So on Tuesday, Goldman suggested there’s a silver lining to Hurricane Harvey.
Previously, the bank had pegged the odds of a government shutdown at roughly 50%. But thanks to one of the worst natural disasters in the country’s history, the odds might have fallen simply because no one will want to risk being the guy/gal that gets blamed for crippling the government’s capacity to provide aid in the aftermath of a horrific natural disaster.
“At this point, we peg the probability of a shutdown in early October at 35%, down from our prior view of 50% over the last couple of weeks [with] the main issue [being] Hurricane Harvey,” Goldman wrote, in a note out Tuesday evening. The bank continued: “Allowing a partial government shutdown when federal relief efforts are underway would pose greater political risks than under normal circumstances, raising the probability that lawmakers will find a way to resolve disagreements.”
They made a similar point about the debt ceiling. Basically, if Congress combines the emergency funds with the federal spending authority or the debt ceiling, no one is going to want to see their picture plastered all over the front page of every newspaper in the country with the headline “This Is The Dick That Voted Against Disaster Relief.”
Well, fast forward 48 hours and it looks like Rep. Mark Meadows (R-N.C.), chairman of the House Freedom Caucus, is going to try and avoid being “the dick” later by being a dick now. Here’s WaPo:
The leader of an influential group of House conservatives warned GOP leaders Thursday not to attach aid for victims of Hurricane Harvey to an increase in the federal debt limit, a stance that could constrain Speaker Paul D. Ryan (R-Wis.) as he tries to win support over the coming weeks for several controversial must-pass measures.
Rep. Mark Meadows (R-N.C.), chairman of the House Freedom Caucus, said attaching Harvey aid to a debt-ceiling increase would be a “terrible idea” that would be “conflating two very different issues.”
“The Harvey relief would pass on its own, and to use that as a vehicle to get people to vote for a debt ceiling is not appropriate,” he said in an interview. “That sends all the wrong message: ‘Let’s go ahead and increase the debt ceiling, and by the way, while we’re doing it let’s go ahead and spend another $15, $20 billion dollars?’ That’s not to undercut the importance of Harvey relief. We’re going to fund Harvey relief without a doubt, but I think it just sends the wrong message when you start attaching it to the debt ceiling.”
So basically, Meadows wants to make sure he gets to make a debt ceiling increase contingent on attaching his own agenda and by God no hurricane is going to stop him.
His defense: “Having some guardrails for fiscal responsibility is certainly important and to just ignore it would not be prudent.”
Duly noted, but if the U.S. ends up defaulting, those aren’t the only “guardrails” we’re going to need.