Seven Things You Should Know About the Wackiest “Fiscal Crisis” Yet

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US Sen. Ted Cruz speaks to local residents during a fundraising picnic for the Iowa Republican Party, Friday, July 19, 2013. (AP Photo/Charlie Neibergall)

Sometime in the next week, Congress will either get it together to pass a new budget resolution or the government will shut down (all but essential services). Two weeks after that, the federal government will reach its debt limit. If it is not raised, nobody really knows what will happen. The only sure thing is that it would roil the financial markets and cause some damage to the global economy.

So, we have another fiscal cliff. This contrived crisis is even more irrational than those of the past few years because Republicans in Congress have not only taken a hostage that they can’t shoot, but are demanding that Democrats ditch their signature achievement of the Obama presidency: the Affordable Care Act.

Here are seven things you need to understand about how wacky all of this really is.

1. The plan …

Political observers expect to see some serious kabuki theater in the next few weeks. Speaker John Boehner (R-OH) caved in to tea party pressure and passed a budget resolution last week that includes a measure “defunding” the act.

Senators Ted Cruz (R-TX) and Mike Lee (R-UT) have been attacking House Republicans for not passing such a bill. In all likelihood, they will now filibuster the bill they have been begging for in order to try to block Senate Majority Leader Harry Reid (D-NV) from stripping out the defunding language, which he can do with a simple majority.

Because many Republican senators think this is all crazy – John McCain referred to Cruz as a “wacko-bird” a few months back, and Senate Minority Leader Mitch McConnell, R-Kentucky, said he won’t support the effort — the filibuster will only be a delaying tactic. In the final days or hours before the government shuts down, the Senate will send a budget to the House. At that point, Boehner will either attract enough Republican votes by promising a showdown over the debt limit in a couple of weeks and pass the budget with a bunch of Democratic votes or let the government shut down.

Then there’s the debt limit. Boehner has promised his members that they will get another bite of the Obamacare apple, but he faces a big problem: Obama’s insistence that it is Congress’ duty to pay the bills it ran up, and his refusal to negotiate on the matter.

The Washington Post’s Paul Kane reports that Boehner may hold a vote this week on a bill laden down with conservative goodies — including the approval of the Keystone XL pipeline, Medicare means testing, tax reform and a one year delay of all the health care act’s provisions — in order to get his caucus to raise the debt limit through 2014, but it is not clear whether any debt limit hike can attract 218 Republican votes, especially one that would be dead on arrival in the Senate.

2. Everyone knows this is all a scam …

Everyone in Washington knows that these budget shenanigans have zero chance of success because the vast majority of the funding for the health care act is “mandatory spending,” which means that a shutdown will have no effect. Only a bill passed by the (Democratically controlled) Senate and signed by Obama could defund the health care law, which is about as likely as the Loch Ness monster singing the national anthem at this year’s World Series.

But as The Washington Post’s conservative blogger Jennifer Rubin notes, the outside groups pushing the effort — Freedomworks, the Heritage Action Committee and the Senate Conservatives Fund – are raising big bucks from all this drama. In fact, according to The Huffington Post, the Senate Conservatives Fund “raised its largest-ever monthly total for a non-election year this August.” Democrats are reportedly getting in on the action as well.

3. Plan B …

Ted Cruz offered an alternative this week when he urged the House to continue sending bills funding various elements of government to the Senate. “If Harry Reid kills this bill in this Senate, I think the House should hold its ground and begin passing smaller continuing resolutions one department at a time,” Cruz told Fox News this week. “It should start with a continuing resolution focused on the military. Let’s see if Harry Reid is willing to shut down the military just because he wants to force Obamacare on the American people.”

As Roll Call noted, the House approved a defense authorization bill back in July.

4. “Clean” budget isn’t that clean …

The goal here is to get a “clean” budget resolution through both chambers of Congress and onto the president’s desk. But largely missing from the discussion is the fact such a budget would maintain the crushing cuts of the sequesterrepresenting a significant victory for conservatives.

Democratic congressional staffers told The Washington Post’s Greg Sargent that they would not pick a fight over the sequester-level funding because the budget resolution is temporary — it will only keep the government afloat for three months — and they do not want to shift blame away from Republicans if a shutdown or default occurs.

5. Republicans are deluding themselves about the public’s opinion of Obamacare.

“The American people don’t want the government shut down, and they don’t want Obamacare,” John Boehner said after the House passed its bill. “The House has listened to the American people.” This is a common refrain from Republicans who support the effort to defund the law, and it is a product of being stuck in the conservative media bubble.

The truth is that while Americans are divided on the health care law – with slightly more opposing it than supporting it – poll after poll shows that large majorities disapprove of the effort to defund it by threatening a shutdown or messing with the credit of the US government.

6. No leverage.

John Boehner has all but begged the White House to enter into negotiations to raise the debt limit. But he has no leverage, for two reasons. First, he is on record saying that not raising the debt ceiling would lead to “a financial disaster, not only for us, but for the worldwide economy.” And second, because more than twice as many Americans would blame Republicans in Congress for that disaster than would blame the president.

It’s a weak hand. But he is really caught between a rock and a hard place: He has got little control over his caucus but is set up to be the fall guy if it all goes badly. It is no wonder that it has been widely rumored that he is not interested in another term as speaker.

7. Not raising the debt limit in a timely manner will increase the national debt …

Former Senator and Senate Finance Committee Chair Judd Gregg, R-N.H., explained this irony in an op-ed urging Republicans not to play “Russian Roulette with all the chambers of the gun loaded”…

A default would lead to some level of chaos in the debt markets, which would lead to a significant contraction in economic activity, which would lead to job losses, which would lead to higher spending by the federal government and lower tax revenues, which would lead to more debt.

Federal Reserve Chairman Ben Bernanke said last week that games over the budget and debt ceiling are already hurting the economy.

Joshua Holland is a senior digital producer for BillMoyers.com. He’s the author of The Fifteen Biggest Lies About the Economy (and Everything Else the Right Doesn’t Want You to Know about Taxes, Jobs and Corporate America) (Wiley: 2010), and host of Politics and Reality Radio. Follow him on Twitter or drop him an email at hollandj [at] moyersmedia [dot] com.
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  • EllenHunt

    This is vicious, racist class warfare conducted by the republicans.

  • Robert Scalzi

    Rethuglickin’s blatant attempts at harming the USA are nothing short of an act of treason, they should be rounded up arrested and made to answer for their seditious acts.

  • George Finegan

    This will lead ultimately to a huge defeat for Republicans in 2014,despite the MSM insistence that gerrymandering in “Red States” will keep the House in Republican hands.Remember the MSM is in league with the interest’s of their masters,never forget corporations are NOT people.Demand better from our Fourth Estate.

  • Scobos

    Indiana Jones – The Last Crusade: Phonetically (in case they censor the REAL word) “NAHTZEES [Republicans]. I HATE these guys.”

  • Scobos

    Crudz looks remarkably like McCarthy. Wonder where this is heading? Creep.

  • Brenda Duffey

    Oh all you political experts who have forgotten the only thing that should really matter in this debacle. What are the people saying? We spoke up and somehow the present Administration and Congressional leaders found another “viable solution” to the military crisis. Why not let the people speak about what they want and have the Congressmen listen? This is a representative democracy, not a theocracy, corpocracy, or political party controlled Congress.

  • Anonymous

    Mr. President,
    “STAND YOUR GROUND!”

  • Anonymous

    I keep seeing this phrase in recent media articles (including this one) with respect to the Affordable Care Act: “signature achievement of the Obama presidency.” My understanding of the term is that it means “the most distinguished achievement of a person’s career; a legacy; or that achievement which most defines a term in office.”

    Considering that the defining premise of the act – the individual mandate – and much of the substance of the bill were lifted directly from a proposal written by a right-wing think tank back in the nineties as a retort to Hillary Clinton’s attempts to reform healthcare, I just don’t even know what to think about such a statement. Because it seems to say that the achievement that most characterizes the accomplishments of Congressional Democrats during the term of a Democratic president is the passage of a piece of Republican-authored legislation.

    Maybe it’s just me, but if I were a Democratic president, I wouldn’t be comfortable with people calling the ACA my “signature achievement.”

  • Gary Morin
  • Roger Mills

    It’s you.

  • Roger Mills

    What is it about this guy’s face that just makes me cringe? One theory is humans have instinctive reactions to creepy, insane things … he gives me the willies… uck. Now let’s listen to what he says.. AWK! Theory proven true.

  • terry

    A good idea is a good idea regardless of the origin. What Obama was able to do that nobody else could manage to get done…was get it passed and signed into law. Now, let’s roll with it!!!

  • Ginger

    It’s you. The Republicans are too thick to know they could share some of the credit for the bill. Look at Romney denying his own healthcare plan… President Obama deserves the credit for being the one who got it through and who is already seeing some positive results in our healthcare system.

  • terry

    we did, when we re-elected the President. We didn’t vote for the guy that wanted to repeal it.

  • Ginger

    By his extremism on this issue, Cruz all but guaranteed that he will NOT be a Republican nominee in 2016; unless they all have amnesia about the last two elections. Carry on, Cruz!

  • terry

    yes, imagine what we could with the money that insurance companies take in. Insurance co’s, insurance brokers, the whole bunch of them. Get rid of them.

  • Peter White

    The Wall Street Empire controls both corrupt parties so they win no matter who loses! This is all a charade to distract the masses from the real issues and the real power structure; the only solution is a voters revolution that flushes out the two-party puppets of Wall Street!

  • Anonymous

    Republicans don’t have the will or ability to govern … they want to rule.

  • Anonymous

    I’d say the greatest irony so far is many within the GOP have actually come out and Blatantly said Cruz is wrong and they will not support him. Of course he has Sarah Palins blessings, go figure. I also find it interest that Cruz, with his family history is so against immigrants? Why does he go against his own inheritance, by actions shows he is not proud of his heritage…that says a lot about a person to me.

  • Anonymous

    The Blues Brothers – “I hate Illinois Nazis”

  • MrBill2

    Sounds about right. There is a bill to defund Obamacare and raise the limit and solve the problem. I am not against a heathcare program that works but right now it has radically raised what many seniors pay and they don’t hve the money. Fix that bill and I will support you all the way.

  • Elena Ferrante

    Robert…the ACA reins in the abuses….only to give way to far greater abuses. Think about all of that information and power handed to the federal government and the IRS. Seriously, it this the answer you are looking for?

  • Elena Ferrante

    Until you take a look at your premium invoice, that is.

  • Elena Ferrante

    You didn’t. So, I have an idea..all those who voted to re-elect the president get to partake in his wonderful healthcare plan. And fund it. And leave the rest of us out of it. I thank you, and my wallet thanks you…

  • Anonymous

    I appreciate what you’re saying.

    Consider this:since FDR’s first attempt in 1935 — for over 78 years — the left has pushed the concept of universal coverage and been defeated. Truman and Eisenhower tried it, Kennedy and Johnson backed off and went for Medicare and Medicaid instead.

    After winning the fight over implementation, which they will, progressives will have to turn toward improving what has always been a flawed law.

    In 2017, the states will be free to experiment with better approaches, and if a few implement successful single-payer systems (like Vermont and California), they’ll become a natural experiment and others will follow. Neither Social Security nor Medicare began as they are today. They were improved upon over time.

    The legacy, I think, will be in creating the broad framework of a universal system.

  • Anonymous

    Yeah Elena, the answer many of us are looking for is to go back to being denied coverage for pre -existing conditions, to be at the mercy of corporate bean counters who have not one bit of interest in healthcare and only want to appease stockholders. You may continue to fear the government all you like, my fear is that I’ll continue be priced out of reasonable access to healthcare (as I have most of my adult life) by the “market place solutions” of the Republican/Tea Party. Are you so naive that you think the government doesn’t already have all of that power and data? And you think that getting rid of the ACA will somehow change that?

  • Anonymous

    Something the right can’t seem to understand. They honestly think that they lost in 2012 because they didn’t get their message across, when in fact, they lost because their message came across loud and clear.

  • http://mosquitocloud.net/ aprescoup

    Best I recall their message on economics and foreign-relations was no more apart than a pube’s breadth from the neoliberal message of Obama and the corporatist Dem party.

  • Paul Tuke
  • Paul Tuke
  • greg corsten

    seems to me it like a game of football. no matter who is offense and who is defense, they try to move the same ball across the goal line and if the other has that ball you try to stop them. sad.

  • Peggy Richards

    thank you

  • Peggy Richards

    premiums are going up naturally – they would have gone up more without ACA. the companies are now limited to a %15 profit and have to refund anything over.

  • Anonymous

    Thank you, Joshua Holland, for this perspective. I hope you’re right. My experience has been that republicans plan for the long game, and that democrats react to republican moves in the short term, but have no real long term plans of their own. Maybe this is the start of the democrats’ long game.

  • MrBill2

    Oh the wife’s plan went up double to three twenty five.

  • MrBill2

    The wife’s plan doubled.

  • MrBill2

    Well! I have read the bill and all I can tell you that you are right about it making insurance companies rich. The wife’s plan doubled in cost.

  • Anonymous

    That started with “the Reagan revolution” in 1981, when Republicans envisioned turning the Democratic Party into an impotent, irrelevant minority, “all Republicans, all the time.” A key characteristic of the conservative mentality is to see everything as a zero-sum game: “if me, then not you.” They don’t get “win/win” which is why they’re not socially or even intellectually inclusive. It’s the simplistic, either/or, all-or-nothing mindset characteristic of very young children who can only make sense of the world in terms of black OR white, good OR evil. Much like Bush in “You’re either with us or with the terrorists.” Problem was that Democrats found themselves being so extremely and irrationally attacked that they tried to fight fire with fire, and political discourse spiraled ever downward from then on. In trying to defend themselves, Democratic leaders began compromising their own core principles.

  • DonRoberto

    Insurance companies want to get all they can before the rest of the major provisions of Obamacare kick in. If you will remember, health insurance prices also began to skyrocket after the Clinton healthcare reform plans were defeated, when the insurance industry realized it was immune to further regulation or reform. My advice is to either hang on, and wait until they drop their rates again, or enroll in one of the lower-priced competitor plans that are springing up now.

  • Anonymous

    It is absolutely not true that ACA-Obamacare “has radically raised what many seniors pay.” It gives most seniors a break. It only raises rates on anyone who’s extremely wealthy. People who are happy with the insurance they already have don’t have to get Obamacare.

  • Anonymous

    Billions to bomb Syria – How dare they threaten our economic standing to hurt the American people! They should higher a special prosecutor to impeach these reps who are in essence committing treason.

  • Anonymous

    They get triple A health care for.free for life plis.a pension

  • Jim Young

    I thought he was born in Canada to a Cuban father and American mother. Will Canada take him back or Cuba? Can we deport him to either (or Mars)?

  • Barbara B

    There’s that hope & change thingy again.

  • Barbara B

    That’s true if you live in a solid republican state. Me, I live in Minnesota. We are solid blue and have the lowest premiums in the country.
    Vote to change your state legislatures and government to democrats and you will see your premiums go down.

  • Another Voice

    Republican Tough Choices
    Why not have some newscasters ask Ted Cruz & other similar zealots if they would accept an up / down vote in House & Senate for Senate’s Immigration & Gun Control Bill for a one year deferral of Obama care implementation
    Lets have equalized hostage taking & terrorism
    Obama could still sign 2 of 3 if he really want to stick it to them