The ugliness of politics on Capitol Hill came into full view Friday evening as House Speaker John Boehner succumbed to pressure from Tea Party insurgents within his Caucus and pushed through legislation that included a provision tying any future increase in the debt ceiling to a balanced budget amendment. It was the clearest sign yet that in-fighting within the Republican Caucus had wrestled control from Speaker Boehner and left him helpless to negotiate in good-faith with the Democratic led Senate. No sooner had the House passed the bill by a straight party-line vote 218-210, with 22 Republicans opposed, did the Democrat controlled Senate kill the legislation and started working on its own bill. Earlier in the day President Obama issued a statement calling for both parties to work out a compromise that would meet his insistence on balance, spending cuts and revenue enhancement, and that he could support and sign by Tuesday, the deadline before the nation is in default of his financial obligations.

House Republicans pushed a bill that they knew beforehand would not be supported by the White House, and would face certain rejection by the Senate. President Obama had also made it clear that he would reject any bill that included language that would require him to repeat the current negotiations, with all of its acrimony, within the next year. The President insisted on a long-term plan that includes spending cuts and revenue enhancements; with the latter preferably coming by adjusting the prevailing tax rates and ending the Bush era tax cuts for higher income taxpayers. The balanced budget amendment was a clear nod by the Speaker to the Tea Party and a sign of the right’s dominance within the Republican Caucus in the House. The insistence that any future increases in the debt ceiling be contingent upon Congress passing a constitutional amendment would not only set a dangerous precedent it would bound the hands of future Presidents from taking reasonable steps to manage the nation’s finances. It would also trigger a long and protracted battle as the process to pass the amendment would trigger confrontations in states across the country. The inclusion of language requiring a balanced budget amendment was aimed directly at forcing a confrontation with the President, and risking default, for the sake of setting the stage for the 2012 presidential campaign.





Days of intense talks between Speaker Boehner and members of his Caucus laid bare the degree to which a contingent of renegade, Tea Party backed freshman had pushed House Republicans to the far right, even beyond the preferences of many Republicans as polling has indicated. The first demand laid down was a no tax increase pledge pushed by conservative activist Grover Norquist and signed by most members in the House. The pledge made it impossible for the Speaker to even consider the “Grand Bargain” proposal put forth by the bipartisan “Gang of Six” in the Senate. It was a blow to negotiations and the possibility of a real compromise as President Obama had conceded to spending cuts in entitlement programs that were far beyond the preference of most Democrats on the Hill and Democratic voters. In fact, the President was taking heat from progressives in his party for what they charged was an abandonment of the party’s core principles. Despite the concessions from the White House, the Tea Party pushed the Speaker further right and insisted the balanced budget amendment language be included in the House bill to gain the support of conservative House members. In effect, holding the entire negotiation hostage over a provision that has nothing to do with what should be the routine act of increasing the debt ceiling.

With time running out, negotiations will continue over the weekend between both parties but the developments on Friday puts the nation dangerously at-risk of defaulting on its financial obligations. Default would be historic and uncertain, with no one quite sure what it would mean for the government’s ability to pay its bills and how financial markets would react. It has been widely reported that Treasury Secretary Timothy Geithner has been working on a contingency plan in the event the nation defaults on its debt. One certainty is that the nation’s credibility will suffer around the world as U.S. debt has always been considered a safe investment. The bitter fight on Capitol Hill, and the threat of default, is playing out as second quarter results indicate anemic economic growth and a slow recovery. Some economists are suggesting that the nation could slip back into recession, a frightening scenario when millions of Americans are still without work. The next several days of political jockeying in the nation’s capital will have implications far beyond adjusting the nation’s debt limit.