Soon to be ex-Speaker of the House, John Boehner, has cut a deal with the Obama administration to extend the debt ceiling until 2017, eliminating the possibility of the most extreme factions of the Republican House caucus ruining the credit of the country and shutting down the government until after the 2016 Presidential election. The deal is far from perfect. It expands military spending, and some domestic spending for 2 years, but it reportedly imposes cuts on Medicare and Social Security Disability, among other many other things (for example, the ACA requirement that businesses with 200 or more employees must enroll them in an ACA qualified plan would be eliminated). Increased spending for 2016 and 2017 would end in 2018, when the current limits under the sequester would be reinstated.
Boehner hopes to pass this deal with support from Democrats and some members of his own party prior to the election of Paul Ryan as Speaker, currently scheduled for Wednesday. This lets Ryan off the hook from having to deal with a possible debt default by the Federal government that will occur on November 3rd of this year absent an extension of the debt ceiling.
If the ceiling were breached it could entail a debt default, leading to surging interest rates and turmoil in global markets. As the Committee for a Responsible Federal Budget, a bipartisan policy organisation, put it in a recent note: “Failing to raise the debt ceiling would be disastrous.”
Ryan, in a classic Washington “Kabuki” theater reaction, expressed his public outrage at Boehner’s actions.
Rep. Paul Ryan blasted Speaker John Boehner, Senate leadership and the White House for cutting a budget deal behind closed doors, saying the “process stinks.”
Ryan said he hasn’t gone through the agreement, which was posted last night.
“This is not the way to do the people’s business,” the Wisconsin Republican said. “And under new management we are not going to do the people’s business this way. We are up against a deadline – that’s unfortunate. But going forward we can’t do the people’s business. As a conference we should’ve been meeting months ago to discuss these things to have a unified strategy going forward.”
Of course, this deal takes any discussion of extending the debt ceiling off the table until October of 2016, a huge benefit to him, and to the country, considering the effects of the Republican refusal to extend the debt ceiling in 2011.
Although the crisis was eventually resolved, it produced a downgrade of the country’s credit rating, and some economists believe that the resulting hit to consumer confidence significantly damaged the economic recovery from the Great Recession.
Not sure I like any deal, and I confess I don’t fully understand all the details that have been reported. Nonetheless, if it passes before Ryan’s election as Speaker, Boehner will have given his replacement a huge political benefit.