Boehner has stuck to his demand that any debt increase be accompanied by an equal dollar amount of cuts or changes, and backing down from that position would be difficult considering his caucus is likely to lose the fight on tax rates.
Plus, there would be no question which party allowed a default. And, this time around, Obama no longer has to worry about re-election. But there’s another risk for the Republican lawmakers — GOP primary voters and an array of outside groups such as the Club for Growth that are demanding members stick to their guns on cuts-for-debt.
“I hope their backs are very stiff,” said Club for Growth President Chris Chocola, who has been speaking with lawmakers on the Hill about the issue. “They seem to be focused on it, and that’s kind of the leverage they have.”
Obama’s comment that he wouldn’t “play” the game of negotiating with Republicans on the debt limit has buoyed the spirits of liberals in the Democratic Caucus, who doubt the GOP would have the ability to withstand the pressure a debt limit deadline would bring.
“The nation doesn’t have the stomach for it,” said Missouri Rep. Emanuel Cleaver II, chairman of the Congressional Black Caucus. “Everything we are hearing in the Democratic Caucus is he is holding fast to that, and we are pleased to hear it.”
Indeed, Democrats generally think the GOP is bluffing.
But Republicans say otherwise.
Sen. Patrick J. Toomey, R-Pa., brushed off the consequences of hitting the debt ceiling. “Is a temporary disruption worse than a full-blown debt crisis?” he asked. Toomey said Republicans should demand cuts in return for a debt increase and should be prepared to deal with the fallout. Toomey, a former Club for Growth president, said Obama could prioritize which government obligations to meet, thus preventing a default on interest on the debt.
That idea has been ripped by the administration — including Treasury Secretary Timothy F. Geithner — who has warned repeatedly that failing to meet other obligations for the first time in the nation’s history would still signal to the markets that the United States isn’t trustworthy. And Obama in 2011 cautioned that many other programs — such as Social Security payments — would be affected as well. Even under the prioritization scenario pitched by Toomey, almost $100 billion a month in bills would go unpaid. That is about 10 times the size of the sequester — automatic spending cuts that are scheduled to go into effect in January and that many lawmakers hope to avoid as part of any cliff deal. Additionally, $100 billion is enough to put a serious dent in the gross domestic product and crimp all manner of government services.
Democrats believe the consequences would be so dire that the GOP would effectively be shooting itself in the foot.
But Chocola said Republicans better stick by their threats. And he said Boehner should take a page from House Minority Leader Nancy Pelosi, D-Calif., and her successful push to enact health care reform when she was speaker.
“She knew it put her majority at risk,” he said. “She was willing to do that because she believed in it. Republicans can learn a lesson,” he said, noting that the health care overhaul remains the law of the land.
Chocola, like Toomey, said there is plenty of tax revenue coming in to prevent a default on the debt. “You may have some slow pay of our bills,” he said, but he added that interest payments are still a small sliver of the nation’s budget.