Tuesday, January 8, 2013

Forget 'Mint the Coin' as Debt Ceiling is a Paper Elephant

     I have no problem with mint the coin or going constitutional-using the 14th amendment to argue that Congress cant refuse to raise the debt ceiling. While Kevin Drum argued that no judge would let 'mint the coin' stand as judges do consider the actual intent of legislation and not just the literal letter, the commentator-who's name I forget-was right who pointed out that if they consider intentions what judge would blithely render a ruling that would lead to U.S. default and plunging us into a deep recession over and against the expressed wishes of the United States?

   Yes, as Krugman and Greg Sargent argue, while mint the coin may be a gimmick it's nowhere near as absurd or destructive as the GOP's playing debt ceiling chicken. 

   It seems that mint the coin continues to pick up steam.

   Having said that, I'm coming to think that it really isn't necessary as the GOP is coming to realize it has no leverage on the debt ceiling.

   The reality is they don't have any leverage with the debt ceiling and the White House strategy is just to call them out. There's no need to make any threats about the constitutional option or minting a coin as doing so would suggest the GOP has leverage it in fact doesn't. Newt Gingrich, the Wall Street Journal, and other Republicans are telling them that this is not the way to get what they want.

   The Obama strategy is to treat this threat as totally idle. They aren't negotiating. At some point Congress will have to raise the debt ceiling. GOP Congressmen will have to vote to raise it. If they don't it's all on them. As Scott Sumner says, if they do this they lose the House in 2014, gerrymanders or no.

   Talking about the platinum coin in a sense dignifies their idle threats too much. What came out in that interview Boehner had with Steven Moore is that Boehner is talking about the sequester as being the ultimate leverage. This, too, I think is an illusion. The GOP hates the Pentagon cuts as much as the Dems hate the discretionary spending cuts so they'll have to compromise to prevent these cuts as well.

  As for the idea of a monthly debt ceiling fight, Boehner is dreaming here, no way does that happen.

  " But this should be read, if anything, as a sign of weakness. It’s essentially a concession that the debt limit has to be raised; Boehner is merely threatening to drag his feet as he allows the inevitable to happen. But it’s just nonsense. The business community is not going to go for such a course of action, to put it mildly. And it risks dragging the country through monthly threats of default, a terrible thing to inflict on the American people."

    "Ultimately, what this highlights is the utter incoherence of the GOP position on the debt ceiling. Republican leaders know they have to raise the debt limit — they know the threat not to do this isn’t credible, and they need to signal to the business community that they don’t view this option seriously — yet they want to continue to use it as leverage to get what they want, anyway. Hence Boehner’s above dance. And Boehner isn’t the only one: On Face the Nation yesterday, when Mitch McConnell was asked directly whether Republicans would really withhold support for a debt ceiling hike if it weren’t paid for by spending cuts of equivalent size, he repeatedly refused to answer."

    "Boehner’s and McConnell’s equivocations will only embolden the White House and Democrats to stick with their strategy of refusing to negotiate over the debt ceiling, and treating the Republicans’ refusal to commit to raising it up front as their problem, and their problem only."

     The reality is that debt ceiling chicken 2.0 is an idle threat and there's no need for the White House to invoke the 14th or mint a coin. Just treat it like the idle threat that it is.

     So where is the GOP leverage? There is none. Bill Kristol got this right that first Sunday after the November 6 GOP debacle. Elections have consequences. There's no silver bullet that will help the GOP subvert that. Any attempts to try will only cause them more losses later.

     So there is no debt ceiling showdown. The White House has more important things to think about like gun control and immigration reform. It's looking like the White House is already front and center on gun control.

    So McConnell was quite wrong on Sunday when he said that what matters right now is not gun control but the debt ceiling fight. There is no debt ceiling fight, so there are no priorities to juggle.




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