As I read this, it’s not really about Republicans demanding debt reduction and using the best leverage they have available to get it. Nor is it about Republicans demanding tax reform — their other possible demand — and using the best leverage they have to get it.
No, it’s the other way around. The House crazy caucus is demanding not debt reduction, not spending cuts, not budget balancing, but blackmail itself. That’s really the demand: The speaker and House Republican leaders absolutely must use the debt limit as extortion. What should they use it to get? Apparently, that’s pretty much up for grabs, as long as it seems really, really, big — which probably comes down to meaning that the Democrats really, really don’t like it.
In other words: I think Greg is correct, and the speaker has decided that he doesn’t actually want to blow past the debt limit. But now he has to find some way to do it without losing his job. And that means satisfying the significant chunk of his conference who demand maximum nuttiness at all times, either because they really believe in it or because they’re terrified to allow any space at all between themselves and those true believers.