The political and finance worlds are abuzz with “September angst.” And in Washington, the angst is looking like it will be pushed back — but it could be much more daunting than originally thought.
That’s because House Republicans and aides are signaling — according to The Washington Examiner’s Conn Carroll and National Review’s Robert Costa — that they will shift focus from using a potential government shutdown as leverage to negotiations over the debt ceiling.
Here’s the gist, via Costa:
Sources tell me the House GOP will probably avoid using a shutdown as leverage and instead use the debt limit and sequester fights as areas for potential legislative trades. Negotiations over increasing the debt limit have frequently been used to wring concessions out of the administration, so there may be movement in that direction: Delay Obamacare in exchange for an increased debt limit.
Under this scenario, the GOP would pass a 60-day continuing resolution that keeps the government funded at existing levels under sequestration through the end of November — right around the time the debt ceiling will need to be raised. Then, House leadership would use Democrats’ wishes to get rid of sequestration levels to extract concessions.
It’s unclear, exactly, where the Affordable Care Act would fit into this. Republicans could plausibly tie in delays in certain parts of the law — which they still believe is the best strategy at eventually toppling the law altogether — to certain roll-backs in sequestration-level funding, or to some kind of hike in the debt ceiling.
As The Washington Post’s Greg Sargent points out, this represents a very strategic risk for House Speaker John Boehner.
After the fiscal cliff deal in January, Boehner said in an interview with the Wall Street Journal that he did not view the debt ceiling as the “ultimate leverage” in budget talks with Obama.
He said that the sequester cuts would be better leverage, and his gamble paid off big time. Republicans raised the debt ceiling last time, the sequester kicked in, and, so far, the doom and gloom predicted by the Obama administration hasn’t been felt in large part.
Going back to making the debt ceiling a focal point represents a risk. The 2011 fight pummelled the Republican image, and it led to a downgrade in the nation’s credit rating.
Sargent also points out that the negotiations on Obamacare would have to come after enrollment in insurance exchanges begins on Oct. 1. In essence, Republicans would be demanding a delay in Obamacare implementation as it is being implemented, in exchange for not letting the country default on its obligations.
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