Saturday, January 19, 2013

I'll trade you one hostage now for two in three months

"Big news. Eric Cantor has just made it official: The GOP leadership is prepared to agree to a three month debt ceiling hike. This is a major de-escalation of the crazy and effectively means Republicans have all but taken the threat of default off the table completely."
- Greg Sargent, Washington Post
There's a critical piece of this story that I haven't seen anywhere: the Democratic response. Because the correct response is to thank the Republicans for their gracious offer, and counteroffer that the government have the power to borrow to cover all the spending that Congress has appropriated (since tax receipts are both seasonally variable and dependent at all times on the state of employment and the economy).
I think the consensus view is correct as far as it goes: the Galtian Masters of the Universe have told the Republicans to knock off Silly Season, and shooting the hostage is no longer seen (at least by Boehner, probably also Cantor and Paul Ryan) as a valid tactical move. But the Tea Party Caucus is not much known for listening to either reason or the GOP leadership, which is why the Democrats absolutely need to respond with a clear articulation of their initial negotiating position -- one very different from this offer to take more hostages in a few months.

UPDATE: We have statements:

 This proposal does not relieve the uncertainty faced by small businesses, the markets and the middle class. This is a gimmick unworthy of the challenges we face and the national debate we should be having. The message from the American people is clear: no games, no default.
The White House:
 The President has made clear that Congress has only two options: pay the bills they have racked up, or fail to do so and put our nation into default. We are encouraged that there are signs that Congressional Republicans may back off their insistence on holding our economy hostage to extract drastic cuts in Medicare, education and programs middle class families depend on. Congress must pay its bills and pass a clean debt limit increase without further delay.
 This is the correct response. When your opponent is in retreat, don't stop pushing.

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