote to raise the debt ceiling, Reid sees an opportunity to really fracture the GOP's tea party/establishment coalition.
That could work. John Boehner and his leadership team have all but ruled out allowing a default. But they'll never be able to get the sorts of draconian spending cuts Tea Party members will demand through the Senate. So they'll have to twist some arms and rile up the base, or deal with Democrats on something closer to their terms.
That's what Reid means when he says he wants the Republicans to have "buy-in" on the national debt: that the GOP calculus will change dramatically when the proposed "hostage" is the stock market and the country's bond rating, and the ransom is Social Security, or the health care law. Maybe they won't go there.
In any case, we'll find out who's right in a few months.