JONATHAN CHAIT JULY 15, 2011
-
Read Later
READ LATERAvailable only to subscribers. SUBSCRIBE TODAY
-
Listen
ARTICLE AUDIO
- Font Size
[Guest post by Matthew Zeitlin]
Lawrence Kudlow, as pure a supply sider as there is, makes noises that sound like what a decent number of Republican congressmen describe as “alarmism”:
Senator McConnell is determined to produce something from this grand-design package. He’s a smart guy. He may be saving the GOP from itself. McConnell believes that debt default must be completely taken off the table. That’s the thinking behind his debt-ceiling proposal, unless overturned by two-thirds of a congressional vote.
He strongly believes that Republicans must disassociate themselves from any debt default or downgrade by the ratings agencies. And he recognizes that the monthly revenue and spending numbers are so unbalanced that the idea of revenue allocations in the event of no debt-ceiling hike is simply not feasible or desirable.
Other Republican sources are telling me they do not want to risk the destruction of the dollar as the world’s reserve currency by allowing a debt default or a downgrade. Eighty million checks have to go out. Otherwise the GOP could be blamed.
So one way or the other the tide is turning toward a deal. Credit McConnell’s uber-clever stratagem.
When Mitch McConnell, Lawrence Kudlow and Bill Gross are all agreed that failure to raise the debt limit could lead to economic disaster, and for the first two, a huge political loss for Republicans, the rationale for the McConnell plan becomes very obvious. Now, it seems, there is not only a wedge driven between the business community and the base of the Republican Party, there is now a division between the supply-siders and the base, and even between those who prioritize Republican political power over all else and the Republican base.
Look, Lawrence Kudlow understands that there is no chance of tax cuts in a debt ceiling deal, and from the Republican perspective, things were getting uncomfortable with talks of any revenue increases. Moreover, he says what I imagine many Republicans already know: that the GOP would likely be blamed for the resulting downgrade, interest rate hikes and chaos that resulted in a failure to raise the debt limit.
These considerations are what have lead supply siders and Republican loyalists like the Wall Street Journal editorial page, Fred Barnes and Jennifer Rubin to praise McConnell’s plan so passionately. And yet there is still a sizable section of the Republican caucus that simply will oppose any plausible deal.
A split between the business wing of the party and the base is certainly unexpected, but not totally impossible to fathom. The split we seem to be seeing now, between a base that does not think failure to raise the debt ceiling is a big deal and those conservatives who are primarily concerned with low taxes and/or the continued electoral viability of the Republican Party, is truly something to behold.
9 comments
"We should never agree to any deal but my line in the sand is a balanced budget amendment. Anyone can propose an amendment in Congress, though. Once 2/3 of both the House and the Senate approve the measure, which is a given, and 3/4 of the states ratify it--that's 38 states if you're counting--then I will give my imprimatur on all this talk of raising the debt ceiling. Which is unnecessary and totally being blown out of proportion." Which Republican candidate gets to this ridiculous statement first? And McConnell says "Nobody is talking about not raising the debt ceiling." The Republican Party should be censured and then disbarred.
- chaitless
July 15, 2011 at 11:03am
Nice idea, c., but how will that be accomplished?
- liberalref
July 15, 2011 at 11:07am
So, the Republican Party has become so insane, with the Tea-Party people, that McConnell concludes he simply can't get a deal done that the Tea-Party will accept. Having already CREATED the situation in the first place by not passing a clean debt-ceiling bill in the first place. So, he's GIVING all responsibility for the debt-ceiling raise to the President. How nice. I assume, immediately after the President then single-handedly saves the country from financial default, McConnell will rejoin the lunatic fringe of his party, and roundly condemn the President for doing this. The hypocrisy is both astonishing and breathtaking. What happens next time a Republican President gets in power, and single-handedly refuses to raise the limit? I guess we'll cross that bridge when we come to it.
- AllanL5
July 15, 2011 at 11:09am
If 30 Republicans bolted and went for the McConnell plan, would Boehner bring the bill to the floor of the House for a vote? And what are the chances it will pass the Senate? This is a surrealistic nightmare. I only hope that if they don't raise the debt Obama instructed Geithner to just borrow the money, by then the markets will have collapsed so badly that 90% of America will breathe a huge sigh of relief. And hopefully Bachmann, Pawlenty, and other aholes who advocated default are crushed by a vengeful nation
- blackton
July 15, 2011 at 11:10am
The debt is ever and always the responsibility of the Congress. It is the difference between what the Congress chooses to spend and the revenues of the taxes Congress chooses to levy. The President cannot increase or decrease taxes. The President cannot choose to spend what Congress has not authorized, nor can he refuse to spend what Congress has authorized. Not that the public would ever understand this. Still, a few hundred repetitions by the President might help.
- roidubouloi
July 15, 2011 at 12:20pm
- It's human nature. People ignore the best evidence and make the wrong decision. They hang around during a hurricane or a flood and head out into a blizzard. The lucky one's are rescued and the rest are recovered or never found. We're not near the end of this folly on the right so the only hope is they'll set up to self exterminate in their primary. They can survive all the wrong moves this session but being on the wrong side of 70% of what all voters want should clean them out in late '12.
- michaelg
July 15, 2011 at 1:03pm
I'm beginning to understand the thirties better - not only the Depression itself but also, the craziness that infected Germany. This is something I'd never understood - how a sophisticated, civilized nation, a nation that had produced great art, music, literature and technology, could also have produced a social and political nightmare that ultimately resulted in catastrophe for the entire world. Apparently it is possible for large groups of people to simply lose it? or to so misread factual reality that they drive themselves off a cliff?
- Sophia
July 15, 2011 at 1:40pm
Be cool, Sophia. You're not allowed to freak out. American idiocy isn't evil, and the institutions & values that would be most affected by said idiocy are strong enough to withstand it, especially if we have good journalists who expose the lunacy & idiocy before it results in catastrophe.
- Konstantin
July 15, 2011 at 3:04pm
blackton: "If 30 Republicans bolted and went for the McConnell plan, would Boehner bring the bill to the floor of the House for a vote? And what are the chances it will pass the Senate?" First, I don't see McConnell-Reid plan facing much difficulty in the Senate. After all, McConnell won't block it, most if not all Democrats will probably support it, and there are enough sensible Republican Senators (with the help of arm-twisting by the business community) to get to 60 if necessary. I doubt McConnell would be pushing it unless he knew it would go through in some form. And if it passes the Senate, I don't see how Boehner can not bring it to a vote. The Tea Party faction, while boisterous, is not a majority of his caucus. He should know that a failure to raise the debt ceiling by not even having a vote would bring about an economic calamity that would be laid at the feet of House Republicans for being so intransigent about raising revenues, particularly on incomes above $250,000 which is supported by 66% of the public. How do you run a campaign on a position that is so wildly unpopular? And that's not even taking into account what happens if Social Security checks are delayed or withheld. How does he hold the House in 2012 if that happens? Boehner has to either piss off the Tea Party by having a vote or the public by not having one. He might be able to survive the former, but I doubt he can survive the latter. So McConnell-Reid passes with a combination of Democratic and Republican votes. I think this is the only option, and those in the negotiating room already know it. What they're telling for public consumption is exactly that, not what they know the deal will actually be.
- dsimon
July 18, 2011 at 8:03am