On one level, this is a bluff. GOP leaders have said the limit will be raised—not exactly a starting point from which to dictate terms. But on the perception level, on which so much in Washington turns, this creates a delicate and dangerous dynamic. Their tough talk and apparent success in the spending battle create dueling expectations: Tea Partyers who thought $38 billion—let alone $352 million—was not enough in the prelude will expect a "real" victory, while politicos who thought brinkmanship was a winning strategy will push it again.
But the debt ceiling brink is more dangerous, and not simply because of the economic consequences. There was great public pressure to avoid a shutdown, but that's not the case with a debt ceiling increase. A recent NBC News/Wall Street Journal poll found that two thirds of voters oppose raising the debt ceiling. This isn't the shutdown replayed; it's TARP, which proved to be an existential vote for many lawmakers.
All of this points to another walk right up to the edge. But the global economy could suffer before it is reached. Why? To again use phraseology conservatives will understand: "uncertainty." The mere prospect that the United States might default could spook global markets. Republicans "don't seem to understand that you can't put everything back in the box," one Wall Street executive told Politico last week. "Once that fear of default is in the markets, it doesn't just go away. We'll be paying the price for years in higher rates."
It is a leverage moment, indeed.