I’d Bet on a Default

GOP house leadership(Community Matters) Politico on GOP perspective on debt ceiling:

SIREN — “BEHIND THE CURTAIN” COLUMN – “House GOP eyes default, shutdown,” by Jim VandeHei, Mike Allen and Jake Sherman: “House Republicans are seriously entertaining dramatic steps, including default or shutting down the government, to force President Obama to cut spending by the end of March. … GOP officials said more than half of their members are prepared to allow default unless Obama agrees to dramatic cuts … Speaker John Boehner ‘may need a shutdown just to get it out of their system,’ said a top GOP leadership adviser. ‘We might need to do that for member-management purposes – so they have an endgame and can show their constituents they’re fighting.’ … While everyone knew the [Christmastime] tax drama would end with the rich paying more taxes, no one is sure how the coming fights will unfold. … Starting [today at a leadership retreat in Virginia Hunt Country], Boehner … will discuss his preliminary thinking on a spending strategy.

“GOP leaders are authentically at a loss on how to control members who don’t respond to the normal incentives of wanting to help party leaders or of avoiding situations – like default – that could be public relations nightmares. After meeting with his leadership team, Boehner will head to Williamsburg, Va., to meet with the entire GOP conference on Thursday and Friday. He will walk them through the political and economic consequences of default and his plan for forcing spending cuts without allowing any new tax hikes to get smuggled in. ‘It is more likely you default than you raise any taxes,’ said a senior GOP aide. … Boehner is at the mercy of a Republican Conference that is far more resistant to compromise than he is. …

“In a meeting between House GOP leadership and outside campaign groups at the Republican National Committee on Thursday, Boehner’s chief of staff, Mike Sommers, discussed the possibility of increasing the debt limit for only one to three months … ‘Any option – including that one – is contingent on getting corresponding cuts/reforms in return,’ a Boehner aide said. ‘It depends on the White House. If they offer cuts and reforms equal to one month, that’s what they get. If they agree to more cuts and reforms, they get a greater increase.’ … GOP officials said 90 percent of their members are prepared to allow the [sequester] cuts to take effect … Look for members to push for an idea, crafted by Sen. Pat Toomey (R-Pa.), to cushion the effect of default by passing legislation beforehand that prioritizes the order that government bills will be paid in the event the debt limit is not increased.” http://politi.co/W3gWBg

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