The temperature hit a record 105 degrees Friday at Washington Dulles International Airport, a new record. The temperature must have been at least as hot at the White House. There President Obama and House Speaker John Boehner were engaged in their latest discussion regarding raising the nation’s debt ceiling. Apparently tempers flared, Boehner left, and the president and speaker were left to give dueling press conferences to explain why the other side was being unreasonable. Meanwhile, social security recipients were anxiously wondering if they were going to get their checks on August 3rd.
The dueling press conferences were at least instructive in underscoring the fundamental issue of disagreement. It’s not the deficit that really matters, it’s not even the debt ceiling, and it’s not jobs or the state of our economy. It’s taxes. For House Republicans, the bottom line is no taxes must be raised, not even when our deficit is more than a trillion dollars a year. Unfortunately, they have boxed themselves in by claiming that debt and the deficit were more important when all along it was really about taxes. Now, as President Obama pointed out in his press conference, they are left with the inability to say yes.
To Republicans, the deficit is less important than no new taxes. It turns out that for them taxes trump everything. It used to be that Pentagon spending was sacrosanct for Republicans: how could we possibly endanger our national security? Well, not anymore: when push comes to shove they would rather reduce our military budget than raise a dime in new taxes. The logic gets fuzzy when it comes to agriculture subsidies and the like. In their minds, taking these away without adding subsidies somewhere else is a tax hike. Thus spake Grover Norquist. But cutting Pentagon spending in general, even though there is a huge defense community that depends on federal spending, is apparently okay if it avoids a tax hike.
The debt ceiling is fungible as well. Republicans are not opposed to raising the debt ceiling, but only if there are no new taxes and “savings” by cutting expenditures exceeds the amount by which the debt ceiling is raised. It is also fine to not pay our bills, bring the economy into depression, leave grandma without her social security check and raise our long-term borrowing costs rather than raise a single dime in new taxes.
One can arguably say that Republicans are crazy, but one cannot fault them for inconsistency. They mean what they say and they say what they mean unless, and this is a very big unless, they can have a sudden change of heart or Speaker Boehner can convince enough House Democrats and non-Tea Party Republicans to go for another deal.
So far Republicans have been remarkably tone deaf to their corporate masters, who are now telling them, “Okay, enough is enough. Time to sober up and compromise now.” Too bad these same corporate masters were not working to elect establishment Republicans rather than Tea Party Republicans last year. While they achieved their desire for a majority of Republicans in the House, it came at the expense of political accommodation, hitherto a necessary skill when there is divided government.
Yet, there is a power stronger than even Grover Norquist that Republicans have foolishly ignored until now, but they will discover on or around August 3rd if the debt ceiling is not raised. It is the power of senior citizens who depend on social security but who will not get it. It is the power of sixty million angry and desperate phone calls from hot-tempered grannies and gramps who, if they are mobile, will also be picketing outside their representative’s offices. You really don’t want to rile up these folks, because they were the ones who voted you into office, but they did so on the condition that you would not mess with their junk.
Politically, letting Republicans push us into default probably would help rather than hurt the president, providing it can be shown that he did everything possible to prevent a default. Given that the Senate has already rejected the House’s plan, this has already been demonstrated. The economic effect of default would likely be catastrophic, but the political effect would be to throw the Tea Party out in 2012, and likely lead to the demise of the Republican Party brand.
Still, there has to be one adult left in the room. If I were President Obama, and if push came to shove I would say that the 14th Amendment gives me the right to extend the debt ceiling unilaterally to cover all debts covered by law. I would also cross my fingers and hope that at the 11th hour that there were enough worthy creditors willing to loan us money to avoid default. I expect he has his lawyers all over the problem. That is his trump card that he will be forced to pull out only if all else fails.