Boehner says no way US will default

Rick Moran
Speaker John Boehner, bowing to reality, appears ready to pass a debt ceiling bill even if only a small fraction of Republicans are in favor of it.

New York Times:

Speaker John A. Boehner has privately told Republican lawmakers anxious about fallout from the government shutdown that he would not allow a potentially more crippling federal default as the atmosphere on Capitol Hill turned increasingly tense on Thursday.

Mr. Boehner's comments, recounted by multiple lawmakers, that he would use a combination of Republican and Democratic votes to increase the federal debt limit if necessary appeared aimed at reassuring his colleagues -- and nervous financial markets -- that he did not intend to let the economic crisis spiral further out of control.

They came even though he has so far refused to allow a vote on a Senate budget measure to end the shutdown that many believe could pass with bipartisan backing. They also reflect Mr. Boehner's view that a default would have widespread and long-term economic consequences while the shutdown, though disruptive, had more limited impact.

[...]

Along with Senator Mitch McConnell of Kentucky, the Senate Republican leader, Mr. Boehner has long dismissed the idea that Congress would not act to prevent a damaging default, and President Obama on Thursday called a default "the height of irresponsibility." But the failure of the House and Senate to reach a deal ahead of the shutdown has raised questions of whether Republicans could be persuaded to join in raising the debt limit before the Treasury Department runs out of money about the middle of October.

His comments were read by members of both parties as renewing his determination on the default and came as the Treasury warned that an impasse over raising the debt limit might prove catastrophic and potentially result "in a financial crisis and recession that could echo the events of 2008 or worse."

This was inevitable, given the unknown consequences of blowing through the debt ceiling. Shutdown theater is one thing. Obama and the Democrats, as they did with the sequester, are grossly - even laughingly - overplaying their hand with the government shutdown.

But what makes the debt limit bill so problematic is that it would be unprecedented. Markets, businesses, ordinary investors have no idea what to expect if it happens. Whether or not you believe in the dire consequences laid out by the Treasury Department, or the far milder impact that some on the right are predicting, even the chance of some kind of meltdown has to be avoided. That's the message from bankers, market gurus, and international investors; why take the chance?

There are probably the votes to pass a "clean" budget bill as well, which is why Boehner is holding off until he gets the debt ceiling vote through. As long as the shutdown story is the federal government preventing veterans from visiting the WWII memorial and other unnecessary theatrics, rather than any pain being felt by ordinary citizens, Boehner will have leeway in keeping the government shut.


Speaker John Boehner, bowing to reality, appears ready to pass a debt ceiling bill even if only a small fraction of Republicans are in favor of it.

New York Times:

Speaker John A. Boehner has privately told Republican lawmakers anxious about fallout from the government shutdown that he would not allow a potentially more crippling federal default as the atmosphere on Capitol Hill turned increasingly tense on Thursday.

Mr. Boehner's comments, recounted by multiple lawmakers, that he would use a combination of Republican and Democratic votes to increase the federal debt limit if necessary appeared aimed at reassuring his colleagues -- and nervous financial markets -- that he did not intend to let the economic crisis spiral further out of control.

They came even though he has so far refused to allow a vote on a Senate budget measure to end the shutdown that many believe could pass with bipartisan backing. They also reflect Mr. Boehner's view that a default would have widespread and long-term economic consequences while the shutdown, though disruptive, had more limited impact.

[...]

Along with Senator Mitch McConnell of Kentucky, the Senate Republican leader, Mr. Boehner has long dismissed the idea that Congress would not act to prevent a damaging default, and President Obama on Thursday called a default "the height of irresponsibility." But the failure of the House and Senate to reach a deal ahead of the shutdown has raised questions of whether Republicans could be persuaded to join in raising the debt limit before the Treasury Department runs out of money about the middle of October.

His comments were read by members of both parties as renewing his determination on the default and came as the Treasury warned that an impasse over raising the debt limit might prove catastrophic and potentially result "in a financial crisis and recession that could echo the events of 2008 or worse."

This was inevitable, given the unknown consequences of blowing through the debt ceiling. Shutdown theater is one thing. Obama and the Democrats, as they did with the sequester, are grossly - even laughingly - overplaying their hand with the government shutdown.

But what makes the debt limit bill so problematic is that it would be unprecedented. Markets, businesses, ordinary investors have no idea what to expect if it happens. Whether or not you believe in the dire consequences laid out by the Treasury Department, or the far milder impact that some on the right are predicting, even the chance of some kind of meltdown has to be avoided. That's the message from bankers, market gurus, and international investors; why take the chance?

There are probably the votes to pass a "clean" budget bill as well, which is why Boehner is holding off until he gets the debt ceiling vote through. As long as the shutdown story is the federal government preventing veterans from visiting the WWII memorial and other unnecessary theatrics, rather than any pain being felt by ordinary citizens, Boehner will have leeway in keeping the government shut.