StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between

#Cliffgate Update: 1 In 4 Chance Debt Ceiling Won't Be Raised In Time

03 Oct 2013
Posted by Stan Collender

Here's what I told Chris Ciliizza (@thefx) on Post TV yesterday. 

There's clearly an element

There's clearly an element within the TP that is hoping they can hold out for another two weeks so they can combine the CR and debt ceiling and double their leverage.

I think the difference will be that as we approach Oct 17, the pressure from Wall Street bankers, Fortune 500 CEOs, the Chamber of Commerce, the people who, let's not kid ourselves, are funding the GOP, to stand down on the debt ceiling will become enormous.

Trust in Boehner?

I agree. While the shutdown is an inconvenience for many and a genuine hardship for some, it's still the preseason. I'm sure hoping that within the next 7-10 days Boehner, McConnell, et al will come forward and get something resolved on the debt ceiling. As the pressure ratchets up, that will be politically easier to do.

Don't expect the TP to give up easily though, this is kinda their last hurrah and I suspect some know it.

If we default and things get bad, I'd guess we'll have a Dem Congress come '14. I doubt Boehner wants that.

Dem Congress in 2014

If we default, a Dem Congress in 2014 will not happen. Both parties will be finished and a third party(ies) will win the vast majority of seats open in 2014.

I was skeptical but your well

I was skeptical but your well reasoned, data-rich arguments won me over!

Seriously, can you even give a credible narrative as to why and how this happens? Anything?

Why are House Democrats so unprepared?

It seems that no House Democrats has filed a bill in time that would allow a discharge petition to fund the government? They need the twenty Republicans to sign on, but they also need the bill to linger for 30 days in committee, before they can bring it before the whole House. They don't have osuch a bill in the pipeline now and are grasping for straws like an old Republican bill from March that would fund government but also would cut spending by 1% every 90 days without budget. Why has the Democratic House leadership been apparently asleep?

Have they at least filed a bill by now to raise the debt ceiling without any strings atached?

Discharge petitions are tricky things

First, note that the Democrats have filed a discharge petition on a bill in the Rules Committee, and those only take seven days to ripen.

Second, I am guessing that any bill you tried to get into committee that was a clean raise could be (and was) reported out negatively (or positively) before 30 days just to make sure you couldn't use it as the basis for your discharge petition.

Third, any attempt to resurrect via discharge petition any bill that was not the exact one you wanted (unless it were in the Rules Committee) would force you to get through the Rules Committee to make it the bill you wanted, and...good luck with that.

There are reasons why the mechanism has not been used successfully since the days of McCain-Feingold.

How will it end?

The House has the votes to pass both the debt ceiling increase and a clean CR. The bills only need to be brought to the floor of the House. One person, Speaker Boehner is all that stands between default and a vote. The Tea Party lacks the support to keep these from passing.

If Boehner cares at all about his legacy, he will not lead the nation into default.

Better than 50% chance it goes down like this:
Boehner will go to the brink with the Tea Party and find out that the administration will not cave. He needs to ask, now what? The Tea Party will have no answers and no strategy. They will be forced to cave or Boehner will be forced to over rule them and let the debt ceiling be raised by the Democrats. It is possible that we might see the debt ceiling raised and the shutdown continue.

The Tea Party position is clear. They demand that the threat of default be used to get their way. Only after it becomes clear that the threat will not work will they be forced to cave or sane representatives will outvote them.

Way too optimistic

If I've learned one thing since the GOP took the House in 2010, is that where republicans are concerned, things are always way worse than you think. I think even the normally pessimistic Stan Collender is off-base here just because he underestimates how little the tea party cares about a default. In fact they welcome it. In my humble opinion, I'd say chances of the debt ceiling being lifted are more like 1 in 4 rather than the other way around.

It's not that they don't care

about a default, it's that there's this whacky notion that's popular in Tea Party land that a failure to raise the debt ceiling does not equate to a default. According to this narrative, so long as the federal government continued to make interest payments (and there will be plenty of tax receipts to do that) there is technically no default. Nevermind that there is no statute nor legal precedent that authorizes the executive branch to prioritize certain authorized appropriations over others. In their view, it's just obvious that the government should prioritize debt service (followed by social security payments followed by military expenditures followed by everything else the GOP wants) and the only reason for a default would be Obama and those pesky Dems CHOOSING not to make the interest payments so that they could instead spend the money on welfare and food stamps.

As I said earlier in this thread, I think that in the next few days the business leaders and others who are funding the GOP will start making phone calls telling them to stand down on this one. I'm just not 100% certain that the Ted Cruzes of the world will answer.

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