US Fiscal: Another Twist, to the Same End

Published on October 10, 2013

Just a quick update to put into context the move this morning by House Speaker John Boehner to put a clean bill to extend the debt ceiling to November 22 (not to digress, but it strikes us as an ironic choice of an end date, being the 50th anniversary of the JFK assassination).

The speaker apparently decided this morning he has to get out from under the debt ceiling threat as he has always said he would to avoid any risks with the functioning of the treasury and collateral markets. In effect, he decided he could no longer wait to reason and cajole still resistant Tea Party dissidents and instead had to push ahead with a “right thing to do” debt ceiling bill.

The bill is being drafted and will be pushed through Rules by end of day today to limit amendments and to waive the three day debate guideline. The debt ceiling bill could be brought to a floor vote as soon as tomorrow.

There are still political calculations inherent to the clean, short debt bill that will play out in the sequence of what follows in the House vote and then, assuming it passes, in the Senate.

*** But the intention — and gamble — behind moving the debt ceiling bill first is to shift the political pressure the House Republicans have had to endure for the last two weeks onto the Senate. There, to pass a Continuing Resolution to end the shutdown, Senate Majority Leader Harry Reid may only be able to do so by agreeing to a framework going forward addressing the spending levels and entitlement reforms being laid out in the recent proposals made by Paul Ryan and long championed as a core GOP fiscal policy objective. ***

Flushing Out to the Right and Left

First, Boehner is flushing out the Tea Party to see once and for all just where their numbers are within the ranks of his House Republican conference. The won’t-listen-to-reason Tea Party bloc of votes could be as low as a dozen but may be 30 or even higher. The leadership can never be sure and will whip it hard, but has concluded there is only one way to find out. And clearing the deck on this front will make future votes that much easier or clear to manage.

Equally important, the bill is designed to flush out the Democrats. President Obama and Senate Majority Leader Harry Reid at least initially vowed the shutdown must be ended as well before there are “negotiations.” But this clean short term debt bill will soon determine how many House Democrats are willing to vote for the bill as is while the shutdown continues, but in effect passing that political hand grenade to the Senate and effectively making the Democrats equal to any further delays to ending the shutdown.

Democrats in the House are likely to want something for providing the winning margin in the House — a CR extension alongside the six week debt limit extension so that Boehner’s bill morphs into the President’s proposal yesterday. It is uncertain, though, if the Democrats will prevail as it remains firmly in Boehner’s hands as Speaker to put the final version of the bill to the floor for a take it or leave it vote.

But assuming the Democrats do provide what is probably going to be the necessary margin to pass the bill, the center of the political impetus will then be the Senate. Boehner and the House Republican leadership are gambling that a CR will be shaped and added to the debt bill in the Senate, to ensure the Democrats share in the political cost of any delays to ending the shutdown.

Senate Majority Leader Reid is a master of Senate procedure and no doubt is itching to respond forcefully. But what he does not have is time.

He is likely to find his one-year debt bill now stalled by the lack of the six needed Republican votes, and so may be forced to take up Boehner’s short debt bill — with some amended version of the equally short CR we highlighted this morning (see SGH 10/10/13, “US Fiscal: The Short Option”). If the Senate plays out in this fashion, it will be that much easier to pass it in the House now that Boehner has safely and finally navigated through the Tea Party blocking vote.

This will probably still take several moves to play out, and could and probably will go right up against the October 17th preliminary debt ceiling deadline. But late is better than never.

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