The Derp Ceiling

The House Republicans still want their pound of flesh for lifting the debt ceiling, but can’t seem to agree on what that flesh should be:

On Thursday, however, two ideas gained traction, with dozens of Republicans predicting that versions of the pitches could hit the floor next week once House members return to Washington. At the top of the list: a proposal to link a one-year extension of the debt ceiling to a restoration of recently cut military benefits. Another popular option is tying the “doc fix,” which would alter the way doctors are reimbursed for Medicare treatments, to an extension. Changes to the federal budget that would reduce fraud or mandatory spending levels also have been mentioned.

Danny Vinik explains the most popular option:

House leadership is considering undoing the changes that the budget agreement made to the cost-of-living-adjustment (COLA) for military pensions. Of course, doing that costs money – you didn’t think that Republican debt ceiling extortion actually had something to do with the deficit, did you?

So, how are they going to offset the cost? Nothing has been settled on, but Politico’s Jake Sherman and Burgess Everett report that they may use a budget gimmick known as “pension smoothing” to do so. Pension smoothing allows companies to underfund their pensions in the next few years, boosting their profits, and thus increasing government revenues. Thus, the Congressional Budget Office (CBO) shows this as reducing the deficit over the next decade. But beyond that, it increases the deficit, because those firms eventually have to make those pensions contributions, reducing their future profits and therefore government revenue as well.

Kilgore notices that fiscal restraint is no longer the point:

After years of linking the debt limit vote to proposed spending cuts (or mechanisms for forcing spending cuts, from sequestration to a constitutional balanced budget amendment), now suddenly you have Boehner talking about demanding increased spending in exchange for votes to accommodate more public debt. Whatever else this represents, it shows Boehner being more interested in registering a “win” for his conference than in making a coherent argument for reducing both spending and debt.

How Allahpundit sees the GOP’s game:

Reid also took a hardline “no negotiations” approach during the shutdown, you’ll recall, rejecting a bunch of House bills that would have restored funding for discrete parts of the government but not for ObamaCare. Fund everything or we’ll fund nothing, he insisted. The sole exception: He passed a bill right before the shutdown began to keep money flowing to the military so that troops wouldn’t miss a paycheck. Boehner’s counting on the same thing happening now.

Bernstein blames the GOP’s radicals for obstructing responsible policymaking:

Instead of “forcing” Democrats to accept something they oppose, Boehner now is seeking to use something many Democrats want. That’s what a normal party does: use marginal legislative leverage to attempt to win marginal gains. Of course, Democrats could still hold out for a clean debt limit increase, or they could pile on their own matching demands (say, the minimum wage, or restoring recently-passed cuts in food stamps, or any other Democratic priority that’s popular). Normal parties would then negotiate their way to a win-win deal, because policy doesn’t have to be zero-sum.

But that wouldn’t satisfy Republican demands for extortion for the sake of extortion.

Chotiner isn’t too worried:

[E]ven if Obama were to fold, there is something else that has rendered the debt ceiling hostage racket useless. John Boehner, who quite obviously does not want to rely on the good graces of Kevin Costner, has shown that he won’t let the country default. Not only is Obama unwilling to pay the ransom, then, but Boehner is unwilling to harm the economy. It’s sort of like when someone gets kidnapped in a PG-rated movie: you know nothing too bad will be allowed to occur.