House Speaker John Boehner is stuck between the tea party and a hard place. No matter what happens in the debt ceiling debate, it shouldn’t surprise anyone if the Ohio Republican is the top dog in the House for just one term.
On the surface, the Ohio Republican seems perfectly suited for the role of negotiator. You can’t grow up as one of 12 siblings in a house with just two bedrooms and one bathroom without learning something about the art of compromise. But Boehner is in a bind, knowing that the U.S. debt ceiling has to be raised soon, but caught between tea party Republicans who won’t give an inch and a president and Senate Democrats who won’t roll over and play dead.
It’s a lose-lose mess for Boehner. If he throws the Democrats a bone, perhaps agreeing to save money by tightening some tax loopholes, he risks not getting enough support from his own party to push a debt bill through the House. But if he tries to appease the tea party wing of the GOP, the bill won’t get enough votes to clear the Senate. Either outcome threatens to rattle the already shaky U.S. economy.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
A third option -- kicking the can down the road -- isn’t likely to make those who lend money to the U.S. by buying Treasuries more inclined to keep buying without upping the risk premium. They’ll demand higher interest rates, which will both cost the government billions of extra dollars at a time when it can least afford it and increase borrowing costs across the board for consumers, homeowners and businesses. Moreover, the prospect of another big political standoff over the debt ceiling in the middle of next year’s presidential race is unappetizing, at best, and potentially catastrophic, at worst. That’s where things seem to be headed, though.
Congress and President Obama are on the verge of missing the best chance in a generation to get a handle on the debt and deficit, and to tackle changes to the Social Security and Medicare systems, which will only get shakier financially as more baby boomers stop paying in and start taking out benefits. Boehner and Obama seemed to be moving in the direction of such a megadeal -- combining big spending cuts and entitlement reform with additional revenues. But a relative handful of GOP lawmakers, mostly first-termers, decided that approach wasn’t their cup of tea.
Here’s the problem: Tea partyers in Congress don’t have enough votes to pass anything, but they can stop nearly everything, at least until fellow Republicans stand up to them and explain the gravity of the situation. So far that hasn’t happened. Getting control of the country’s debt and eliminating wasteful spending is a laudable goal, but allowing one part of one party that controls only one piece of the American government to dictate policy is unworkable.
That brings us back to Boehner. At some point -- soon -- he has to decide whether doing the tea party’s bidding is the best course for his party, not to mention for the nation. Either way, the decision may be personally painful. Tick off the tea party, and Boehner is likely to see House Majority Leader Eric Cantor (R-VA) take over as speaker in 2013. But anger enough voters, and Boehner could see Democrats win back the House and Obama claim a second term in the White House.
What’s the speaker to do? It’s not too late to strike a deal with the president. Boehner could give a little ground on tax revenues but insist that the president put forth his plan to tighten Medicare and Social Security benefits and hope that Obama takes a political hit for that. Then the speaker could hammer away at the high unemployment rate and the sluggish economy and let voters decide which candidates and which party they trust to move the country forward.
It’s a risky strategy, for sure, and there’s no guarantee of success. But it would give Boehner at least a fighting chance to remain relevant instead of retired.
-
What Is a Qualified Charitable Distribution (QCD)?Tax Breaks A QCD can lower your tax bill while meeting your charitable giving goals in retirement. Here’s how.
-
Embracing Generative AI for Financial SuccessGenerative AI has the potential to reshape how we approach learning about and managing our personal finances.
-
AI Regulation is Looming: Kiplinger Economic ForecastsEconomic Forecasts Find out what Washington and regulators have planned for artificial intelligence.
-
The Biden Tax Plan: How the Build Back Better Act Could Affect Your Tax BillPolitics Depending on your income, the Build Back Better Act recently passed by the House could boost or cut your future tax bills.
-
Kiplinger's 2020 Election ForecastPolitics For nearly a century, The Kiplinger Letter has forecasted the outcome of presidential elections to keep readers informed of what's coming and what it means for them. Here's our call for 2020.
-
The 2020 Election and Your MoneyPolitics We’ve assessed how the presidential candidates’ stances on financial issues will affect your wallet.
-
5 HEROES Act Provisions with a Good Chance of Becoming LawPolitics The massive federal stimulus bill just passed by the House of Representatives is "dead on arrival" in the Senate. But a few proposals in the bill have enough bipartisan support to eventually become law.
-
Vote by Mail: A State-by-State Guide to Absentee Ballot VotingPolitics With health authorities recommending people continue to social distance, the idea of voting by mail is becoming an increasingly hot topic.
-
9 Ways COVID-19 Will Change the 2020 ElectionsPolitics The 2020 election will be like no other in history, as the COVID-19 pandemic will upend the business of politics as usual.
-
How to Run for Local OfficePolitics If you’ve ever thought that you could do a better job than the elected officials currently in office, here’s how to launch a campaign—and win.
