Wall Street to the Rescue?

It's time for business leaders to talk John Boehner out of his tea party-induced madness.

By SHARE
From left, Goldman Sachs Group, Inc. Chairman Lloyd Blankfein, American International Group CEO Robert Benmosche, and GE Capital Chairman Keith Sherin arrive at the White House in Washington, Wednesday, Oct. 2, 2013, for a meeting with President Barack Obama.

Week two of the shutdown. Is there any way out? Some suggest President Obama needs to give Speaker John Boehner a face-saving "out" to end the government shutdown, such as delaying the individual mandate or the medical device tax in the Affordable Care Act.

But here's the key question: What would be next? If President Obama gives in to the tea party on Obamacare this time, what would be the tea party's demand next year?

Speaker Boehner is currently cowed by a small band of extreme conservatives. This year, the Affordable Care Act is at the top of extremists' demand list. Indeed, the current shutdown and looming default on the debt were part of a plan hatched by conservative leaders back at the beginning of 2013 to end Obamacare by any means necessary, as the New York Times reported this weekend. (Never mind the inconvenient fact that it is impossible to "defund Obamacare" through annual appropriations because of how federal budgeting works, as the non-partisan research arm of Congress warned Boehner and others.)

[See a collection of political cartoons on the tea party.]

But what will they demand next year to keep the government open and out of default? Surely, Obamacare is not the only law irking tea partiers. Couldn't they hatch the same scheme to shut down the government next year over abortion? Or food stamps? Or funding for climate change science? Where does it end?

If President Obama gives in now, what kind of bad behavior would he be sanctioning? Obama, a former constitutional law professor, is surely aware of the significance of setting new precedent by caving in now to a small faction in one house of Congress that wants to revisit a policy that is unrelated to the federal budget and federal debt, was already voted on by Congress, signed by the president, upheld by the Supreme Court, ratified in the 2012 presidential election and is proving so popular that millions of potential users are overwhelming the healthcare.gov enrollment website.

Of course, that doesn't mean there's any easy way out. As Robert Mnookin, chair of Harvard's Program on Negotiation and author of "Bargaining with the Devil: When to Negotiate, When to Fight," told NPR this weekend: "If two cars are entering an intersection, headed toward one another, playing a game of chicken, and one of the drivers can take the steering wheel off and toss it out the window, that person wins the game." So does that mean the tea party wins because it's willing to be so reckless?

[See a collection of political cartoons on the government shutdown.]

Perhaps Wall Street and other corporate leaders are the key to a return to sanity in the Republican party. Wall Street and corporate leaders have historically had the ear of both Republican leadership and members, and they may be able to drown out the tea partiers today. Although Wall Street may not care about federal parks being closed, children with cancer being denied access to life-saving National Institutes of Health trials, food inspectors off the job or coal miners being killed as inspectors stay home, they sure as heck care about what happens to the Dow Jones Industrial Average.

As economists universally acknowledge, a default on the debt would have a catastrophic impact – including on the stock exchange. But even the current government shutdown is hitting corporate interests as well as stock performance. Bloomberg News calculated the shutdown costs $300 million per day in lost economic output. The Wall Street Journal is reporting layoffs and production disruption at defense contractors and some manufacturing companies. Just yesterday, the Dow dropped below 15,000 because of anxiety over the shutdown and fear of default.

Wall Street's top bankers met with President Obama last week to suggest a default on the debt would be disastrous. They need to book time with Speaker Boehner as well. It might help balance out what he's hearing from the Tea Party. Wall Street and other corporate leaders could urge Boehner to keep social policy fights out of any debt default negotiations and at least allow a vote on a "clean" resolution to re-open the government.

Moderate House Republicans say they've got enough supporters, together with House Democrats, to pass a "clean" government funding bill. But Speaker Boehner said on Sunday he would not schedule a "clean" vote on the shutdown because "the threat of Obamacare is so important." But if Obamacare is "so important" this year, then what will be "so important" as to shut down the government or cause a debt default next year? As we've suggested before, the GOP is transforming into the GOTP (Grand Old Tea Party) before our very eyes.

Just possibly, Wall Street and corporate leaders might be a strong enough voice to remind Republican leadership to keep tea party fights out of the way of the economy.

  • Read Susan Milligan: Obama, Fox News and a Fake Muslim Museum
  • Read Stephanie Slade: The Shutdown Shows Congress Needs More Ideologues, Not Fewer
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