5 Disasters To Expect If Congress Doesn’t Raise The Debt Ceiling
While the American economy has been chugging along through most of 2013 in a recovery that has been great for investors and painful for workers, the House GOP has been plotting.
House Budget Committee Chairman Paul Ryan (R-WI) convinced a cabal of powerful Republicans — which calls itself “the Jedi Council” — in February that battling over the debt limit right after the president was re-elected would be “suicide.” Instead, they would leave the sequester’s automatic cuts in place. In exchange for their patience, Ryan would introduce a new version of his already draconian budget that balances within 10 years while gutting Medicare, Medicaid and Obamacare, though the taxes that pay for them are all left in place. Then Republicans would prepare themselves to fight for Ryan’s cuts at the end of summer.
That fight is set to begin in September.
According to The National Review‘s Jonathan Strong, “…leadership will follow the original plan to force a debt-ceiling brawl.” Republicans recognize the incredibly shrinking budget deficit will make battles over the so-called debt limit far less frequent. So they’re more determined than ever to put the budget on a “path to balance” before the debt limit is hit in mid-October. To do this, they’re willing to cut anything — except, of course, tax breaks for the rich and corporations. By promising this, the House leadership hopes to get their caucus to keep the government funded after September 30 without a standoff they know they can’t win over Obamacare.
The problem for the GOP is the president has vowed not to negotiate over the debt ceiling and is unwilling to consider any large budget deal that does not include new revenues.
The problem for the president and America is that he has negotiated before over the debt limit in 2011, when the GOP threatened his re-election with a financial meltdown and a default on the U.S.’s debt. And if Republicans get the sense they’ve been tricked, it may become impossible for Boehner to present any debt limit deal that wouldn’t cost him his job.
Even toying with the debt limit in the aftermath of a financial crisis has costs. So as Republicans prepare to do exactly that, here’s five things to expect if this trillion-dollar game of chicken goes terribly wrong.