I appreciate the input from Dan and Steve.
Steve, I’m afraid either I wasn’t clear enough or you misread me. I was raising a question about the timing of the downgrade warning, and about who is trying to shape the narrative. I agree with you and Des Lachman that the downgrade warning is a good thing in the long run. It was also inevitable. The cliff we’re going off has to be addressed, and anything that can nudge us in that direction before it’s too late is a positive.
Moreover, you describe “the Republican argument that something has to change right now.” That argument is surely right, but it sidesteps the issue I raised. One can certainly agree that something has to change right now and disagree about whether that something has to include raising the debt ceiling.
I keep hearing Republican leaders and conservative pundits say both that the debt ceiling has to be raised and that this step must be accompanied by real spending reforms. I’m convinced that the latter is true, but not the former. (FWIW, I’m not beyond convincing on the debt ceiling, but I have not found the arguments made so far very compelling.) But for purposes of our present discussion, the point is that the S&P move could be helpful to both Democrats who want the debt ceiling raised and Republicans who want real changes in spending right now. Indeed, that’s clear from the remarks of Majority Leader Eric Cantor, excerpted in Dan’s post. Cantor is essentially saying that the GOP will increase the debt limit, but will demand a steep price for doing so.
This, I’d suggest, duplicates the tactical error Pete Kirsanow highlighted in the budget battle, wherein Republicans took their main weapon — a government shutdown — off the table. Here, too, by signaling that they’ve already accepted the need to raise the debt limit, Republicans are ensuring that the price Rep. Cantor & Co. hope to exact will not be as steep.