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A Debt Ceiling Negotiating Strategy

Keith Hennessey has some suggestions for how the Republicans should approach the debt ceiling:

He is afraid of getting jammed by small short-term debt limit increases (as I have recommended). Really afraid. This path would keep fiscal issues front-and-center when he wants to punt them, and it would force him to pay a price every few months. Just as in 2011 his top priority was to get a debt limit increase that lasted past the election so he would not have to negotiate again, his top priority is to make certain he isn’t forced to do this often. The primary leverage Congressional Republicans have on this bill is the size and duration of an increase, not the ability to deny any increase. The President will pay to do this infrequently.

This is the key to how Republicans should approach this.  My first reaction was that if the President won’t negotiate, then don’t raise the limit.  Except it’s not the President that Boehner and Sessions need to negotiate with – it’s Harry Reid, which is to their advantage.

The Republicans can and should adopt the Democrat strategy of selling the same goods – small, 3-month long increases – over and over again, raising the price each time.  You can’t actually announce such a strategy in advance in order for it to be effective, but unannounced, it can be quite productive for your side.  It also requires a certain amount of strategic thinking – what to ask for when, what the BATNA is in each case, what the endgame in 2014 is, how these incremental votes can disadvantage Democrat senators in red states, and so forth.  But if we agree that the first order of business is re-establishing some sort of fiscal discipline over an administration that is extending its moral bankruptcy into the nation’s financial bankruptcy, then we can have this fight over and over and over again, to our increasing advantage.

Posted in Economics, Politics.

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