Republicans have been playing a double game with the debt limit debate. On one hand, it’s hard to imagine GOP members of Congress actually blocking a measure that would raise the debt ceiling, because that would lead to sudden, dramatic reductions in government functions: there might not be money for Social Security payments, Medicare checks, military salaries and more. Worse, confidence in US Treasury bills would be seriously wounded if the debt ceiling isn’t raised by August 2, meaning economic catastrophe. Voters would blame Republicans for this economic catastrophe, polls show, and House Speaker John Boehner was warned by Wall Street executives in no uncertain terms that he could not allow this situation to occur.
At the very same time, this nightmare scenario is the only leverage Republicans have in the debt ceiling debate. They’re asking for a whole host of policy changes—from dramatic spending cuts to radical changes to entitlement programs—that would otherwise be non-starters with Democrats in Congress and the White House, but Republicans are refusing to vote for a debt limit increase unless these policy changes are approved. “I must be convinced we have wrung every nickel of spending out of this,” Representative Michael Burgess told World Net Daily.
So far the strategy has worked well for Republicans. Bipartisan talks between the administration and House majority leader Eric Cantor produced tentative agreements to cut $1 trillion from the budget, with Vice President Joe Biden saying he believed the cuts would total as much as $4 trillion. A mandatory and enforceable spending cap may be enacted. Democrats are insisting that tax increases be part of the deal—but only 17 percent of it. The tax increases are targeted to particularly egregious areas, like ending exemptions for private jets or changing rules that allow hedge fund managers to count their income as capital gains, and even though the Bush tax cuts are the number-one driver of the debt, the White House will not insist that a deal that repeals or changes them.
Meanwhile, Obama and Boehner are photographed playing a friendly, back-slapping round of golf. Nothing to see here, folks—the US government is functioning properly.