Why is John Boehner consulting Wall Street? 4 theories
The House speaker is reportedly contacting top bankers to ask how far he can push the fight over the debt ceiling without roiling the markets. What does it all mean?
House Speaker John Boehner (R-Ohio) has been talking to top Wall Street executives about how far he can push negotiations with the Left over raising the U.S. debt ceiling — a $14.3 trillion cap on the federal government's borrowings — before the financial markets freak out, reports Politico. With the debt already above $14 trillion, the limit will be reached in a matter of weeks, and Republicans are threatening to nix raising the ceiling unless the Left offers major (and unlikely) concessions. But Wall Street is telling Boehner that, if the markets believe the debt limit won't be raised, very bad things will happen to the dollar, U.S. borrowing costs, and global finance. Why is Boehner even engaging in these discussions? Here, four theories:
1. Boehner is playing with a weak hand
"Raising the debt ceiling is unpopular," with both the public and politicians, but it's "life or death for Wall Street," says Matthew Yglesias in ThinkProgress. And the fact that Boehner is asking Wall Street "how much screwing around he can get away with" before raising it — rather than whether raising it is a good idea — means Democrats should be completely unwilling to trade anything for a clean vote. Republican threats are mere bluffs.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
"Call the hostage takers' bluff"
2. The GOP doesn't want to lose Wall Street's support
What's on the table here, aside from financial apocalypse, is who Wall Street will back in 2012, says Ezra Klein in The Washington Post. In 2008, the bankers backed Democrats, and in 2010 they swung back to Republicans. Boehner's outreach shows "the GOP would like to hang onto that Wall Street money for 2012, and that won’t happen if they attach so many demands to raising the debt ceiling that the market starts to freak out."
"Wall Street to Boehner: Back off the debt ceiling"
3. Wall Street knows Boehner's bluffing is harmless
I'm "somewhat skeptical" of Wall Street's dire warnings about brinkmanship, says Ryan Avent in The Economist. The GOP's already playing hardball with the debt limit, and the bond market is taking it in stride. You'd "think that if Wall Street were at all concerned it would be bidding in some risk premium." It obviously expects that eventually, the ceiling will be raised, which "suggests that debt-ceiling demagoguery, while annoying, is basically harmless."
"Do as Wall Street does, not as it says"
4. The Tea Party is setting the terms of this debate
It's a pretty impressive show of Tea Party strength that we're even having this fight, says David Weigel in Slate. Many in Congress view a politically-toxic vote on upping the debt ceiling as "somewhere between arsenic and strychnine." And with conservatives demanding unlikely concessions in exchange for their support, it's actually possible that "America defaults on its debt," triggering many "nightmarish" consequences.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
'Republicans want to silence Israel's opponents'
Instant Opinion Opinion, comment and editorials of the day
By Harold Maass, The Week US Published
-
Poland, Germany nab alleged anti-Ukraine spies
Speed Read A man was arrested over a supposed Russian plot to kill Ukrainian President Zelenskyy
By Peter Weber, The Week US Published
-
Today's political cartoons - April 19, 2024
Cartoons Friday's cartoons - priority delivery, USPS on fire, and more
By The Week US Published
-
Arizona court reinstates 1864 abortion ban
Speed Read The law makes all abortions illegal in the state except to save the mother's life
By Rafi Schwartz, The Week US Published
-
Trump, billions richer, is selling Bibles
Speed Read The former president is hawking a $60 "God Bless the USA Bible"
By Peter Weber, The Week US Published
-
The debate about Biden's age and mental fitness
In Depth Some critics argue Biden is too old to run again. Does the argument have merit?
By Grayson Quay Published
-
How would a second Trump presidency affect Britain?
Today's Big Question Re-election of Republican frontrunner could threaten UK security, warns former head of secret service
By Harriet Marsden, The Week UK Published
-
'Rwanda plan is less a deterrent and more a bluff'
Instant Opinion Opinion, comment and editorials of the day
By The Week UK Published
-
Henry Kissinger dies aged 100: a complicated legacy?
Talking Point Top US diplomat and Nobel Peace Prize winner remembered as both foreign policy genius and war criminal
By Harriet Marsden, The Week UK Last updated
-
Trump’s rhetoric: a shift to 'straight-up Nazi talk'
Why everyone's talking about Would-be president's sinister language is backed by an incendiary policy agenda, say commentators
By The Week UK Published
-
More covfefe: is the world ready for a second Donald Trump presidency?
Today's Big Question Republican's re-election would be a 'nightmare' scenario for Europe, Ukraine and the West
By Sorcha Bradley, The Week UK Published