Bob Woodward, who has always had an inside scoop on the machinations inside the Beltway, is out with a new book on the negotiations last summer over the debt ceiling crisis. The excerpt in the Washington Post details how the House Republicans basically held the president hostage over what is usually a one page bill to increase the credit limit of the United States, and it’s a rather sharp reminder of what happens with the Tea Party-addled lunatics take over the asylum.
The cascading impact would be unknowable. The world could decide to dump U.S. Treasuries. Prices would plummet, interest rates would skyrocket. The one pillar of stability, the United States, the rock in the global economy, could collapse.
“So,” the president said, “if we give $1.2 trillion now in spending cuts” — the amount in the House bill to get the first increase in the debt ceiling for about six to nine months — “what happens next time?” The Republicans would then come back next year, in the middle of the presidential campaign, and impose more conditions on the next debt ceiling increase. He could not give the Republicans that kind of leverage, that kind of weapon. It was hostage taking. It was blackmail. “This will forever change the relationship between the presidency and the Congress.
“Imagine if, when Nancy Pelosi had become speaker, she had said to George W. Bush, ‘End the Iraq war, or I’m going to cause a global financial crisis.’ ”
So, Obama said, they had to break the Republicans on this. Otherwise, they would be back whenever it suited them politically.
They were out of options, Geithner said. The only one might be accepting the House bill, loathsome as it might be. “The 2008 financial crisis will be seen as a minor blip if we default,” he said.
The president said, “The Republicans are forcing the risk of a default on us. I can’t stop them from doing that. We can have the fight now, or we can have the fight later on, but the fight is coming to us.”
Nobody came out of this fight without a scar. The president looked weak and gullible for being blindsided by the Republicans when it was obvious to everyone that they were willing to let the economy crash again just to make Mr. Obama look bad, and the Republicans look like economic terrorists because, well, they are.
What’s ironic but thoroughly predictable is that now, during the campaign, the same people who supported the bill with all the draconian measures such as sequestration are moaning and groaning and whining about how terrible things will be if it happens. The whiners include Mitt Romney, whose running mate voted for the bill.
We may be short on cash, but there sure seems to be a lot of brass out there.