New Conservative Plan: Repeal Obamacare or We'll Default on the National Debt

A blog about business and economics.
Aug. 15 2013 9:11 AM

New Conservative Plan: Repeal Obamacare or We'll Default on the National Debt

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WASHINGTON, DC - MAY 16: That's a whole lot of repealing.

Photo by Chip Somodevilla/Getty Images

Robert Costa reports and Conn Carroll endorses the latest nutty conservative plan to end Obamacare. Rather than on insisting on Obamacare repeal as a condition for funding the discretionary portions of the federal budget (the busted old Senator Mike Lee extremism) the new idea is to pass a 60 day continuing resolution so that appropriations expire after the Treasury runs out of "extraordinary measures" and needs congress to raise the debt ceiling. Then "House leadership wants to combine Democratic desires to roll-back sequestration with conservative desires to delay/defund Obamacare into the debt limit fight."

Now recall that we've had two go-rounds of this.

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During the First Debt Ceiling Crisis, Republicans insisted on $1 of spending cuts for every $1 of new borrowing authority. The Obama administration, rather than sweeping this aside, decided to try to play some clever political jujitsu aimed at boxing Republicans into agreeing to a "balanced" deficit reduction package. After a lot of twists and turns what we ended up with was sequestration.

During the Second Debt Ceiling Crisis, Republicans said they were going to once again insist on the 1:1 forumula. They ultimately settled for the faux-concession of a "no budget no pay" rule. Senate Democrats responded to that by duly passing a budget, and then once they'd done so Republicans realized that they'd negotiated for something worthless and started refusing to hold a conference committee to reconcile the House and Senate budgets.

Now comes the Third Debt Ceiling Crisis in which, allegedly, the country will be pushed into default unless Obama agrees to repeal his signature domestic policy initiative.

I thought back during the First Debt Ceiling Crisis that Obama could escape with no concessions if he played hardball and I think the experience of the Second Debt Ceiling Crisis bears that out. Obama could do the country a favor (at the cost to some political embarassment for himself) by exploting the platinum coin loophole to make the debt ceiling irrelevant, thus sparing future elected officials from needing to endure this charade. But absent that, the real meaning of this escalating demand seems to me to be that House leadership is just setting itself up for a Hastert Rule violation. House Democrats, paired with a small number of House Republicans, will pass a more-or-less clean debt ceiling increase. House GOP leadership will denounce the Democrats' spendthrift ways and job-killing Obamacare, and life will go on.

That's far and away the most likely scenario. But you shouldn't totally dismiss the possibility of something totally crazy happening. An Obamacare-or-shutdown scenario could have led to a three or four day shutdown that didn't make a big difference to anyone's life followed by a resolution. The debt ceiling is a more dangerous and unpredictable weapon, and even a very small chance of it blowing up should give people pause.

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