Posted Tuesday, May 24, 2011, at 11:14 AM
The negotiations over raising the debt are still grinding on, with most denizens of the Capitol crossing their fingers and hoping Joe Biden's
talks with Eric Cantor
and other lawmakers produce some sort of compromise. That would be convenient, because no one can agree what the hell it'll take to raise the limit. Admittedly, the loudest "no" voices on the right drown out everyone else. But I've noticed more and more skepticism from Republicans about what they're being asked to swallow. A Tea Party activist recorded this video of Cantor in his district last week.
This technical date that the Secretary of the Treasury is putting out there is really an attempt to try and drive the table, so there just can be more money. And I am fearful, I really am, that they're just kicking the can down the road. To your point, yes, there could be a horrific reaction on the markets, and interest rates would skyrocket if we don't meet the obligation on the date the Secretary of the Treasury sets. Drucker's* point is that the markets are smarter than that.
I asked Rep. Steny Hoyer, Cantor's Democratic opposite, about some Republicans' skepticism that anything needed to happen on the debt limit -- skepticism fueled, at least a little, by the shifting date at which doomsday is supposed to occur.
"I talked to the Secretary specifically about it," said Hoyer, "and I said, 'The problem is, you give us more dates, and we procrastinate.' But what he said, honestly, was, 'Look. I've got to give an honest date. My people are now saying revenues are up. We're getting more cash flow. Transparently, what's accurate now is that given the cash flow we can get to August 2 before we hit that wall."
This isn't to say Hoyer soft-peddled the risks of no vote.
"There is nobody who doesn't believe that the debt limit needs to be extended, in my view," he said. The word "nobody" was punctuated by him slamming his hand on the table. "Now, Mr. Toomey** may think it doesn't need to be extended. And when they stop paying Social Security benefits, when they stop paying veterans' benefits, because they're paying debt first and there's not not enough money left over for the other, he's going to say, in my view, 'Well, I didn't mean that.'"
After I asked this of Hoyer, GOP leaders
they'd hold a "clean vote" on the debt ceiling -- one that would be expected to fail.
*I think he's referring to an independent analysis.
**Toomey has made the rounds promoting his bill, the "Full Faith and Credit Act," which would require the Treasury to pay debt obligations before anything else; something, ostensibly, that would take the fear of default off the table.