No Dealing On The Debt Ceiling, Part 6

Sunday, the NY Times editorial board summarily rejected the Republican plan to hold the country hostage to the debt ceiling to force draconian budget cuts.

The Republicans have long insisted on deep spending cuts — ignoring the fact that a failure to raise the limit by August at the latest would disrupt financial markets and endanger the recovery. The administration understands the danger, but giving in to overly deep spending cuts and making unwise tax concessions would also be damaging.

Both sides have indicated that a probable deal would impose a budget target and enforcement triggers, like automatic spending cuts, if the target was not met. A deal built on such mechanisms could keep markets calm, but they can also be a trap.

Democratic lawmakers and the White House must reject targets and triggers that rule out tax increases, because without higher taxes, the burden of cutting would fall largely on lower- and middle-income Americans. Some Republicans also have said they want the deal to include many of the spending cuts in the House-passed budget. That would be a disaster for vulnerable Americans and for the fragile recovery. Farm subsidies for rich farmers can go but not food stamps and Head Start. 

Seems like a complete dismissal of the Republican position to me.  As I've said time and time again, none of the real players in Washington politics, the major multinationals and financials, are going to allow the Republicans to blow up the bond market and ruin their profit margins.  They could give a damn about the lower and middle class, but they are directly threatened by massive cuts in government spending that many of these companies have government contracts for, and by the threat of default on the debt that would drive up borrowing costs and end the Fed's free money junkie train.  The Republicans are messing with the profit margins here, and you're going to see a lot harder push from the corporate media on this against the GOP here.  The editorial concludes:

It would be better if lawmakers would pass a clean debt limit increase for another year or two, and use the time to work diligently toward a true budget deal. Unfortunately, seriousness of purpose is not on the table.  

Which is Village for "You better knock this off before we kick your asses."  If the Village is breaking out the S-word..."seriousness"...and suggesting the Republicans lack it, then the Powers That Be are playing hardball.  No wonder Orange Julius is going to Wall Street again today to face angry corporate types on the debt ceiling, and their message to him is "get it together."

However, the financial experts that litter Wall Street have been essentially unanimous in telling Congress to not play games with the debt limit, echoing warnings from the White House that a default on U.S. debt would be an economic catastrophe.

Jamie Dimon, the chairman and chief executive officer of JPMorgan Chase, said in March that it would be "crazy" to not raise the debt limit.

"This chatter about not meeting our obligations, I just don't understand it," he said at an event hosted by the U.S. Chamber of Commerce. "It's a moral obligation to ourselves. ... They should know that the United States is good for its money. Period."

The Manhattan group says it gathers members from "top executive levels of business, industry and finance."

Executives from Goldman Sachs and JPMorgan are listed among the group's trustees, as well as David Koch of Koch Industries and William Dudley, the president and chief executive officer of the Federal Reserve Bank of New York.

In other words, Orange Julius is facing his real masters today.  And they are not pleased with him at all.  I've been predicting this for months now, and I fully expect to see a clean vote on the debt ceiling passed, and soon.