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Thursday, October 27, 2016

Aug. 5 (Bloomberg) — Democrats and Republicans, bracing for a game of chicken over a possible government shutdown and a debt-ceiling default, should rewatch the 1955 movie Rebel Without a Cause, starring American icon James Dean.

A thug challenges Dean’s character to race their stolen cars toward an abyss. The first driver who jumps out of his speeding vehicle is a coward. Dean leaps just as his car is about to go over the cliff; the other guy’s leather jacket gets ensnared in the door handle, and he plunges into the void.

In Washington, both sides anticipate a huge fight this autumn over the budget, the mandatory spending cuts under the so-called sequestration and the debt ceiling. They’re expecting the other guy to jump first.

House Republicans think President Barack Obama is bluffing when he says he won’t negotiate on lifting the debt ceiling. They contend that the president’s position isn’t nearly as strong as it was at the end of last year, when the tax cuts enacted under President George W. Bush were about to expire. Obama, who had lots of leverage then, got half a loaf.

The White House recalls Speaker John Boehner’s discomfort with the game House Republicans played with the debt ceiling in 2011, which hurt both the economy and their party. Privately, they say that Boehner doesn’t wish to wage that fight again when the limit is reached late this year and that his demand that any increase in the debt ceiling be matched by comparable spending reductions is a bluff. That position is unacceptable to Obama and Democrats.

The stakes are high in this game of chicken; a miscalculation could send shock waves through the economy.

The probability is that any budget deadlock, which could force a government shutdown and action on the much-discredited across-the-board sequestration cuts in defense and non-defense discretionary spending, will be postponed beyond the Oct. 1 deadline. Then, everything, perhaps including any tax reform initiative, will be thrown in with the debt-ceiling increase sometime in November.

There were plenty of private partisan and bipartisan conversations before the congressional recess, which began August 2. Some of these discussions will continue this month. No one is confident of the path, much less the outcome.

The early budgetary battle lines for the fiscal year that begins Oct. 1 have been drawn, and the two sides are almost $100 billion apart. Neither starts from a position of strength. The White House has made little progress on its insistence on additional revenue. House Republicans had to pull a spending bill containing big cuts from the floor last week for lack of votes. It is relatively easy for most Republicans to support a scaled-back budget concept; actually cutting programs is tougher.

Much of the negotiations when Congress gets back in September are likely to focus on the sequestration, which was adopted only because any agreement on regular spending measures collapsed. The sequestration is indiscriminate, makes for poor policy and is ridiculed by most members of Congress, from defense hawks to domestic policy progressives. It’s just that they can’t agree on a replacement, as House Republicans continue to pretend that the Pentagon will largely be spared.

Treasury Secretary Jack Lew made clear a week ago that any changes to the sequestration had to equally affect non-defense discretionary cuts as well as defense. There are a number of senators, from both parties, who would support such a deal.

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Copyright 2013 The National Memo
  • docb

    This is NOT a both sides deal..The repub baggers are threatening to do what they did before and got the US a credit DOWNGRADE and $95 billion in extra interest charges

    Which helped their , repub baggers, approvals drop like a stone to 7% and labeled them as Don Nothing Dead-Enders for decades! Childish and obdurate!

  • Dominick Vila

    The main differences between James Dean’s movie and the threat of a government shutdown and defaulting on the debt is that the latter is not a movie, and that only one side of our government is interested in destroying our economy and our international credibility.

    • TZToronto

      Well, we all know what happened to James Dean.

  • Lovefacts

    What’s really stupid about this threatened action is that even if the Republicans succeed, it won’t stop Obama Care or Medicare or Social Security or any of the other entitlements. Why? Because the funding for the entitlements falls under discretionary spending and won’t be affected by the stoppage. Who will it hurt? Their base. Why? Because the stoppage will curtail all government jobs and contracts and that includes not paying our military.

  • disqus_ivSI3ByGmh

    One thing many posters have missed – there are a large number of Republicans in the current Congress who would have no problem seeing the government go into default. As long as Boehner espouses the DeLay/Hastert doctrine of not calling for a vote unless he is sure of carrying the measure by Republican votes alone, this Congress is continually doomed to failure. The days of the Tip O’Neill bi-partisanship went out the window once Newt Gingrich became Speaker and Tom DeLay became Majority Whip.

  • metrognome3830

    Ted Cruz, starring in the new movie, “Rebel Without a Clue.”

    • [email protected]

      I love your comment. I am praying that he gets the Republican nomination for President even though he was born in a foreign country, but hey he is a Republican and for them no problem.

  • charleo1

    I don’t know what’s to be done about the GOP. Nobel Prize winning economist,
    Paul Krugman, calls them dysfunctional, and dangerous. I do not disagree. In fact,
    I would call them sell outs, and traitorous! I also believe their supporters are being
    made so hyper partisan-i-zed, over the economy, the rising debt, fears about their
    healthcare, and let’s face it, a Black President, who’s been demonized beyond
    belief. That they have completely missed the warning signs. The Party they believe
    they are supporting, is being taken apart limb by limb, right before their eyes. I also
    think it is necessary to listen to them, the insurgents, the frauds, for lack of a better
    word, for them, very closely to discern their true intentions. For example, after the primaries, when Romney was desperately trying appeal to whoever these cretins are, said his solution to the housing crisis, was to foreclose on the present owners, have a hedge fund, or other wealthy investors buy huge numbers of properties, (for pennies on the dollar, no doubt.) Then, allow the families to stay on as renters. Now, isn’t that nice? T-Party, all the way! But something an American, with the best interests of the Country in mind would even think of? Do we really believe the Country would be better off, if those millions of former homeowners, many who have managed to save their homes, were now renters? If so, in what way? Or those now working at GM, and Chrysler were working at Wal-Mart, part time, and applying for food stamps to feed their families? I ask you? In what circumstance would have letting the car companies close, have been in the best interests of American workers? Taxpayers? Ending the recession? The Federal Debt? Confidence in ourselves? In getting back to a strong Middle Class, with the opportunities we enjoyed as children? No, not in just GM, and Chrysler. But the idea that we help each other to hold on to what we’ve got. To hold it all together, until the good times return. That is not, in my mind anyway, allowing it all to fall into the abyss, and a hedge fund picking up the pieces of everyone’s American Dream. Then allowing us to rent it from them by the month.

  • Stuart

    Time to break out the trillion-dollar coin again.

  • tax payer

    If everyone made an effort to work there would be not need to help the poor, but that’s never going to happen in this country.