Even by DC's standards, the past 2 days have been crazy:
1. The Republicans (especially Speaker Boehner) wasted 48 hours passing a debt ceiling bill by a 1-vote margin that has no chance of becoming law - the Senate killed it just a couple hours after the House passed it. I don't understand how Republicans ever thought that this would become law - both the Senate Democrats and the White House said this bill was dead on arrival - did they think that passing a bill by a 1-vote margin would somehow make the Senate and White House buckle at the knees? The Republicans have already made several symbolic debt ceiling votes - why the need for another one? Do they really not realize that, for the Democrats, a default (or, more likely, a more creative solution that runs around Congress) is a better gamble than any of these terrible "offers" from the Republicans?
2. For some reason I don't understand, Speaker Boehner decided to take a purely symbolic debt ceiling vote and turn it into a referendum on his leadership. He pushed and pleaded and cajoled and arm-twisted and begged the Tea Party faction of the Republicans in the House to go along with his plan - and he failed. In the end, he failed. He had to give up and attach (another) balanced budget amendment provision to his debt ceiling bill in order to appease the Tea Party faction to get a purely symbolic bill to pass the House. Even Bill Kristol called this a "pointless and embarrassing gimmick to try to secure a last-gasp victory on the House floor." I really have no idea what made Boehner think, a few days ago, that this was a good idea.
3. As Dana Milbank put it:
And from Nate Silver:
The Washington Post even declared that Boehner had the worst week in Washington. I'd tend to agree.
I'm still trying to work out what all this means - I suspect we won't know for quite a while, but I'll make a few educated guesses. (Yes, against my own better judgment, I'm going to try to predict the future - we'll see how that works out for me.)
1. I think this episode shows that Speaker Boehner cares more about holding on to his Speakership than achieving his own policy agenda or doing what is right for America. If Boehner really cared most about reducing government spending and/or reducing the deficit, he should have taken the Grand Bargain offered by the White House (and avoided both a US default and US debt downgrade in the process). He said "no" to appease the Tea Party faction in the House, but they did not repay him for the favor. However, if he wants to remain Speaker, he has little choice but to do his best to appease the Tea Partiers.
2. Strangely enough, this episode has made a U.S. default LESS likely, though the final outcome depends greatly on parliamentary mechanations in both the House and Senate this weekend (which I admit I don't fully understand, so I could be completely wrong). This episode has shown that if Boehner is going to pass ANY legislation that can possibly pass the Senate and White House, he has to work with the House Democrats - any legislation that has the approval of the Tea Partiers in Congress is so odious to Democrats that it has no chance of becoming law. Since a default would be so calamitous (and I'm pretty sure Boehner is smart enough to know this, partisan rhetoric aside), I suspect that the Senate will pass Reid's plan (or something close to it), and that bill will pass the House with broad Democratic and some moderate Republican support - and if it doesn't, then the U.S. will default, because there won't be time to send another House bill back to the Senate. Personally, if I were the Democrats, I would take advantage of this situation and rescind ALL offers and demand a clean hike in the debt ceiling, but I doubt the Democrats will take that approach - because I think that a lot of the cuts in the Reid plan are cuts that moderate Democrats and the White House are glad to make. Many of those cuts will undermine the economic recovery, however, making Obama even more vulnerable in 2012. Some are even calling Obama an underdog already. From an electoral strategy position, I'm starting to think that Obama invoking the 14th amendment, minting $1 trillion coins, or destroying U.S. Treasuries held by the Fed would all be better strategies for Obama than a deal that includes trillions of dollars in cuts. Maybe Obama could announce the alternative strategy of his choice by showing everyone this video in which all of the people currently insisting on huge cuts in exchange for raising the debt ceiling defend past "clean" increases in the debt ceiling as a matter of good public policy:
3. At the same time, this episode has made it more likely that the federal government will shut down on October 1, 2011, perhaps for several weeks. (This will suck for me, as a federal employee.) Since Boehner is so keen to keep his job, he will have to keep introducing legislation that is ultra-conservative enough to please the Tea Partiers in Congress - legislation that will have no chance of becoming law. I would think that this episode has finally demonstrated to the Senate Democrats and White House that it is pointless trying to negotiate with the Republicans as a whole - instead, Senate Democrats and the White House should, in the future, write legislation that can win broad Democratic support in the House and pick up enough moderate Republican votes to become law. We'll see whether Boehner allows bills like this to come to the floor for a vote - my guess is no, at least not initially - so we'll see a government shutdown, perhaps a prolonged one, before we get a budget for FY2012.
4. The current Congress will go down in history as the least effective Congress ever. They will do even less than the "Do Nothing" Congress. Since he has already demonstrated that keeping the Speakership is more important than doing anything or helping the country, Boehner will hold on to the Speakership by ensuring that the Senate Democrats and White House accomplish as little as possible. To be fair, I'm not sure he has much choice - if he started compromising with the Democrats regularly in order to actually accomplish things (and even advance the Republican policy agenda), he'd probably lose the Speakership to someone equally if not more uncompromising, such as Eric Cantor. So, America, don't expect for the US government to do much of anything for the next 1.5 years.
And now, a couple of REALLY speculative thoughts:
1. Will Boehner manage to keep the Speakership? I have no idea, and as I said above, I don't really think it matters - I think anyone who came after him in this Congress would find themselves in a similar boat, so I don't think the outcome would change much with a different Speaker.
2. Is this the beginning of the end of the Republican party? As I said, I think this episode has, somewhat paradoxically, perhaps made it more likely that a deal will be reached over a debt ceiling, but there's a good chance that the Tea Partiers in the Republican Party will view this as an epic betrayal by the Republican leadership (they can't help it - it's in their nature to refuse to compromise, just as it's in Democrats' nature to be open to compromise). This episode has shown the extent of the rift between the various factions under the Republican umbrella, and I wonder if we'll see the Republican party split into two or more factions: the populists, the fiscal conservatives, the social conservatives, and/or the pro-business faction. I doubt it, but anything's possible - as you see above, Bill Kristol has come out swinging against the Tea Partiers, and so has Bill O'Reilly - along with John McCain, the Wall Street Journal, and Ann Coulter - people who can hardly be called RINOs. I think the Republican leaders will probably be able to keep their coalition together by focusing on a common (if somewhat mythological) enemy - the socialist/fascist/communist Obama and whoever comes after him - but it's not guaranteed.
3. The U.S. will continue it's slow decline, thanks in no small part to foreigners' shift away from the U.S. dollar as the world's preferred reserve currency. Thanks to all of this debt ceiling idiocy, the rest of the world already thinks we're crazy and are calling our politicians a "laughing stock" - if I were other countries, I'd start diversifying away from the U.S. dollar and other U.S. assets. I'm not even sure many of U.S. politicians are fit to govern, and as I've watched the past 2 days play out, I'm starting to think that we might deserve a debt downgrade.
Maybe I'll be proved wrong. Perhaps Boehner has a brilliant endgame in mind, will manage to pull through this like a knight in shining armor, and will put together a deal that can pass the Republicans in the House, the Democrats in the Senate, and the White House - but I doubt it, so he'll have to take Reid's compromise or be largely responsible for a U.S. default. At this point, the House Tea Partiers will view any compromise with the Democrats to raise the debt ceiling (which both I and Wall Street still see as highly probable, at this point) as a blood betrayal by Speaker Boehner, which will only make them more intransigent in the future. At that point, if Boehner ever wants to pass any legislation that will actually make it past the Senate and White House, he'll have to do it together with the House Democrats rather than with the full Republican caucus - which may cost him the Speakership.
We'll just have to wait and see how this plays out - we'll know whether I'm correct in some of my above predictions in a few days; others might take years to come to light. The only thing I'm sure of at this point is that, no matter what happens, the poor are going to get screwed.