At some point in early August, the dent ceiling will have to be raised by Congress or the United States will default on its obligations. Default is viewed by senior policy makers as very risky, to say the least. Many believe it would be a catastrophic mistake.
Stuart Rothenberg, who has been reliably reporting on Congress and Congressional politics for over 30 years, has a column today that assesses the risks for each party in the debt ceiling negotiations. It’s a column that is being read all over town. Some excerpts: The issue won’t be resolved in the next eight weeks…..
The nature of the Republican risk is obvious. If the GOP looks inflexible, excessively ideological and extreme, voters are likely to turn against it. This is more likely, of course, if Democrats look reasonable and emphasise their willingness to compromise. (Swing voters love the idea of compromise.) It’s also more likely if the most vocal and ideological elements of the GOP define their party.
But even partisan Democrats agree that their party faces a considerable risk if they look as if they are insufficiently committed to cutting spending. Indeed, merely by supporting an increase in the debt limit, Democrats play into an image that they are trying to change — that they are fiscally irresponsible…..
…..the only group of players that doesn’t appreciate the potential negative fallout from a deadlock is House Republicans, many of whom seem to think that failing to raise the debt limit wouldn’t be all that big of a deal. That view may well be delusional, but it gives them a great deal of power in any negotiations, since they don’t feel the pressure to act that others do.
You can read the full column here.