Boehner's Offer Is a Travesty

By John Cassidy, The New Yorker

11 October 13

'Yippee!'

hat was the attitude in the financial markets this morning, when it became clear that the Speaker of the House, John Boehner, was offering to raise the debt ceiling for six weeks. The Dow shot up two hundred points, and the cost of insuring against a default in treasuries fell sharply.

It was what Wall Street calls a "relief rally," but for the rest of us there's not much to cheer about. Far from solving the country's budget crisis, the G.O.P. offer would extend it until Thanksgiving at the earliest. In the meantime, large parts of the federal government would stay closed: the House Republicans are sticking with their position that they won't pass a new funding bill until the White House agrees to big changes in Obamacare. Yellowstone National Park, the Smithsonian, and the National Zoo wouldn't reopen; federal agencies including the Consumer Product Safety Commission, Federal Communications Commission, and NASA would remain in a state of partial shutdown; and many furloughed federal employees would stay at home.

The deal wouldn't even solve the debt-ceiling crisis. It would simply kick it back for six weeks, during which time there would be negotiations about cuts to entitlements and other spending programs. Since the two sides are as far apart as ever on these issues, there is no realistic prospect of an agreement emerging from these discussions. Come mid-November, we will almost certainly be back to where we were yesterday, with the markets starting to fret about a possible default. But, by that stage, the government shutdown will be having a much bigger impact on the economy than it is now. For a week or two, the country can scape along without some essential government services. But an unprecedented two-month shutdown would have untold effects.

Continue Reading: Boehner's Offer is a Travesty