Here’s something to keep an eye on: Whether Dems can successfully use the battle over the debt ceiling to drive a wedge between the GOP’s leading business supporters, who understand that not raising it would be catastrophic, and the Tea Party base, which wants to use the debt ceiling fight to force more spending cuts.
Dems think they’ve found an opening: A new report claiming that Wall Street executives are unhappy with House Speaker John Boehner’s brinkmanship with the debt ceiling and the impact it could have on the economy.
Politico reports today that Boehner has been “reaching out to top Wall Street players asking how close Congress can get to the May 16th deadline (or July 8th drop-dead date) for raising the debt limit without seriously unnerving financial markets.” At least one executive responded by warning Boehner that allowing the debt ceiling deadline to get too close could be very damaging, Politico reports.
Now Chuck Schumer is jumping on the report as proof that Boehner’s flirtation with the Tea Party is playing Russian roulette with the economy in a way that could alienate the GOP’s business base. In a statement sent my way, Schumer said:
“The Speaker seems to be testing out how far he can venture onto a frozen lake before the ice breaks. He should listen to business leaders who are telling him to watch his step. Messing around with the debt ceiling just to satisfy the Tea Party will lead to higher interest rates and an economic cataclysm.”
Executives like J.P. Morgan chief executive Jamie Dimon are worried that playing chicken with the debt ceiling could be “catastrophic.” Dems are hoping to use the debt ceiling showdown to divide Republicans between their corporate benefactors, who want the debt ceiling standoff resolved with no fuss, and the Tea Partyers, who are demanding that the GOP leadership use the debt ceiling as a hostage in the push for ever more extreme and draconian spending cuts.
UPDATE: Post slightly edited from original.