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Process Reforms the Likely Throw-In to Debt Limit Increase

Well, it's not like there's a gun to your head.... (photo: tylerdurden1)

As predicted over the past week or so, the debt limit fight seems to be coming down to process reforms. Rather than asking for a specific level of cuts, Republicans in the House are demanding some kind of budget cap or trigger as a condition of passage.

In the most recent budget battle — over a six-month spending bill — Republican leaders carefully avoided threatening to shut down the government. Now, Cantor says he’s ready to plunge the nation into default if the GOP’s demands are not met. People close to Cantor say that he hopes to make clear that small concessions from Democrats, including President Barack Obama, will not be enough to deliver the GOP on a debt increase […]

Republicans are floating a wide range of major structural reforms that could be attached to the debt limit vote, including statutory spending caps, a balanced budget amendment and a two-thirds vote requirement for tax increases and debt limit increases. Liberals want a “clean” vote to raise the $14.3 trillion borrowing limit.

What we know is this is all nonsense. Republicans promised an increase in the debt limit in a meeting with the President. Everything else makes for a nice play, but like in ancient Greece, all the spectators know how it will end.

However, one of the potential process reforms that would appear to satisfy the fake demands of the GOP could be a trigger along the lines of what the President proposed last week in his budget speech. That could end up being the solution, which Democrats will paint as a major sacrifice even though their leader was its initial author.

A trigger, which would force mandatory cuts in spending or increases in taxes if the deficit rose above a certain target, could either be inconsequential because of exceptions and work-arounds or legitimate and a particularly bad idea. It depends on the details. But the White House has a hand to play here that they’ve clearly decided against. They could just insist on an increase and let the Chamber of Commerce and Wall Street tycoons browbeat the Republicans into delivering it for them. Instead, we get this kabuki dance, which will end in some kind of trigger or other process reform. Which, because it’s a cornerstone of Obama’s fiscal policy speech, is pretty much what they want.

CommunityThe Bullpen

Process Reforms the Likely Throw-in to Debt Limit Increase

As predicted over the past week or so, the debt limit fight seems to be coming down to process reforms. Rather than asking for a specific level of cuts, Republicans in the House are demanding some kind of budget cap or trigger as a condition of passage.

In the most recent budget battle — over a six-month spending bill — Republican leaders carefully avoided threatening to shut down the government. Now, Cantor says he’s ready to plunge the nation into default if the GOP’s demands are not met. People close to Cantor say that he hopes to make clear that small concessions from Democrats, including President Barack Obama, will not be enough to deliver the GOP on a debt increase […]

Republicans are floating a wide range of major structural reforms that could be attached to the debt limit vote, including statutory spending caps, a balanced budget amendment and a two-thirds vote requirement for tax increases and debt limit increases. Liberals want a “clean” vote to raise the $14.3 trillion borrowing limit.

What we know is this is all nonsense. Republicans promised an increase in the debt limit in a meeting with the President. Everything else makes for a nice play, but like in ancient Greece, all the spectators know how it will end.

However, one of the potential process reforms that would appear to satisfy the fake demands of the GOP could be a trigger along the lines of what the President proposed last week in his budget speech. That could end up being the solution, which Democrats will paint as a major sacrifice even though their leader was its initial author.

A trigger, which would force mandatory cuts in spending or increases in taxes if the deficit rose above a certain target, could either be inconsequential because of exceptions and work-arounds or legitimate and a particularly bad idea. It depends on the details. But the White House has a hand to play here that they’ve clearly decided against. They could just insist on an increase and let the Chamber of Commerce and Wall Street tycoons browbeat the Republicans into delivering it for them. Instead, we get this kabuki dance, which will end in some kind of trigger or other process reform. Which, because it’s a cornerstone of Obama’s fiscal policy speech, is pretty much what they want.

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David Dayen

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