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Geithner rains on Boehner's parade

Associated Press

House Speaker John Boehner (R-Ohio) yesterday said he would do in 2013 exactly what he did in 2011: use the debt ceiling to hold the nation hostage. As Boehner sees it, Democrats have to give in, or he'll trash the full faith and credit of the United States and crash the economy on purpose.

And why did Boehner declare his intentions in mid-May? Because the Speaker is trying to shape upcoming tax-policy negotiations, applying leverage to get what he wants. The problem, as Treasury Secretary Tim Geithner noted yesterday, is that Boehner's calendar doesn't quite work.

At the end of this year, an enormous fight is looming over taxes and revenue, when all of the Bush-era tax cuts are set to expire, just as major spending cuts from the debt-ceiling agreement are set to begin. This doesn't directly relate to the debt-ceiling fight, but Boehner wants it to -- yesterday was partly about sending a signal to the White House. The Speaker was effectively saying, "I'm holding a gun to the nation's head; if you don't want me to pull the trigger, don't push for any tax increases."

But Geithner spoke at the same fiscal summit, and said something interesting.

"[O]n the current estimates ... we're likely to hit the debt limit sometime before the end of the year, but Congress has given the executive branch a set of tools that buy [administration officials] some time. And those tools will probably take us into the early part of 2013, thus separating somewhat the timing of the expiry of the tax cuts and the sequester with the ultimate need for Congress to act on the debt limit. You know, they should do it as soon as they can, but that's the basic sequence in this context."

That may sound a little clunky, but in everyday terms, the Treasury Secretary was explaining that policymakers will be dealing with expiring tax cuts and triggered spending cuts in December, but won't be dealing with the debt ceiling until January and February.

Boehner wants to tie the debt limit to the December discussion, but the administration has no reason to play along. Indeed, at this point, we don't even know who'll be the President or the House Speaker the next time the ceiling needs to be raised.

To be sure, the variables may change, and as Brian Beutler noted, if federal receipts slow, the deadline for the debt-ceiling vote may come much sooner.

But for now, Boehner has a strategy that he probably won't be able to execute.