Happy Debt Limit Day, America! Well, maybe not that happy. And it’s not a happy day for the head of the International Monetary Fund, either. And not because Greece’s economy is still a mess.
The arrest of Dominique Strauss-Kahn over the weekend, on charges he sexually assaulted and falsely imprisoned a maid at Manhattan’s Sofitel hotel. The WSJ has some new details, including how the fuzz used a cellphone to nab Kahn, and the fact that Kahn has hired the lawyer who previously repped Michael Jackson and Sean “P Diddy” Combs.
The arrest could touch off a push within the IMF to break the European monopoly on leadership of the organization that often bails out third world countries at a staggering cost. Current bailouts are not expected to be impacted. But the arrest could shake up French politics, as Strauss Kahn was expected to be the strongest challenger to French President Nicolas Sarkozy.
Ewww trending: Kahn “the great seducer…”
But the big news today is that the U.S. has officially hit the limit on the national credit card. This isn’t the first time the U.S. has hit the debt ceiling, but it’s the first time in a long time that there is a real possibility of national default.
The Journal has the outlines of a potential deal – emphasis on “potential,” since Republicans are balking at including any tax increases, though the paper also reports John Kyl may be willing to look at “revenue increases” of some kind, as long as tax rates don’t go up. In the same article Newt Gingrich puts forward a foolish idea for short term, multiple debt ceiling increases that would probably tank the financial markets.
No wonder George Will dismissed him as “not a serious candidate” on Sunday. (BTW: Will says the White House scramble will come down to one of three men: Barack Obama, Tim Pawlenty and Mitch Daniels. Hm…
The Treasury Department believes it could continue to function without a debt limit deal until August, in part by raiding federal pension funds and by selling off government assets. The Washington Post ponders the possible contents of a garage sale by Uncle Sam.
From the editorial page of the NY Times, Paul Krugman urges President Obama to confront the hostage takers, for the sake of the Constitution:
So hitting the debt ceiling would be a very bad thing. Unfortunately, it may be unavoidable.
Why? Because this is a hostage situation. If the president and his allies operate on the principle that failure to raise the debt ceiling is an unthinkable outcome, to be avoided at all cost, then they have ceded all power to those willing to bring that outcome about. In effect, they will have ripped up the Constitution and given control over America’s government to a party that only controls one house of Congress, but claims to be willing to bring down the economy unless it gets what it wants.
Now, there are good reasons to believe that the G.O.P. isn’t nearly as willing to burn the house down as it claims. Business interests have made it clear that they’re horrified at the prospect of hitting the debt ceiling. Even the virulently anti-Obama U.S. Chamber of Commerce has urged Congress to raise the ceiling “as expeditiously as possible.” And a confrontation over spending would only highlight the fact that Republicans won big last year largely by promising to protect Medicare, then promptly voted to dismantle the program.
But the president can’t call the extortionists’ bluff unless he’s willing to confront them, and accept the associated risks.
According to Harry Reid, the Senate majority leader, Mr. Obama has told Democrats not to draw any “line in the sand” in debt negotiations. Well, count me among those who find this strategy completely baffling. At some point — and sooner rather than later — the president has to draw a line. Otherwise, he might as well move out of the White House, and hand the keys over to the Tea Party.
Wanted: Muommar Gaddafi, his son, and his intelligence chief, by the International Criminal Court, for war crimes.
On an up-note, the Space Shuttle Endeavor successfully completed its final lift-off. The commander on board: Mark Kelly, husband of Arizona congresswoman Gabby Giffords, who was wounded by a gunman as she held a town hall meeting last fall. Giffords traveled to Cape Canaveral, Florida to watch the launch.
Also in Florida, the arrest of father and son Imams presents a challenge to the feds, who want to keep the lines of communication open with the Muslim community.