House Delays Debt Ceiling Fight

The Republicans in the House knuckled under to reality yesterday. They finally realized they were only hurting themselves with their attempt to hold the U.S. (and world) economies hostage to force government cuts that aren't supported by most Americans. So they backed down on their threat to refuse to raise the debt ceiling.

They will claim that they did not vote to raise the debt ceiling, but only to suspend the debt ceiling requirement until May 18th. But the reality is that the government can now borrow more money to operate the government, and can exceed the current limit. That means when the discussion is taken up again later on, the debt ceiling will already be higher than it is now. And whether they want to admit it or not, that is the same thing as raising the debt ceiling.

This does not mean the Republicans will not continue to hold the government and the economy hostage to get cuts -- but only that they have delayed doing this for a few months. They are hoping that they can get the public on their side by tying the debt ceiling argument in with making a new budget. I think they are dreaming. They will still be asking for the same cuts that will hurt the elderly (benefit cuts to Social Security and Medicare) and other Americans (the poor, children, the unemployed, etc.) -- and the American people have made it clear they don't want that.

And a new poll done by Bloomberg News shows that even investors (free enterprise believers that would normally back the Republicans) don't like the obstructionism by the GOP that is keeping the federal government from agreeing to a budget with both cuts and new revenues. At lest 47% of the investors responding to the poll say they are either pulling money out of the U.S. market (8%) or holding back on investing in the U.S. market (39%), because of the refusal of Congress to compromise on a budget and revenues.

And most of them seem to be blaming Republicans more than President Obama. About 55% of those investors have a favorable opinion of President Obama (and 41% a negative opinion), while only 31% have a favorable opinion of House Republican leader John Boehner (and 46% have a negative opinion of him). These people can't be happy that House Republicans kicked the can down the road yesterday, instead of compromising with Democrats to solve economic problems.

Will the GOP shut down the government in May. I doubt it. They have shown by their action yesterday that they really don't have the will to follow through on their threats. But don't expect anything to be solved then either, because the likelihood is that they'll just kick that economic can further down the road.