Democratic leaders are worried enough about Republican debt limit threats that they’re counseling President Obama to circumvent the entire debate by invoking untested and unconventional executive powers.
House Minority Leader Nancy Pelosi (D-CA) and Senate Majority Leader Harry Reid (D-NV) have both implored Obama to ignore the debt limit, if Republicans refuse to increase it, by citing the 14th Amendment, which holds the validity of U.S. debt essentially inviolable.
Another outside the box idea, first proposed during the 2011 debt limit fight, holds that the administration should exploit a legal loophole allowing the Treasury secretary to order the minting of platinum coins of any value and use the funds available upon deposit of those coins — likely trillions of dollars — to meet federal obligations. That idea has picked up enough enthusiasm online in recent days that Rep. Greg Walden (R-OR) has introduced legislation to close the loophole.
These pressure campaigns don’t necessarily indicate that Dems are divided over how to approach the debt limit as much as it suggests they’re genuinely concerned that Republicans will actually allow the country to breach it. But a growing body of evidence, hidden in plain sight, suggests Republican leaders are coming to terms with the unsustainable nature of their threat and might not be prepared to execute it.
In a Wall Street Journal interview, House Speaker John Boehner (R-OH) described the debt limit as “one point of leverage,” before acknowledging that it is “not the ultimate leverage.”
Though he will still insist on a dollar in spending cuts for every new dollar Congress provides the administration in borrowing authority, Boehner now envisions the fight playing out in a series of weeks-long increases in the debt limit — an admission that Obama won’t agree to hundreds of billions, or trillions dollars in spending cuts outright.
Instead, Boehner now says the sequester, which includes deep defense cuts Republican abhor, represents a greater, more realistic source of GOP leverage.
On CBS News Sunday morning, Senate Minority Leader Mitch McConnell (R-KY) dodged a series of questions about the debt limit and would not commit to holding Obama to Boehner’s dollar-for-dollar rule.
Newt Gingrich — who attempted a less aggressive version of the debt limit hostage taking strategy during his speakership — has warned Republicans that their strategy will ultimately collapse.
“Everybody’s now talking about, ‘Oh, here comes the debt ceiling,’” he said on MSNBC. “I think that’s, frankly, a dead loser. Because in the end, you know it’s gonna happen. The whole national financial system is going to come in to Washington and on television, and say: ‘Oh my God, this will be a gigantic heart attack, the entire economy of the world will collapse. You guys will be held responsible.’ And they’ll cave.”
A recent editorial in the conservative Wall Street Journal called the GOP’s strategy into question as well.
If cracks are forming in the GOP’s offensive, Democrats don’t have to resort to unconventional means of circumventing the debt limit so quickly — and may not have to at all, unless Republican divisions are so severe that they simply can’t manage to increase it in a clean way.
Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight, and the debt limit fight. He can be reached at firstname.lastname@example.org.