Germany and debt ceiling clown show

The Myth of the German Boom Persists in Roger Cohen's Columns by Dean Baker

House Republicans Make Saddest Hostage Threat Ever by Jonathan Chait

GOP Preparing New Farcical Debt Ceiling Standoff by Yglesias

debt ceiling clown show - theater of the absurd

Paul Ryan, Mitch McConnell Issue Least Frightening Hostage Threat Ever by Jonathan Chait

Last Sunday, when Paul Ryan announced on Fox News Sunday that Republicans would again demand policy concessions in return for lifting the debt ceiling, I paid little attention, in part because the host, Chris Wallace, appeared to push Ryan into it (WALLACE: Sir, I understand, but the question is, are you going to demand more in return for raising the deficit? RYAN: We as a caucus, along with our Senate counterparts, are going to meet and discuss what it is we want to get out of the debt limit. We don't want nothing out of this debt limit.) But now Mitch McConnell, too, says he “can’t imagine” passing a clean debt-ceiling hike.

Are the Republicans really going to try this again? 

Unlike the last debt-ceiling hostage crisis, which resulted from explicable (though disturbing) internal party dynamics, the prospect of a new round of threats seems bizarre. We tested this threat a couple of months ago. Republicans swore up and down they would refuse to lift the debt ceiling unless they got concessions, and President Obama swore up and down he wouldn’t give concessions.

The result was in no way ambiguous. There were no concessions. Not a future commission, not a show vote, not handwritten letters. Zip. Obama tested the Republican willingness to trigger a worldwide economic meltdown to obtain concessions, and it turned out, they won’t pull the trigger. How on Earth they think they can try this bluff again, I can’t imagine. 

Indeed, political conditions for the threat are even less favorable now that the two parties have agreed to a budget. Republicans used to have the substantively crazy but popular-sounding justification that they didn’t want to “write Obama a blank check.” But now the two parties agree on the level of spending this year. Raising the debt limit is needed to authorize the spending Republicans want. (Of course, we could avoid a debt limit hike by jacking up taxes, but obviously they don’t want to do that.) 

Clearly, they’re not going to win. The question is why they’re making a threat when Obama knows they can’t carry it out. Why wind up conservative activists for a new fight that’s doomed to failure? Nothing about this threat makes any sense. 

Update: In a conservative talk radio interview, Ryan elaborates. Ryan really brings the crazy here:

With respect to the debt limit, you and I and our colleagues are going to have to meet early after the holidays to decide what’s the right course going forward in that. We’ve never just done nothing.

"We've never just done nothing"? Never? How about, I don't know, the last time you raised the debt ceiling? 

Ryan continues:

We want to make sure that we’re taking steps in the direction of fiscal conservatism, of fiscal responsibility. I, for one, think we need to do more in the energy sector. I believe we need to approve Keystone Pipeline.

So your steps toward fiscal responsibility involve approving a pipeline? A pipeline with no measurable budgetary impact.

positive outlook

“Disgust” as Political Motivator by Jared Bernstein

Let me get this straight:

–Sen. Murray and Rep. Ryan may actually agree on a budget, i.e., top line discretionary spending numbers, that shaves a bit off of the mindless 2014/15 sequester cuts?

–The healthcare.gov website is on the mend—not perfect, but much better.

–Speaker Boehner, as per the link above, is solidly on record against another shutdown; Sen. Cruz is nowhere in sight.

Must one pinch oneself? Is Dysfunction Junction applying for a name change? Is this the beginning of some sort of turnabout?

Surely not, but instead of the usual “everything’s as bad as ever, don’t be fooled!” let’s contemplate one aspect of this (briefly, as I’m on the road, scrunched in an airplane seat that would be a tight fit for a four-year old; btw, here’s a thought: you can’t lean your seat back in coach! Sorry, but unless I’m your dentist, it just doesn’t work).

That aspect is not pretty, I grant you, but it is: disgust. Polls quite clearly reveal that most people, even if they’re not paying that much attention, have pretty much come to loathe the DC dysfunction act.

Three things we learned from today’s Obamacare update by Sarah Kliff

There were 1 million visitors to HealthCare.gov Monday. And there have been 380,000 visitors to HealthCare.gov as of noon today. This is slightly higher traffic than Monday, when 375,000 visitors came to the Web site by noon.

"We know that consumers are actively shopping and enrolling in coverage every day," Medicare spokeswoman Julie Bataille said. "We believe there's an indication that these will grow over time." 

 According to Massachusetts, all of the healthy people will sign up last minute in March.

Ten Takeaways From The Great G.O.P. Cave-In by John Cassidy

debt ceiling clown show over

Supposedly Boehner will violate Hastert rule and allow up or down vote on Senate plan.

debt ceiling clown show

Dems think they’re killing debt limit GOP extortion for good by Greg Sargent

The question about the deal is this: Given that the next debt limit deadline looms just after the date on which government funding runs out, doesn’t this just mean we’ll find ourselves in roughly the same situation in a few months, with Republicans demanding concessions in exchange for averting default and economic chaos?

Senate Democratic aides tell me they think the possibility that conservatives will insist on another round of debt limit brinksmanship is very real. But they think they’re on the verge of rendering any such threat an entirely empty one. The idea: Decoupling the debt limit from the budget talks, and placing the debt limit deadline further out, will effectively isolate the debt limit debate and make another default extortion crisis even harder politically. By refusing any meaningful concessions in exchange for a debt limit hike this time — and earlier this year – Dems will have finally killed the “Boehner Rule” (which demands spending cuts in exchange for any hike) and driven home that GOP debt ceiling extortion will never be rewarded again.

“Of course extending the debt limit for a longer period of time would be preferable, but under the circumstances, with Republicans trying to figure out a way to get out of this mess, the idea that the debt limit has been defanged as an extortion tool was enough,” a Senate Dem leadership aide tells me. “Conservatives will still try to bring this up and they still may end up damaging the economy, because it’s been so ingrained that this is a tool that should extract concessions. But it will be hard for anyone to take that claim seriously.” GOP leaders included, presumably.

As I reported yesterday, Dem aides believe Republican tactics have delivered such a massive hit to the GOP that leaders will be even more wary of another default crisis once the 2014 elections are underway. As one aide told me, pressure from the right for another hostage standoff could divide Republicans — particularly if GOP leaders are even more eager to avoid a crisis – and put pressure on 2014 candidates to hew to extremism at an even worse political moment for the party.

over? until January?

Almost Over by Krugman

Senate Republicans have figured out what to do:





It ain’t over until the tanned man sings, but it looks as if Obama’s Michael Corleone strategy has succeeded.

Senators Near Deal on GOP Surrender by Jonathan Chair

This is a huge win for those Republicans who got into the shutdown to help unions. For those who had other goals, it's basically a total surrender. The policy changes attached to the deal appear to be minor, and reciprocal — each party got something of roughly equal value, so the deal could have occurred without the threat of default or shutdown. Democrats probably will have succeeded in their overall goal of giving Republicans nothing through extortion they could not have gotten through regular legislation.

Republicans are delusional about US spending and deficits by Dean Baker

2014 midterms

Poll: Basically Everyone Now Angry at GOP Over Shutdown by Dave Weigel

percentage of Americans disapproving of the way Republicans are handling negotations: 74 percent

Washington Post/ABC news poll for Oct. 9. On Sept 25 i was at 63 percent.

Obamacare and the debt ceiling clown show

On Stephanopolous, Krugman was right to say that the ACA problems would be fixed this year and over time. The Republican talking heads were wrong - yet again - in predicting that Obamacare would be an open wound leading up to the elections.

Plouffe was right to say that the 2011 sequester budget is a Republican budget. That's the baseline.

He and Biden negotiated it. It's weird how Biden is taking blame. Is this for Hillary? More likely it's the truth.

Republicans won't admit that what is going on is extortion, that it is a new development, and that the Clean CR is a Republican budget.

Obamacare Success by Krugman

debt ceiling clown show

At Risk: Currency Privilege of the Dollar by Floyd Norris

If He Has to, Obama Should Raise the Debt Ceiling Unilaterally by Emily Bazelon and Eric Posner

Silver wrong?

Nate Silver gives a hostage to fortune. Granted, a year is a long time in politics. Going to the mat over defaulting on the debt is a new phenomenon.

The Six Big Takeaways From the Government Shutdown by Nate Silver on October 10, 2013

The Shutdown Probably Won't Kill the GOP in 2014 by Yglesias. Probably wrong like Recovery Winter.

vs. Sam Wang (via DeLong)

Sam Wang: What the Gerrymander giveth with one hand… House 2014, prediction #1:

Provisionally, it looks like the following: In a little over a week, the shutdown has increased the probability of a Democratic House takeover in 2014 from 13% to as high as 50%.

 John Boehner Is Borrowing a Plan From Homer Simpson by Jonathan Chait

Here’s the best rule for determining what John Boehner will do in any situation: If there is a way for him to delay a moment of confrontation or political risk, he will do it. That’s why Boehner’s current plan is to raise the debt ceiling for six weeks while keeping the government shut down.

Business is freaked out and will be furious with him if he triggers a default. So he’s raising the debt ceiling for long enough to get them off his back. And tea-partiers will be furious if he abandons their quest to defund Obamacare by shutting down the government. So he’s leaving that part in place.

Is there a plausible strategic logic to this plan? None that I can see. The putative reason for delaying the debt limit is to open fiscal negotiations with Democrats. But Republicans have been dodging fiscal negotiations with Democrats for most of the year. Why? Because they don’t want to compromise on the budget. They want unilateral concessions.

Obama won’t give Republicans unilateral concessions. Any deal Boehner strikes with Democrats will have to contain some concessions to Democrats, which will further enrage the tea party. So there’s no deal Boehner can cut on the budget that won’t anger the base, which brings us back to the same stalemate — waiting until the next debt-limit hike, when he needs to prevent catastrophe again.

The Daily Show hires actual hostage negotiator to negotiate with GOP strategist.

Evans rule

In Which I Reiterate My Conclusion That Non-Explicit Regime-Shift Changes in Monetary Policy Cannot Summon the Inflation Expectations Imp: A Note on Our Post-2009 Failure to Achieve Equitable Growth by DeLong

The Fed has been dealing with Congress's austerity. December 2012, the Evans rule provided the economy with insurance against the Fiscal Cliff and ongoing sequester. In June there was taper-talk in that they thought maybe things had calmed down. In September there was the non-taper in that the debt ceiling crisis was coming down the pipe and the data didn't support a taper.

2014

Bruce Bartlett: This Government Shutdown Will Defeat the GOP in 2014

(via DeLong)

The Midterms: Sam Wang Weighs In by Krugman

"If the election were held today, Democrats would pick up around 30 seats, giving them control of the chamber. I do not expect this to happen. Many things will happen in the coming 12 months, and the current crisis might be a distant memory. But at this point I do expect Democrats to pick up seats next year, an exception to the midterm rule." 

...As he says, November 2014 is a long way away. But it’s at least possible that the Republican brand will get worse, not better, over the course of the year, in which case an upset will indeed be in the cards.  

Republicans could lose their House majority because of the shutdown by Sam Wang

A breach of the debt ceiling and they definitely lose the House.

I believe the Republicans are going to suffer much more than anyone realizes. They're assaulting the constitutional order of the American government. They're causing economic chaos. People are pissed and will be pissed. Polls show 70 percent of respondents disapprove of their handling of the shutdown showdown. Yglesias hedges:

One Piece of Good News About the Debt Ceiling

And so what this means is that if Republicans force us to default on payments that come due on November 1, that doesn't put the U.S. government in the legal position of having defaulted on all its debts. In principle, you could have a minor disaster on the 1st followed by a hasty congressional recognition of the error of its ways and then the problem is addressed on November 2 before the whole world burns.

The thing is this could all end in a second of Boehner would violate the Hastert rule again and allow a vote.

Virginia's Republican candidate for governor looks like he'll lose bigtime on Tues. Nov. 5th.

The Shutdown Prophet by Jonathan Chait 

In our Founders’ defense, it’s hard to design any political system strong enough to withstand a party as ideologically radical and epistemically closed as the contemporary GOP. (Its proximate casus belli—forestalling the onset of universal health insurance—is alien to every other major conservative party in the industrialized world.) The tea-party insurgents turn out to be right that the Obama era has seen a fundamental challenge to the constitutional order of American government. They were wrong about who was waging it.

The debt ceiling needs to go away

One More Reason the Debt Ceiling Needs to Go Away by Jonathan Cohn

Blame the Deficit Scolds by Krugman

GOP wins with Ryan discretionary budget austerity, but no changes to entitlements, and the deficit is no longer an issue

But they'll probably pay electorally.

For the GOP, when Democrats are in power, the deficit is an issue. When they are it isn't but they push for tax cuts and deregulation to spur "economic growth."

Boehner Urges G.O.P. Unity in ‘Epic Battle’ by Jonathan Weisman and Ashley Parker

Democrats say they simply cannot trust the speaker to deliver. Mr. Reid said in an interview in his office on Friday that Mr. Boehner came to him at the end of July with a proposition: If Senate Democratic leaders could accept a stopgap spending measure in the fall at levels that reflected across-the-board spending cuts, the speaker would refrain from adding extraneous measures that could precipitate a clash.

Mr. Reid was leery, since that level — $988 billion in discretionary spending for the 2014 fiscal year — would be $70 billion less than the Senate-passed budget. “I didn’t like it. I’ve got a couple of tough women to deal with,” he said, referring to Senators Patty Murray of Washington, the chairwoman of the Budget Committee, and Barbara A. Mikulski of Maryland, chairwoman of the Appropriations Committee.

On Sept. 12, in a meeting of the top four Congressional leaders, Mr. Boehner said he was running into problems with a conservative groundswell demanding that a gutting of the health law accompany any spending measure. Mr. Reid and Senator Mitch McConnell of Kentucky, the Republican leader, suggested a procedural step that would allow the House to vote on a stopgap spending bill with a side provision removing funds from the health care law that the Senate could strip out before sending the spending measure to the president.

Again, the speaker agreed. And again, he could not carry through, Mr. Reid said. “If I told him I would do something, I would do that,” the Senate leader said.

At a White House meeting with the president this week, Mr. Boehner twice brought up quiet talks between Ms. Murray and Representative Paul D. Ryan of Wisconsin, the House Budget Committee chairman, as a way to end the impasse with a broad budget deal. The third time, Mr. Reid laughed out loud.

GOP fail

Shorting Out The Wiring by Krugman

For the moment, at least, the shutdown and the general scene of insanity in Congress is clearly hurting the Republican brand. And there’s a whole small industry of crunching numbers on the 1995-6 shutdown, etc., to estimate the likely impact on next year’s elections. For now the conventional wisdom is that the impact will be small, not nearly enough to restore Democratic control.

I have no idea whether that’s right. But as I was reading the various news reports, it occurred to me that there’s a subtler but possibly profound form of damage the GOP is doing to itself, one that will cast its shadow for a long time.

It goes back to something Josh Marshall of Talking Points Memo used to say — that Washington is, in effect, wired for Republicans. Ever since Reagan, the Beltway has treated Republicans as the natural party of government. Sunday talk shows would feature a preponderance of Republicans even if Democrats held the White House and one or both houses of Congress. John McCain was featured on those shows so often you would think he won in 2008.

And there was a general presumption of Republican competence. It’s hard to believe now, but Bush was treated as a highly effective leader who knew what he was doing right up to Katrina, while Clinton — now viewed with such respect — was treated as a bungling interloper for much of his presidency. Even in the last few years there was a rush to canonize Paul Ryan as a superwonk, when it was quite obvious if you looked that politics aside, he was just incompetent at number-crunching.

But I think the last two years have finally killed that presumption. It wasn’t just that Romney lost — his shock, the obvious degree to which his campaign was deluded, was an eye-opener. And now the antics of the Boehner bumblers. 

Suddenly the old Will Rogers line — I’m not a member of any organized political party,I’m a Democrat — has lost its sting; the upper hand is on the other foot. And that’s going to color narratives and shape campaigns for a long time.

prediction

via Bill McBride who got the non-taper right

Some thoughts from Alec Phillips at Goldman Sachs: Will the Federal Shutdown End with a Debt Ceiling Increase?   

In our view, the most likely outcome of the current fiscal dispute is an agreement that combines an increase in the debt limit and a "continuing resolution" that reopens the federal government. We would expect this to pass no earlier than the end of next week (i.e., October 11-12) and more likely sometime around the Treasury's projected deadline of October 17.

Other outcomes are possible, but we believe they have lower probabilities. It is possible that political pressure to end the shutdown could build, but polling thus far does not indicate this has happened yet. It is also possible that if the effort to resolve the two issues together fails, the shutdown could remain unresolved even after the debt limit has been increased. This is a possibility, but we see it as less likely than a combined continuing resolution and debt limit increase.

The intense public focus on the shutdown may have actually raised the possibility of a "clean" debt limit increase. While the situation could go a number of ways, it still appears that the risk of a failure to raise the debt limit is low and that the shutdown has not had a negative effect on the prospects for increasing it.  

And Phillips also mentions:  

Congress is scheduled to go on recess the week of October 13, but this would presumably have to be cancelled if the debt limit had not yet been addressed. In the past, seemingly intractable political disputes have often been resolved around the start of planned congressional recesses.
emphasis added

Can't miss recess ...