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How Capitol Hill sniping could set off a national debt ceiling bomb

Even as both parties cite the need for progress on the budget, the partisan sniping is becoming unusually personal. Could markets get the jitters if the rancor lasts up to the debt ceiling deadline?

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J. Scott Applewhite/AP
Senate Majority Leader Harry Reid of Nev. (c.) walks with Senate Majority Whip Richard Durbin of Ill. (l.) and Sen. Charles Schumer (D) of New York after a news conference on Capitol Hill in Washington, Thursday, June 30.
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J. Scott Applewhite/AP
Senate Minority Leader Mitch McConnell of Ky. speaks on Capitol Hill in Washington on June 28.

Congress鈥檚 turn this week to unusually pointed and personal attacks could signal trouble as lawmakers work to close a deal on raising the debt ceiling, now set at $14.3 trillion.

Instead of rallying the Congress, President Obama鈥檚 call on Wednesday for a more 鈥渂alanced approach鈥 to the nation鈥檚 deficit crisis 鈥 meaning the deficit should be closed with both spending cuts and increased tax revenues 鈥 set off more intense rounds of sniping on Capitol Hill.

Conventional campaign wisdom rewards 鈥済oing negative.鈥 To not return opposition fire in kind 鈥 and then some 鈥 is viewed as weakness. But lawmakers face another concern as they grapple with a debt crisis set to take hold Aug. 2 鈥 that their toxic rhetoric could have the unintended consequence of convincing US creditors that Washington can鈥檛 or won鈥檛 solve its debt crisis.

鈥淵ou鈥檙e dealing with a tactical nuclear weapon here. You don鈥檛 want to be playing with the timing device right down to the last second,鈥 says David Walker, former US comptroller general and a founding member of No Labels, a bipartisan advocacy group.

If the harsh partisan sniping and gridlock over the debt crisis continues, 鈥測ou could see a market reaction a week before Aug. 2, if it looks like things aren鈥檛 coming together,鈥 he says.

Senate Democrats spent their last day in session this week blasting Republicans for sacrificing the most vulnerable Americans to protect tax breaks for owners of yachts, corporate jets, and race horses, and corporations that ship jobs overseas.

Sen. Charles Schumer (D) of New York, who is charged with policy and messaging for the Senate Democratic caucus, charged on Thursday that Republicans鈥 鈥渟lash and burn approach鈥 to deficit reduction had deliberately undermined the nation鈥檚 economic recovery.

鈥淲e need to start asking ourselves an uncomfortable question: Are Republicans slowing down the recovery on purpose for political gain in 2012?鈥 he said, in a speech before the Economic Policy Institute in Washington.

It鈥檚 a theme some other Democrats have voiced previously, but mainly speaking off the record. The high visibility and timing of these remarks at a critical point in the debt talks give them special prominence.

鈥淭he result is that Republicans aren鈥檛 just opposing the president anymore. They are opposing the economic recovery itself 鈥 and all that means for America鈥檚 working and middle class families,鈥 Senator Schumer added.

If Republicans refuse to consider tax increases as part of a compromise package, 鈥渢hey are threatening all of us, the whole country, with economic catastrophe, in order to protect the sky-high income of millionaire hedge fund managers and offshore tax avoiders,鈥 said Sen. Carl Levin (D) of Michigan, speaking from the floor on Thursday and referring to two of the loopholes that Republicans have rejected as part of a deficit deal.

Republicans rushed to the floor on Thursday to protest what they called class warfare by the White House and Senate Democrats. 鈥淚鈥檓 disappointed because America does not have a tradition of class warfare,鈥 said Sen. Marco Rubio (R) of Florida. 鈥淚t鈥檚 class warfare and the kind of language you鈥檇 expect from the leader of a third world country, not the president of the United States.鈥

Sen. Jim DeMint (R) of South Carolina dubbed President Obama the 鈥渁ddict in chief鈥 on spending. 鈥淗e鈥檚 played dozens of rounds of golf and had many, many fundraisers around the country, but he has been AWOL on this issue.鈥

鈥淎nd his condescending speech yesterday that told Congress to solve the problem ignored the fact that he was elected president to lead, and yet he鈥檚 not even following when it comes to this issue,鈥 he added.

Senate Republican leader Mitch McConnell, also speaking from the floor, invited the president to come to the Capitol to 鈥渉ear directly from Senate Republicans why what he鈥檚 proposing will not pass 鈥 and finally start talking about what鈥檚 actually possible.鈥

Responding to the invitation, White House Press Secretary Jay Carney told reporters: 鈥淲hat the senator invited the president to do was to hear Senate Republicans restate their maximalist position. We know what that position is鈥. That鈥檚 not a conversation worth having.鈥

鈥淲e also need to talk about what鈥檚 possible,鈥 McConnell spokesman Don Stewart replied. 鈥淐arney missed that part of the speech.鈥

What distinguishes the partisan conflict in the current Congress from that in its predecessors is the high ideological divide, says Walker of No Labels, who spent nearly a decade as head of the Government Accountability Office, raising the profile on what he called the nation鈥檚 unsustainable fiscal course.

鈥淚 believe that we鈥檝e always had partisanship, and we clearly continue to have partisanship, but we have in this country more of an ideological divide than we鈥檝e had historically,鈥 he says.

鈥淲e have more members of the Republican Party who are very conservative, and more elected officials in the Democratic Party who are very liberal. Whereas 60 to 70 percent of Americans are in what I call the 鈥榮ensible center,鈥 that 60 or 70 percent is not adequately represented in Washington,鈥 he adds.

鈥淵ou have a significant percentage of Republicans who will not even consider increases in revenues and Democrats who will not consider cuts in the social insurance contract,鈥 he adds. 鈥淕iven where we are headed, you鈥檝e got to do both.鈥

鈥淭he last 10 years have clearly been the most fiscally irresponsible in the history of the US and both parties are to blame for that. Our current situation threatens America鈥檚 standing in the world and the future standing of living of Americans at home.鈥

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