House Republicans Wave White Flag Without a Battle; Three Month Extension Approved, Threats Withdrawn; Ryan's Cop-Out

A friend of mine just emailed a story regarding a Republican budget cave-in with a message "you nailed it". To be honest, I didn't. Let's review my precise call.

Politics of the Debate

1. Obama will chastise Congress with talk of financial Armageddon if Congress does not raise the debt ceiling.
2. Congress will pretend to hold the president hostage
3. The secretary of the Treasury will get into the act with its own version of the default debate
4. Perhaps a few payments on non-critical budget items will be temporarily skipped
5. Wall Street will feign panic
6. Constituents will pressure Congress to approve a new debt ceiling
7. Congress will raise the ceiling with another useless warning about next time

House Republicans Wave White Flag Without a Battle 

Like clockwork, steps 1-3 fell in order. However, Republicans bypassed steps 4-6 and skipped straight to step 7 without a fight.

Bloomberg reports House Republicans Plan Three-Month Debt-Limit Increase.

House Republicans plan to vote Jan. 23 on a three-month extension of U.S. borrowing authority in an effort to force the Democratic-led Senate to adopt a budget plan.

“We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government’s spending problem,” Speaker John Boehner of Ohio said in a statement today at the end of the party’s private policy retreat at a resort near Williamsburg, Virginia.

A leadership aide said Republicans are dropping their insistence that a short-term extension be accompanied by a dollar-for-dollar spending cut.

A leadership aide said Republicans are dropping their insistence that a short-term extension be accompanied by a dollar-for-dollar spending cut.

Senate Republican leader Mitch McConnell of Kentucky said in a statement that the lack of a Senate-passed budget in the last several years was a “shameful record that needs to end this year.”

Political divisions in Congress pose limits to the ability of Republicans to achieve their long-term goals of deep cuts in spending, Budget Committee Chairman Paul Ryan of Wisconsin told reporters at the retreat yesterday.

“No one is talking about default, no one wants to default,” South Carolina Republican Mick Mulvaney, who voted against the 2011 debt-ceiling deal, said in an interview today with Bloomberg Television. There is a “lot of support growing” among the rank and file for a short-term debt limit, he said.

The comments by Mulvaney and Ryan reflected the new political realities following President Barack Obama’s re-election that are spurring House Republicans to reassess their goals.

Ryan's Cop-Out

Look at that pathetic statement by Paul Ryan "Political divisions in Congress pose limits to the ability of Republicans to achieve their long-term goals of deep cuts in spending".

Excuse me Paul, can I ask a simple question? I hope so because it is really simple: Who is the majority party in the House?

Time's up. I think you know the answer.

House Republicans should be able to pass anything they want and block anything they don't.

And it gets worse. “No one is talking about default, no one wants to default,” said South Carolina Republican Mick Mulvaney.

Lovely. That goes against the message we heard last week. What changed?

Check out this complete nonsense from House Speaker John Boehner: "We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government’s spending problem."

Really? How? More importantly, when did the House EVER "confront government spending problems". What a bunch of horse-hockey.

Why stop there? Take a look a statement by Senate Republican leader Mitch McConnell of Kentucky: Lack of a Senate-passed budget in the last several years was a “shameful record that needs to end this year.”

Yes indeed.

Shameful Flag Waving

So, no I didn't "nail it".  Republicans did indeed wimp out as I predicted. However, I fully expected a pretend-battle first. This was nothing but a pathetic, premature, shameful waving of the white flag by Republicans up and down the line.

What's next? Foot massages for Obama by Boehner, Ryan, and McConnell?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com