If everyone understood what the debt ceiling really is it would be a non-issue. The GOP wouldn’t be able to take it hostage.
— Ray Lawson (@Lawsonbulk) September 13, 2013
The House GOP is demanding that, in order to fund the federal government and raise the debt ceiling, Democrats agree to defund Obamacare. Chait contextualizes the threat:
Boehner isn’t proposing to attach a perfunctory debt-ceiling hike to “bipartisan solutions,” as has happened in the past. He is proposing that the opposition party extract unacceptable conditions as the price of lifting the debt ceiling. That is an unprecedented demand. Under the Bush presidency, Democrats objected that tax cuts had created [an] unsustainable fiscal position for the government, but it never even occurred to them to threaten to trigger a debt default to force Bush to repeal his tax cuts. Before 2011, the debt ceiling was an occasion for posturing by the out-party and was sometimes raised in conjunction with mutually agreeable policy changes, but the opposition never used the threat of default as a hostage.
Ezra hopes that House Republicans will opt for a government shutdown rather than a default on the nation’s debt:
If the GOP needs to lose a giant showdown in order to empower more realistic voices and move forward, it’s better that showdown happens over a government shutdown then a debt-ceiling breach. A government shutdown is highly visible and dramatic, but it won’t actually destroy the economy. So an “optimistic” case might be that there’s a shutdown for the first few days of October, the GOP gets creamed in public opinion, the hostage-taking strategies of the party’s right flank are discredited, and Washington is at a much better equilibrium by the time the debt ceiling needs to be raised.
And yes, I realize that naming that tornado of lunacy the “optimistic” outcome is enough to make anyone pessimistic about the state of American politics. Good. You should be pessimistic about the state of American politics.
Barro notes that Republicans could defund Obamacare if they didn’t care about the consequences:
Establishment Republicans point out that the “defund Obamacare” strategy is doomed. If Republicans shut down the government over a demand that Obamacare be defunded, they’ll become hugely unpopular, and then they’ll eventually “have” to reopen the government on Democrats’ terms, with Obamacare still going into effect and more money being spent across the government than Republicans could have otherwise demanded.
But why does becoming hugely unpopular mean you have to fold? If House Republicans are really and truly willing to die on the hill of defunding Obamacare, they can do it. Nobody can make them bow to popular opinion and pass a continuing resolution that funds Obamacare implementation. House Republicans can shut down the government all the way to January 2015 and force a default on government bonds if they have the resolve to do so. They would tank the economy and lose the 2014 elections in the process, but the important victories do not come without costs.
Cohn focuses on the Republican leadership:
Conservatives seem determined to provoke a crisis, whether it’s over funding the government past September 30 or increasing the Treasury’s borrowing limit. If that happens, Boehner will face a choice. He can stand by while government services and the economy suffer—or, as Greg Sargent recently suggested, he can “cut the Tea Party loose, and suffer the consequences.” Yes, the consequences might include Boehner losing his job as speaker. Those are the kinds of risks real leaders take, in order to serve the public.
Yglesias expects crisis the pass but not before much damage is done:
[E]ven under that relatively rosy scenario where nothing shuts down and nobody defaults on any payments we’re talking about a protracted months-long period of political crisis that could badly hurt consumer confidence and other areas of the economy.