The fiscal cliff and political narratives: what to expect with the debt ceiling

Ezra Klein explains our current political narrative,“the country is caught between pragmatists who can’t hold their ground and radicals who can’t compromise”, and what it means for the upcoming debt ceiling negotiations.

“But both Republicans and Democrats can’t be right. If we take the lessons of this negotiation, here’s what will happen: The White House will negotiate over the debt ceiling. They’ll say they’re not negotiating over the debt ceiling, and in the end, they may well refuse to be held hostage over the debt ceiling, but the debt ceiling will be part of the pressure Republicans use to force the next deal. The White House fears default, and in the end, they always negotiate.

That said, the Republicans aren’t quite as crazy as they’d like the Democrats to believe. They were scared to take the country over the fiscal cliff. They’re going to be terrified to force the country into default, as the economic consequences would be calamitous. They know they need to offer the White House a deal that the White House can actually take — or at least a deal that, if the White House doesn’t take it, doesn’t lead to Republicans shouldering the blame for crashing the global economy. That deal will have to include taxes, though the tax increases could come through reform rather than higher rates.”

The White House will (have to) negotiate over the debt ceiling, and Republicans will (have to) offer the White House a deal that includes taxes — expect outrage from the far left and right! Because if either side were to go completely off-script:

“[...] there’s a third possibility, too: That the White House is wrong [that] the Republicans will compromise, that the Republicans are wrong that the White House will fold, and so we really will breach the debt ceiling, unleashing economic havoc.”

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