For much of the past year Republicans in Congress have said they would use the upcoming debt limit to extract spending cut concessions from President Obama and congressional Democrats. However, with the debt ceiling approaching in early late February or early March and investors getting nervous Republicans are starting to have second thoughts. Now, key congressional Republicans are all but conceding that they will have to raise the debt ceiling whether the White House makes concessions or not.
The biggest name to signal defeat on the debt ceiling is Rep. Paul Ryan (R-WI), who also chairs the Budget Committee in the House of Representatives. At a Republican Party retreat this week Ryan tempered the expectations of conservative members who may have expected the White House and Democrats to give to GOP demands in the face of the debt ceiling. Ryan told the more conservative members that the must recognize the “realities of divided government” and also appreciate the consequences of going over the debt limit. Ryan indicated that the GOP is considering a short-term debt limit extension, and never mentioned any spending cuts being negotiated in exchange for that extension.
Today, Sen. John Cornyn (R-TX) was more definitive in an interview with the Houston Chronicle, saying, “We will raise the debt ceiling. We’re not going to default on our debt.” As Talking Points Memo notes, in early January Cornyn had threatened to take the country past the debt ceiling, but now has a very different tone.
Republicans seem to have recognized that the debt limit threat is simply not credible. First, a breach of the debt limit would have disastrous effects on the economy, including many of the Republicans big money donors. Second, polls show that the public would blame congressional Republicans should the economy implode from a debt limit standoff. Taken together, those two facts take away any leverage the Republicans may have in the debt ceiling fight.