Reid Looking Forward To The 2011 Debt Ceiling Fight.

One problem with this tax cut deal is that it trades one hostage the GOP is holding for massive tax cuts for the rich and three additional hostages – the debt ceiling debate, the ending of benefits in 2011 and the debate over raising payroll and income taxes in 2012.  Like others, I have been wondering why the Democrats don’t want to get the debt ceiling extended now in this tax deal. Ezra Klein gets an answer from Reid’s office:

It’s that they simply don’t want to. “Let the Republicans have some buy-in on the debt. They’re going to have a majority in the House,” said Harry Reid. “I don’t think it should be when we have a heavily Democratic Senate, heavily Democratic House and a Democratic president.”

The theory goes something like this: Republicans will demand sharp spending cuts in return for lifting the debt ceiling. Let them. “Boehner et al have had the luxury of proposing all sorts of ideas that bear no relation to reality,” says Jim Manley, Reid’s spokesman. “Next year, they’ll have to lay it all out. No more magic asterisks, no more ‘we’ll get back to you.’ ”

In this telling, the debt ceiling vote represents a trap for Republicans more than an opportunity for Democrats. If Republicans want to cut spending, now’s their chance. But that means passing a package of spending cuts, which they may find less enjoyable than simply saying that Democrats should stop spending so much.

I don’t get this. Where’s the upside?

You force confrontations when you have something to gain from it, when the probable outcomes of the upside outweighs those of the downside.  I can’t imagine Reid, next April, is going to tell Boehner that Democrats won’t vote to raise the debt ceiling unless they get a vote on the DREAM Act or an extension of unemployment benefits or whatnot. If there’s only downside, why not cut the losses now?

Since they don’t want to do this now and instead want to see how it plays out next year, I see three rationales from the Democrats point-of-view:

Getting something non-budget: This is the “We won’t vote for the debt ceiling increase unless we get a vote on energy credits or whatever.” I doubt this is the case.

Getting something budget: There’s going to be a debt ceiling debate, the GOP will want to cut the deficit right there and then.  Democrats can use that opportunity to push for things they value. A tax on carbon, a millionaire’s tax bracket. etc.

Watching the GOP implode: This event will have the benefit of stressing or breaking the GOP tent in Congress early into the term. Boehner will have to be the responsible adult and crack down on the Tea Party types who want to provoke a crisis on the budget. This will embarrass them with the base and the media.

The first is a non-item, and I think the second is not going to happen.   If anything for the second case, they’ll be able to weaken the most absurd cuts in the GOP demands, but if that is the case why not just cut it off in 2010 and not worry about it?

All that is left is the option that they are hoping that this exposes the GOP early on as being not only an amateur act but also a danger to our economy – or worse, if it makes them look not “adult” or “responsible” – and that this can take some of the wind out of their sails.   That or there simply won’t be a fight.  It’ll just come and go with a simple vote.

I’m not sure.   I think it is very likely that Boehner keeps the group together to get a strong piece of flesh out of Obama and win the media narrative too.  Maybe the remaining Democrats will be stronger and more cohesive next year, and can take on this challenge.  Though it seems like a lot of downside for only limited upside.  I suppose I’m willing to take bets – your thoughts?

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2 Responses to Reid Looking Forward To The 2011 Debt Ceiling Fight.

  1. JM says:

    Given that the Democrats’ primary escalation strategy is “pre-emptive caving,” I share your view. This is probably from the same playbook that said the middle-class-only tax cut votes should be held off until after the election.

    The sad fact is that if the Dems were to take a firmer line against the Tea Party types, they’d probably fold like a cheap suit. Boehner’s main challenge is going to be holding his coalition together in the face of no victories. Unfortunately, the Dems seem poised to hand Boehner all the duct tape he needs.

  2. joyce smith says:

    Is Obama and wife, still part of the 1 percent? He wants the tax cut for himself.

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