I had a sinking feeling tonight after the Republican controlled House of Representatives could not get enough support from their own party to pass their own bill; not because I think it’s a good bill. I don’t. But this failure of leadership means that there will likely be no compromise with Democrats, and there will be no successful measure passed, and the country will likely default.
If the debt ceiling is not raised by Congress, Obama will be faced with a “Hobson’s Choice.” This is a choice where there are no good alternatives. And this crisis is entirely unnecessary – a contrived crisis manufactured in order to gain “leverage” and reduce the size of government. At least, that’s the generous interpretation given the statements of some of the House and Senate Republican leadership.
The alternatives still remaining for Congress are to pass a clean debt bill, compromise, or deliberately do nothing. I am reminded of Dorothy from The Wizard of Oz who, belatedly, discovered that all she had to do was click her heals together and say, “There’s no place like home.” It’s that easy to pass a clean debt ceiling bill. They could compromise with Democrats and Moderate Republicans forming a coalition in order to raise the debt ceiling.
As of now, the President has rejected the idea of invoking the 14th amendment to the Constitution which says that our debts shall not be questioned. Even if he were to invoke that, we could expect that he would likely be impeached by the TEA party controlled House of Representatives.
The rigid ideological position of the TEA party is still, at this late hour, focused on reducing the size of government. The goal of reducing the size of government sounds nice to many people until they see how it affects them. Before the last “almost” government shutdown which was resolved literally minutes to midnight, actions were taken to start the government shutdown, and you should have heard the ruckus.
Active duty pay was cut in ½ (they later received all of the money owed), and my anti-Obama relatives in the military were saying, “How could Obama do that!?”
When he was talking about perhaps not having enough money to pay social security checks if the debt ceiling was not raised, the elderly (and those who might have to be financially responsible for them) cried, “How could Obama do that?!”
The choices faced in this situation are all that and more. Someone’s checks aren’t coming. And you can expect a lot of bitching and moaning, and they will cry, “How could Obama do that?!”
The TEA party knows that Obama will be blamed, so why should they even consider raising the debt ceiling?
Congress has already reached a stalemate regarding the FAA, and about 70,000 workers are idle. Taxes that would be collected can’t be collected. The cost will be tremendous even assuming that they eventually pass the authorization for the FAA. That will be peanuts compared with what’s to come.
Every federal government related construction job, administrative job, teaching job and law enforcement job is on the line. We can at least guess how the available money might be distributed. Maybe the FBI and CIA would be paid (to keep the criminals and terrorists from having an open door), the interest on our debt will be paid (to avoid global panic and economic disaster), and, I think, Social Security will be paid.
But with $172 billion to pay $306 billion in expenses due, a lot of people will be idled. A lot of checks will not be paid. A lot of citizens will be hurt financially.
I can’t even fathom the consequences of a credit downgrade on interest rates, hiring and investment, but I’ll bet it won’t be pretty. With as many government checks not going out as are due, our buying capacity will be dramatically decreased, and there will be less stuff bought, less income, less profit, and ultimately fewer jobs.
The markets? Oh, lord that’s gonna hurt. I’ve already lost a bunch from the dropping market, and it will get a lot worse.
Much of the world has assumed that this crisis will be averted and all will sail on as usual. There is still hope, but it diminishes each hour that a compromise can’t be reached. The world, and the TEA party perhaps, expect the Democrats to cave. They have before again and again, but this time I sense something different. There is nothing left to cave into. The Democrats conceded every demand. Both deals considered have only spending cuts that amount to the amount that the debt will be increased (which is a totally arbitrary demand from the TEA party caucus). Increased revenues, even from the most wealthy, are not even being considered. There is nothing else left to give.
At this moment, and not until now, I fear that there can be no compromise. No deals will be wrought out of this hostage taking of the debt ceiling (and the American/World economy).
Perhaps a “good deal” was never the Republican agenda after all. Perhaps we should have listened to them when they said, “We will not vote to raise the debt ceiling.”
If this is some TEA party misunderstanding, miscalculation or blunder, maybe they will learn from their mistake. But how much will it cost us to pay for their mistake?
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