With regard to tonight’s House vote to raise the federal debt limit, let’s see if I understand this correctly.
House Republicans oppose a “clean” debt limit increase – that is, legislation that would do only one thing: raise the limit on allowable federal debt. They insist that Congress must accompany any debt limit increasewith deep spending cuts and, depending on whom you ask, perhaps also a cap on annual federal spending, major reforms to Medicare and other entitlements, and a balanced budget amendment to the U.S. Constitution.
Republicans control the House. They run the committees; they decide what comes to the House floor. With 240 members in the 435-member body, they have more than enough votes to block anything they don’t like.
But, somehow, that’s not good enough. They have to show everyone – President Obama, congressional Democrats, the media – that a “clean” debt limit increase can’t pass the House. That’s why they’re staging tonight’s vote. They apparently believe that their word isn’t good enough, so they want to prove with a vote that they oppose a clean debt limit increase.
But while House Republicans know that those in Washington see this as a political show, they’re worried that, for some reason, the folks who run the financial markets in New York won’t. They’re concerned that, with the upcoming vote, the bond markets will come to believe that Congress won’t ever raise the debt limit – or at least not before a possible default by early August.
That’s why they plan to hold the vote well after the market closes late this afternoon. They don’t want those dopes in New York to get the wrong idea.
Interestingly, they’re apparently not concerned about what will happen when the markets open tomorrow morning. That’s because House Republican leaders previously assured financial executives that they eventually will provide the needed votes before the government would ever default. They’re just holding out now for the biggest possible spending cuts they can get from their negotiations with the White House and congressional Democrats.
“Wall Street is in on the joke,” R. Bruce Josten, the U.S. Chamber of Commerce’s savvy executive vice president, told the New York Times today.
So, if I understand the House GOP calculation correctly, Wall Street knows enough not to worry in the morning. But, somehow, it may not know enough not to worry if the vote took place before the market closed today.
But it all begs another question: Why would House Republicans play games with the investments of millions of people that rise and fall with stock prices as well as with the nation’s creditworthiness?
Lawrence J. Haas is former Communications Director to Vice President Gore and, before that, to the White House Office of Management and Budget. He's now a public affairs consultant who writes widely about foreign and domestic affairs, including fiscal policy.
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