House Republican leadership appears to have quieted naysayers on their right who recently seemed hungry to threaten default and defy conventional arguments that such a hardline stance would trigger crisis.
As the House prepares to take steps to push back the debt ceiling deadline until May, the debate within the party is still focused on how to achieve the GOP’s desired spending cuts using other less credit-threatening vehicles, such as the sequester or the soon-to-expire continuing resolution to fund the government.
Even a Ways and Means Committee hearing on the history and mechanics of the debt ceiling -- which some had viewed last week as a platform to spread the message that refusing to raise the nation’s borrowing limit would not result in a devastating default -- seemed to be evaporating even before the hearing began.
“I’m not sure how widely that view is held,” said Lee Casey, a partner, with Baker Hostetler, who is a leading voice arguing that the White House and Democrats’ arguments about the risks of default are bogus. He co-wrote a recent piece in the Wall Street Journal, arguing about the “myth of government default” and argues the framers of the Constitution intended the debt ceiling to be used as a “weapon.”
“There are more who probably would prefer to see some form of a compromise that would raise the debt ceiling…. I don’t have a sense if there is a large number of people out there -- especially in Congress -- who would like to not raise it and test the theory.”
Republican aides said a major focus of last week’s retreat was on defusing interest in using the debt ceiling as a weapon to achieve spending cuts, arguing it could be dangerous to the economy and backfire on Republicans.
“Republicans very well understand that crisis we went through from not raising the debt ceiling and that was explained at Williamsburg,” said a GOP aide.
Other budget wonks watching deliberations behind the scenes on Capitol Hill agree the arguments that default would not be disastrous seem to be waning, particularly at the behest of leaders and “old bulls” in the party.
“There is growing recognition that not raising the debt ceiling would have an impact that would be very difficult for the economy,” said G. William Hoagland, a senior vice president with the Bipartisan Policy Center. “The discussion that happened down at Williamsburg had a lot to do with that evolution. I’m thinking that Paul Ryan had a lot to do with the discussion down there -- that he recognizes that the statutory debt ceiling is not something that you want to play around with.”