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The End of One Crisis and the Start of Another

By Steve Benen, Maddow Blog - January 2, 2013

In December 2010, congressional Republicans forced a contentious fight over tax policy, threatening to raise middle-class taxes and hurt the economy unless Democrats agreed to extend tax breaks for the wealthy. Four months later, the GOP very nearly forced a government shutdown, demanding Democrats accept spending cuts.

In July 2011, congressional Republicans instigated a debt-ceiling crisis, nearly forcing a default and global economic catastrophe, demanding steep spending cuts as a ransom. Three months later, the GOP threatened another government shutdown.

In April 2012, Republicans threatened to force yet another government shutdown, which was followed by the fiscal standoff that wasn't resolved until last night.

The point, of course, is that congressional Republicans are quite comfortable moving from one manufactured, self-imposed crisis to another, resolving one only to immediately pivot to the next, no matter the costs or consequences. It's become a terrifying m.o. that makes routine governing nearly impossible and problem solving a pipe dream.

And yet, so long as Republicans control part of Washington, the pattern will continue. Indeed, the stage is already set for the next crisis, which is now just two months away.

I'm referring, of course, to the one thing President Obama has said he will not budge on: the next debt-ceiling increase.

Technically, the nation reached its borrowing limit on Monday, but the Treasury Department will begin taking "extraordinary measures" that will extend the inflexible deadline until late February or perhaps early March, at which point Congress will either have to raise the ceiling -- as it's done 90 times over the last eight decades -- or the nation will default, trash the full faith and credit of the United States, and very likely crash the global economy.

The GOP line, at least for now, is to aim for the latter. Sen. Lindsey Graham (R-S.C.) said over the weekend that without "meaningful" entitlement cuts, he'll refuse to allow the nation to pay its bills and force the country into default. Yesterday, Sen. John McCain (R-Ariz.) said the same thing.

On the other hand, we have President Obama and congressional Democrats who have said they simply will not negotiate on the debt ceiling -- if Republicans take the nation hostage, and threaten to hurt Americans on purpose, Democrats will not pay the ransom. The president repeated the point last night, immediately after the fiscal agreement had cleared Congress.

There can be little doubt that the GOP will test Obama's resolve, working from the assumption that he'll blink before Republicans follow through on their threats to do deliberate national harm. But as of now, the White House insists Democrats will negotiate on all kinds of policies, but not this one.

The outcome is obviously important for those who hope to avoid a global depression, but it also matters insofar as evaluating the McConnell/Biden fiscal agreement. The bipartisan deal includes no cuts Medicare, no cuts to Social Security, and no new spending cuts at all. Why would Republicans swallow a compromise like that? In part because they assume they'll get those cuts in short order, demanding them in exchange for a debt-ceiling increase.

Obama and his team, not surprisingly, see things very differently -- they secured a decent deal with new tax revenue yesterday; they broke two decades of GOP opposition against higher rates, which was hard to imagine a year ago; and they have no intention of giving Republicans anything in exchange for a new debt limit.

If the White House stands firm, it'll make the fiscal agreement look that much better. If Obama caves, the deal will look that much worse.

As the machinations get underway in earnest, keep in mind we'll see bipartisan talks even if the president sticks to his guns because of a confluence of events: in two months, the automatic sequestration cuts will be set to kick in, and in March, funding for the government will run out. Both sides will discuss ways to avoid unpleasant outcomes, but that doesn't necessarily mean Obama is negotiating over the debt ceiling.

The key will be Boehner's arbitrary dollar-for-dollar rule on debt-ceiling increases -- for every dollar the limit goes up, the Speaker expects another dollar in savings. By this reasoning, Boehner seriously expects Democrats to agree to another $1.5 trillion in spending cuts -- independent of the sequester, the Budget Control Act, and the next budget fight -- sometime between now and the end of February.

Obama says that's not going to happen. Stay tuned.

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Obama did not rule out use of the 14th amendment.

Here is a story from NPR on the legal argument you can listen to or read. (source)

This will utterly drive the T Party nuts. To quote Boehner/Cheney, they can go F themselves.

I am one who is always happy when people live up to my hopes rather than down to my expectations. With Obama, you never can tell. Let's watch him if he tries to give away the store with "Chained CPI" on Social Security that has nothing to do with deficit reductions.

According to Grover ( the snake, not the puppet) Obama is a "lame duck."

So, in a real world, he would tell the Republicans to "go Cheney themselves" over the debt limit.

Sadly, we no longer reside in a real world.

I would love to see Obama invoke the 14th amendment. As Zasloff pointed out, no one could sue Obama in court for doing so. The most that could happen would be that the House could bring articles of impeachment, but the Senate would never convict him. Then any Democrat could run against any Republican who voted to impeach Obama on the basis of wanting to crash the U.S. and global economy as an alternative, and Democrats could probably pick up quite a few more seats in 2014.

actually we do live in the real world where President Obama is only a president and not a dictator. As much as he would love to get rid of the consitution and the house and senate he doesn't have the power. He works for Us. and I must say, the people that have some smarts think he is doing his job in a manner that makes Carter look like a business genius.

oh please....guessing another right winger who thinks the minority is so so much smarter than everyone else. The carter comparisons did not turn out too well, did they?

If it ever descends to the issuing-of-platinum-coins point, may I suggest instead of two or three one trillion dollar ones, that they mint a few thousand billion dollar ones? There are probably a few billionaires who would love to own one or two, just to have another thing to hold over wanabees like Donald Trump.

And imagine what a boon it would be to the insurance industry, to cover private owners of the coins.

Debt and ceiling used in the same sentence? With democratic support? Har-dee-Har, ain't gonna happen.Give me them digits baby, you know you want Billhillie !! Not your dum-phone number the percentage number.How much private sector money do you need to make things fair and "fix" stuff.

Call me maybe? Well I reckon we got a high maintenance government.Washington's little princesses only walk on rose petals.

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