As of this morning, the fight over the next debt-ceiling deadline makes the transition from abstract to concrete.
A recent analysis found that Congress would have to act on the debt limit by late October or early November. It was vague, but nevertheless helpful in giving us a broad sense of the impending deadline. Today, however, policymakers and the rest of the political world got a specific date to circle on their calendars.
Treasury Secretary Jacob J. Lew sent a letter on Wednesday to congressional leaders informing them that they need to find a way to raise the debt limit by Oct. 17, when the department would run out of extraordinary measures to continue to pay the bills.Lew, who visited with Senate Finance Committee members last week, warned in his letter that brinksmanship with this deadline "could inflict even greater harm on the economy" than the debt limit impasse in 2011. He urged leaders to extend the nation's borrowing capacity without delay, knowing that Republicans will still seek some sort of deficit reduction package and a delay in Obamacare to do so. Lew also re-emphasized that President Barack Obama "will not negotiate" over paying the government's outstanding commitments.
For those keeping score at home, this means Congress, whether it wants to or not, will have to raise the debt ceiling over the next 23 days.
At a certain level, this abbreviated timetable comes as a mild relief. In 2011, when Republicans launched the nation's first-ever debt-ceiling crisis, the painful ordeal wreaked havoc on the U.S. economy, the U.S. political system, and global markets for months. Just having the debate -- the fact that a "fight" existed at all -- did severe damage to the nation, even though the ceiling itself was not breached.
With Republicans poised to hold the nation hostage all over again, we can take some comfort in knowing the self-imposed disaster will last a mere three weeks.
The next question, of course, is what's likely to happen over the next 23 days.
I'm of the opinion that there's cause for genuine alarm -- Democrats will not negotiate with those who threaten to harm Americans on purpose, but Republicans continue to insist they'll do exactly that, believing they have "leverage" (which is to say, the GOP believe Democrats care too much about the country to let Republicans hurt us on purpose, so Dems will have no choice to cave and meet GOP demands before the conservative lawmakers pull the trigger). Ezra and Chait are thinking along the same lines.
Brian Beutler, whose work I respect and enjoy, continues to argue that we're overreacting.
John Boehner doesn't want to default on the national debt. He's said he's not willing to allow it. And lucky for him, there are enough votes in the House to pass the clean (or nearly entirely clean) debt limit bill that comes back from the Senate. [...]The process might be loud, it might shake economic confidence over the coming few weeks. It's in Democrats' best interest to play up the dangers and Republicans' interest to play up their craziness until the fight is resolved. But the risk of default remains extremely low.
I sincerely hope that Brian's right and I'm wrong, but I continue to find his argument unpersuasive.
Boehner has "said he's not willing to allow" default? Yes, he has. But the weak House Speaker has also said he plans to make a series of non-negotiable demands in exchange for a debt-ceiling increase, and Boehner expects his demands to be met. Which version of the Speaker should we listen to?
For that matter, it seems pretty obvious that Boehner and other congressional GOP leaders aren't exactly running their own asylums right now. Boehner "doesn't want to default on the national debt"? This much is true. But is anyone prepared to make the case that the Speaker -- the one threatening to hold the debt ceiling hostage, promising his radicalized caucus that they'll be able to get what they want in this process if they just hang "tough" -- will have enough influence to pass a clean debt-ceiling extension over the next three weeks?
I'm skeptical.
Indeed, just two weeks ago, Politico reported this tidbit: "[I]n private discussions, GOP leadership aides acknowledge they have absolutely no idea how they'll lift the $16.7 trillion debt ceiling."
Got that? Republican leaders realize Congress doesn't have a choice here, but they also haven't the foggiest idea how to overcome far-right opposition to a step that must be taken.
Most folks -- on the Hill, on Wall Street, etc. -- assume policymakers will figure something out in time, and we can certainly hope they're correct. But watching Republicans play with fire, unsure how to put it out before you and I get burned, is some genuinely scary stuff.