The speech actually takes as its starting point some scaremongering about the fiscal cliff, which would actually accomplish what everyone at the venue where he spoke, Peter G. Peterson’s 2012 Fiscal Summit, claims to want – an immediate closing of the primary budget deficit. But because tax increases are anathema to the modern GOP, and because defense contractors fund their elections, Boehner had to whip up a frenzy over “a sudden and massive tax increase” from the expiring of the Bush tax cuts, as well as the end of the payroll tax cut, extended unemployment benefits, and the start of the trigger cuts to spending, “half of which would devastate our men and women in uniform and send a signal of weakness.” He tries to pair this with the debt limit, which he uses a very clever term to describe:
Sometime after the election, the federal government will near the statutory debt limit.
Note that Boehner does not say, “the debt limit will expire at the same time as the fiscal cliff.” That would not be true. In fact, Tim Geithner, appearing at the same event last night, pointed this out. The debt limit actually was reached in 2011 by May, but extraordinary measures from the Treasury Department allowed a delay in the reckoning until August. The same circumstance will apply here, meaning that we are not likely to see a critical need to increase the debt limit until early 2013 – under a new Congress and a new Presidential term.
“[O]n the current estimates … we’re likely to hit the debt limit sometime before the end of the year, but Congress has given the executive branch a set of tools that buy [administration officials] some time. And those tools will probably take us into the early part of 2013, thus separating somewhat the timing of the expiry of the tax cuts and the sequester with the ultimate need for Congress to act on the debt limit. You know, they should do it as soon as they can, but that’s the basic sequence in this context.”
So you have the fiscal cliff at the end of the year, and the debt limit expiration shortly thereafter. It makes plenty of sense for Boehner to try and combine the two. Boehner doesn’t want the Bush tax cuts to expire or the trigger to go forward, but it would take affirmative legislation to change that outcome. Similarly, it would take affirmative legislation to raise the debt limit (although there are other options in the Constitution which could take this out of the hands of Congress). So by combining must-pass bills he wants with the debt limit, Boehner is trying to set up the fiscal cliff negotiations on his terms. Geithner very subtly did the same thing.
Brian Beutler games this all out today, suggesting that Democrats in Washington are really thinking about letting all the Bush tax cuts expire, and then coming back with an “Obama tax cuts” program as the first legislation of the new Presidential term. Obviously the outcome of the Presidential race will be determinative there. But this fight over taxes and spending largely mirrors the Presidential race, so it makes sense for Boehner to lay out his principles. He also notes Boehner’s constraints, put on him by the far right of his caucus, where he has to threaten hostage crises as a means to keep his Speakership.
The problem for Boehner comes if anyone remembers what a brutal and unnecessary fight that debt limit hostage crisis was back in 2011, and seeks to punish the party that wants to do it all over again. Chuck Schumer seized on this in his reaction: “It is pretty galling for Speaker Boehner to be laying down demands for another debt ceiling agreement when he won’t even abide by the last one. The last thing the country needs is a rerun of last summer’s debacle that nearly brought down our economy.”
Boehner will try to extend the Bush tax cuts this summer, but that will run into a brick wall in the Senate. This all shows what a total mess this lame duck session is going to turn out to be. You have all of these expiring measures, with pitfalls on both sides, especially for the economy. And then there’s a looming default crisis in the background. I don’t see much of anything good coming out of it.