At RedState, Michael Hammond makes a succinct five-point-case against Speaker John Boehner’s, R-Ohio, debt hike plan: 1) The Boehner plan is so similar to the Reid plan that its passage will lead to a compromise with no cuts beyond 2012, a commission that will endorse tax hikes, and a trigger to force those tax hikes; 2) A guaranteed vote on a balanced budget amendment is worthless; 3) If Tuesday comes and goes with only a shut-down of unessential government agencies, President Obama’s fear-mongering will be exposed; 4) Standard and Poor's is going to downgrade U.S. debt anyway; and 5) compromising now will ensure Obama’s reelection.
A few quick responses: 1) The trigger is weak and Senate Democrats want to get rid of it anyway in exchange for a larger debt hike. So there is zero danger of tax hikes; 2) A BBA with a super-majority tax hike requirement was never going to happen, but getting Democrats on record against it is worth more than zero; 3) Seeing Tuesday come and go without the Apocalypse arriving would be satisfying, but cutting government spending by 40 percent cold turkey would be economically painful and Republicans would be blamed; 4) S&P has since backed off their downgrade threat; and 5) A “Grand Bargain” would have helped Obama’s reelection chances. The Boehner plan becoming law just makes him look weak.
Conservatives in the House have done a tremendous job winning the maximum amount of concessions out of there existing leverage. But there is a limit to what just one half of one branch of government can accomplish.
Around the Bigs
The Washington Post, House GOP leaders put off vote on debt plan until Friday: Majority Whip Kevin McCarthy, R-Calif., told reporters around 10:30 pm that the House would not be voting on Speaker John Boehner’s, R-Ohio, bill to raise the debt limit till at least Friday morning. Rep. Tom Scott, R-S.C., who says he will vote no on the bill, says Republican leaders “are on the brink” of securing the votes they need for passage.
The Washington Examiner, House Rules Committee votes to give Boehner “maximum flexibility” to alter debt limit bill: Only a votes short of the 217 needed to pass raise the debt limit, the Republicans controlled Rules Committee voted 8 to 4 to give Speaker Boehner “maximum flexibility” to bring any negotiated changes to the House floor immediately. The vote opens up the possibility of a swift boat on any altered version of the legislation at any time.
The Hill, Conservatives angry over Pell Grant funding in Boehner debt bill: Increased Pell Grant funding is one reason some Boehner bill holdouts are citing as justification for their ‘no’ votes. The legislation directly appropriates $9 billion for Pell Grants in 2012 and another $8 billion in 2013.
Politico, Debt deal compromise suggested by Democrats: According to “Democratic officials familiar with the negotiations,” Democrats are willing to vote for a debt hike similar to the Boehner plan as long as the second debt limit tranche is automatic but revokable by a two-thirds vote of both chambers like the Minority Leader Mitch McConnell, R-Ky., plan once considered.
The Wall Street Journal, Treasury Faces Pressure to Detail Backup Plan: Thursday’s House Republican failure to raise the debt limit has put greater pressure on the Treasury Department to detail how payments will be prioritized when the federal government has to begin cutting spending by 40 percent beginning sometime after August 2nd. To avoid defaulting on U.S. government debt, the Treasury plans to prioritize its payments by ensuring that it will make a $29 billion interest payment to bondholders on Aug. 15. But Treasury still has not informed the millions of other payees who will and will not be paid.
Bloomberg, U.S. Contingency Plan Gives Bondholders Priority: An anonymous Obama administration official confirms that the U.S. Treasury will give priority to making interest payments to holders of government bonds when due if lawmakers fail to raise the debt limit by August 2nd.
The Wall Street Journal, Yen Rises on U.S. Debt Worries: The dollar fell to a four-month low against the yen after Majority Whip Kevin McCarthy, R-Calif., announced the House would not vote to raise the debt limit Thursday night. “I’d say 90% or more of people in the market have priced in expectations for the U.S. to avoid a default, but with this now down to the wire, there’s a real threat of sovereign downgrades regardless of the outcome,” a senior currency trader told The Journal.
The Cleveland Plain Dealer, John Boehner says he is not punishing Jim Jordan over debt-cut differences: Speaker John Boehner, R-Ohio, shot down rumors that Ohio Republicans were planning on redistricting Republican Study Committee Chair Jim Jordan’s, R-Ohio, seat out of existence in retaliation for opposing Boehner’s debt hike bill. “Jim Jordan and I may not always agree on strategy, but we are friends and allies, and the word retribution is not in my vocabulary.I look forward to continuing to serve with him in the U.S. House after the redistricting process in Ohio is complete, and for many years to come,” Boehner said.
The Chicago Tribune, CME Group calls tax situation ‘untenable;’ says it may exit state: The Chicago Mercantile Exchange is evaluating whether to move some operations to other states from Chicago to reduce its taxes. CME is considering moving to low-tax states like Texas, Florida, or Tennessee.
Obama: President Obama has lost ten points to a generic Republican candidate in Pew Research Center’s latest poll. In May, Obama was up 48 – 37, today he is up only 41 – 40.
Cato’s Chris Edwards shows that Boehner’s debt hike bill doesn’t actually cut spending, it only reduces future spending increases.
On her Facebook page, Sarah Palin tells Freshman Republicans that “we little folk” in “politico flyover country” are watching the debt limit debate closely to see if Republicans are living up to their principles. Just in case the warning was too subtle, she closes “P.S. – Everyone I talk to still believes in contested primaries.”
UCLA Law School professor Eugene Volokh succinctly explains why the left’s 14th Amendment debt limit argument is bogus: “Even if the government didn’t have the money to pay interest (and, again, it does have the money), it doesn’t follow that the president may exceed his powers to do that, just as he can’t take property without due process in order to do that. That the president has a constitutional duty to do something doesn’t mean that he can violate other constitutional provisions in order to do it.”
Greg Sargent reports that the White House’s number one policy goal in the debt limit end game is “putting an end to a situation in which the debt ceiling is being used as a Sword of Damocles hanging over the spending process.”
The Washington Post‘s Eugene Robinson says that liberals need “a Big Idea” if they don’t want to lose the next fight the way they lost the debt limit fight.
Yale Law School professor Jack Balkin identifies three ways Obama could bypass Congress if the debt limit isn’t raised, including: 1) print money; 2) sell assets; and 3) invoke the 14th Amendment.