This is a very dangerous game McConnell is playing. Worse than that, it’s a very counterproductive game, both for the economy and for his stated goal of entitlement reform.
A debt-ceiling deal is difficult now. It’ll be much harder as the 2012 campaign heats up. The presidential candidates will be forced to take ever more irresponsible and extreme stands on raising the debt ceiling, which will make it much harder for the Republicans in Congress to sell their members on a deal. The unpopularity of raising the debt ceiling will be more of an impediment as we get closer to the election. Trying to cut a new deal over the debt ceiling every few months maximizes the possibility of something going terribly wrong, and is likely to introduce a lot of fear into the market at a time when the economy doesn’t need anything else to worry about.
Perhaps that would be worth it, at least for McConnell, if it was likely to achieve his objective, But it isn’t. McConnell has never precisely defined what he means when he says “entitlement reform,” so it’s not clear exactly what he has in mind. But big cuts to Medicare, Medicaid and Social Security are a pretty good bet. And the closer we get to the election, the harder it’ll be for members of either party to vote for those sorts of cuts. McConnell’s plan would maximize the possibility of a disaster nobody wants while minimizing the possibility of the deal that he claims to want.
The budget deal isn’t a fine wine: it won’t get better as it ages. It’ll get better if the Republicans agree to include taxes. But McConnell has been clear in public and his negotiators have been clear in private that they won’t budge on taxes. Since that leaves Republicans with little to offer Democrats, McConnell has turned to threatening them — and the economy — instead.
But what, specifically, is the threat here? That Republicans will endanger the economy and run a campaign demanding deep Medicare cuts necessitated by an unrelenting hostility to tax increases on the richest Americans in an election year? That’s not a credible threat. At some point, Democrats need to begin saying no to this stuff, and now’s as good a time as any.