Debt limit debacle: the sequel

>>> behind closed doors today, speaker john boehner revealed the 113th congress is not going to learn the lessons of the 112th, brace yourself for the debt ceiling debacle, part two.

>>> john boehner once again holds the speaker's gavel. only in his hands, it is weightless and makes no sound.

>> the number one issue is still the economy.

>> the new jobs reports shows 155,000 jobs added.

>> that is about what was expected.

>> things only get worse for john boehner .

>> he is getting hit from all sides.

>> we're standing here not to be something but to do something.

>> if washington was going to do something they had their opening.

>> it is a time to rise.

>> the next flight, the debt ceiling.

>> i think that is frankly a dead loser.

>> it is time to rise.

>> we really are playing with dynamite with the debt ceiling.

>> is the glass full or half empty.

>> tax increases destroy jobs.

>> we always assume the republicans have the leverage in the debt ceiling negotiations.

>> i will not have another debate with this congress . they should pay the bills they have already racked up.

>> he is the president.

>> class a statesmanship.

>> it is the time to rise.

>> will the 113th congress be any less dysfunctional than the 112th?

>>> with the fiscal cliff or curve or slope or whatever you want to call it, i'm glad we don't have to have this debate anymore. newly -- with that behind us, newly reelected house speaker john boehner held his first closed door meeting with the 112th caucus to discuss this new year's resolution from president obama .

>> i will not have another debate with this congress over whether or not they should pay the bills that they have already racked up through the laws that they passed.

>> sources inside the morning's republican caucus meeting say boehner told his members he will again use the debt limit as leverage to cut spending. so here is the deal. you give me spending cuts, i don't crash the global economy , sound good? senate minority leader mitch mcconnell announced the same, saying "the fiscal cliff deal was the last word on taxes. now the conversation turns to cutting spending on the government programs that are the real source of the nation's fiscal imbalance ." and the upcoming debate on the debt limit is the perfect time to have that discuss. perfect, the problem is not even republicans believe that is going to work anymore.

>> they have got to find in the house a totally new strategy. i mean, confronting -- for example, everybody is now talking about okay, now comes the debt ceiling. i think that is frankly a dead loser, because in the end you know it is going to happen. the whole national financial system is going to come into washington by television and say oh my god, this will be a gigantic heart attack, the entire economy will collapse, you guys can't be responsible, and they will cave.

>> so newt gingrich , time to wander off the republican reservation, at least occasionally. but he is on the same page as the editorial board , which wrote "the next challenge will be the debt deadline, arriving in march, mr. boehner says he wants a dollar in spending cuts in regard to the increase. the political reverse will be far worse if the republicans start this fight only to cave in the end. you are not going to be able to take a hostage you can't shoot." but they think that even if this republicans won't really hurt the hostage, the white house will still blink just in case republicans are serious this time. and conservatives, they believe the exact same thing. that was the whole theory behind the whole fiscal cliff deal. i disagree. now, i don't think the white house has much credibility when they say they won't negotiate over the debt ceiling. they will, they negotiate over pretty much everything. but i am convinced they won't pay a big ransome. what will the president's initiative be? he laid it out.

>> my principle has been, let's do things in a balanced, responsible way. and that means the revenues have to be part of the game , in the automatic spending cuts, as well as spending cuts. now the same is true for any future deficit agreement. if republicans think that i will finish the job of deficit reduction through spending cuts alone, if they think that is going to be the formula for how we solve this thing, then they have another thing coming.

>> all right, you catch that. the white house seriously, no kidding around says they will not accept a bargain in which what they got was an increase in the debt limit. so was congress , and what they get is congress simply agreeing to pay its bills. that is not their payoff. they see it as a historic responsibility to end the dawning precedent that minorities in congress can hold up the u.s. in the debt limit. so it will be up to boehner and connor to decide the deficit package and spending cuts and revenue, or taking the whole country into default. and i don't think they will choose default. for a couple of reasons here. first, the republicans are not nearly as crazy as the tea party would have you believe. in the end, they were not even willing to go over the fiscal cliff . and defaulting on our debt would do far more damage to the economy than the fiscal cliff . and republicans are going to receive far more of the blame. remember, a lot of people thought democrats kind of did want to go over the fiscal cliff . because a lot of democrats kind of did want to go over the fiscal cliff . they thought they could get a better deal on the other side. no one anywhere thinks in particularly, the democrats, want to default. president obama would raise it, no question, tomorrow morning if congress gave him that bill. so republicans would take all the blame here. making matters worse, even republican leaders have acknowledged we can't default.

>> i would agree with the president that the national debt limit must be raised.

>> we know default is not an option.

>> we cannot allow our nation to default on our debt.

>> default is not an option, but we'll do it if you don't do what we say? that is a little bit of a hard argument. number two here, what exactly do the republicans want to cut? they have been afraid to name specific cuts to social security or to medicare. medicaid cuts they will name. but they're a total nonstarter in the white house for obama care. so what will it be? will they force america into default on behalf of spending cuts that they can't name? because if they did name it it would be too unpopular? seems a little unlikely. third, president obama got the tax increases on the people he wanted. this is important, now he can get more money through tax reform . and john boehner and a lot of republicans are on record offering revenue through tax reform . mitt romney ran on a presidential platform that included proposing loopholes and capping reductions. republicans are much more flexible on tax reform . most people never even heard of the debt limit and certainly didn't appreciate the consequences of busting through it. and that including many of the powerful economic interest groups in washington . now they understand it pretty well and also understand who will be to blame if we go over. the honeywell chairman dave cody is a republican, but told "the new york times" today that the whole idea of using the debt ceiling, i'll do this horrible thing to all of us if you don't give in doesn't make sense for anybody. it is not a smart way to run the country. the white house is betting that most americans see it that way, too. and i think they're probably right. but a key part of it will play out in congress . and joining me now is congressman welch, thank you for joining us.

>> thank you.

>> now, you are introducing two resolutions on the debt limit. could you quickly walk me through what they are?

>> well, there is two, number one, the congress should have an up or down vote on a clean debt ceiling increase so that the american people can hold us accountable if we're not going to be willing to pay our bills, number one, number two --

>> and by cleaning, spending and other things?

>> it doesn't include negotiations this way or that way, if we owe the money we pay our bills. and it is not a tactic to work your will in a tough taxing and spending negotiation. but the second one i think is actually more important, the reinstatement of the gephardt rule, and repealed essentially by newt gingrich , our earlier guest and commentator. and what that says, when congress voted on a budget, that includes say spending in iraq or afghanistan or tax cuts that president bush advocated, that by operation of accepting that budget the debt ceiling would be increased or decreased to accommodate the budget that congress voted for. so it takes out the hypocrsy, so the idea of defaulting on the bill can't be part of the equation.

>> i spoke to minority leader nancy pelosi , she says in the white house she is amazed when president obama begins to speak about the debt limit. his whole demeanor changes, he becomes very hard line on it. are your colleagues standing firm on it? are they radicalized on the debt limit deal that the country can be held hostage? are they confident there needs to be a negotiation here?

>> no, i think there is zero tolerance in the caucus for using that as a tactic, and what happens is, we blew it frankly in august. we allowed a link to occur in the budget and debt limit. it led to the first downgrade in the triple a bond rating in the history of the country. and the cost, according to the treasury is going to be about $90 billion in additional interest payments over the next ten years. and by the way, here is the thing that is so dangerous. in your introduction, i agreed with your analysis. but the one thing that i think was left out is that the republican conference are actually true believers on this. they think that this is a tactic that will work for them. and they're divided into two groups in the republican conference. the folks who would vote no on raising the debt ceiling, and a larger group that would vote hell no. and the larger debt here, i think speaker boehner knows this ultimately can't prevail. it will do too much damage. because the power to default is the power to destroy. if we have a percent increase that costs the american taxpayers a trillion dollars over ten years, but he has a conference that thinks they have the president right where they want him. that is all this talk about the leverage equation changing. so our position from the outset has to be zero tolerance when it comes to a tactic that says it is a legitimate option for america to default.

>> well, congressman peter welch , we'll look anxiously to see if you can convince them they're wrong. thank you for joining us.

>>> coming up, the job reminders coming up. the fiscal cliff deal that might have been possible. it was still terrible. up next, what it should have looked like to tackle the economic problems.

>>> and in the spotlight tonight, they're here to help me put the 112th congress into the awful perspective it deserves, but amid all the awful dysfunction in washington , d.c., there is one politician performing, even over-performing. coming up, i'll announce the most productive politician in