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Politico: Default Deniers: The New Skeptics

May 17, 2011

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Politico's Carrie Budoff Brown looks at the debate brewing in Washington between leading Republicans and the Obama administration over raising the debt limit.

They are the newest breed of government skeptics, the swelling ranks of Republicans who don't believe the Obama administration when it says a failure to raise the debt limit will prove catastrophic.

And they stand ready to make negotiations over raising the cap on debt as grueling as possible, leaving Treasury officials and Wall Street more nervous than ever that the country could suffer an unprecedented default, with consequences no one can predict.

The suspicion, which once flourished only on the conservative outskirts of economic circles, has seeped into the mainstream in recent weeks, gaining broader acceptance among establishment Republicans even as the administration issues increasingly dire warnings.

House Speaker John Boehner (R-Ohio) validated the default deniers Sunday, saying, “I understand the doubts.” Jim Nussle, a budget director under former President George W. Bush, argued last week that “no one's going to default” if Congress misses the Aug. 2 deadline. And Alabama Sen. Jeff Sessions, the top Republican on the Senate Budget Committee, accused the White House of scare tactics similar to those used by the previous administration to win quick approval of the 2008 bank bailout after the markets crashed.

 

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