Speaker of the House John Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) seemingly have rallied enough of their House allies to push the battle over causing a U.S. government default down the road, with a temporary three-month extension of the government's borrowing authority (or "debt ceiling"). But House Republicans have not changed their ransom demands. They've simply chosen a different hostage. For now.
House Republicans are still demanding benefit cuts to Social Security, Medicare and Medicaid. They are still demanding deep budget cuts that would jeopardize the economic recovery and increase unemployment. And they are still refusing to cancel across-the-board budget cuts that are scheduled to take place in March 2013 by asking Wall Street to contribute more tax revenue or closing tax loopholes for the richest 2% of Americans.
While House Republicans have put on hold their threat to tank the economy by causing a government default, they have shifted their attention to tanking the economy by shutting down the government if they do not get their way.
The willingness of House Republicans to postpone the debt ceiling fight is a welcome development. It is a minor concession to pressure from working family advocates. And it suggests that House Republicans are slowly coming to the realization that they do not have as much leverage as they thought they had to pursue policies that voters overwhelmingly reject—and that, in fact, voters overwhelmingly rejected in the past election.
But House Republicans have not sworn off hostage-taking. Far from it. They will even revive the threat to cause a government default in three months and they will be back in three months with more hostage demands.
President Obama has signaled he will support a temporary extension of the debt ceiling. However, the Obama administration supports a long-term increase in the debt limit that would increase certainty and economic stability. In a press release, the administration stated:
A temporary solution is not enough to remove the threat of default that Republicans in the Congress have held over the economy. The Congress should commit to paying its bills and pass a long-term clean debt limit increase that lifts self-inflicted and unnecessary uncertainty from the nation's economy.
The solution is to respect the mandate of the voters in the last election, which could not be clearer: close loopholes for Wall Street and the richest 2% of Americans and protect Social Security, Medicaid and Medicare benefits from cuts.