Pelosi: Republicans May Need To See Markets Plunge To Support Debt Ceiling Deal
WASHINGTON -- Republicans may not support raising the debt ceiling until the stock market takes a major plunge, House Minority Leader Nancy Pelosi (D-Calif.) said on Thursday, drawing comparisons between the debt negotiations and the 2008 vote on the Troubled Asset Relief Program.
"The Republicans may need to see the markets drop 400 points," she said at a press conference Thursday.
Pelosi said the debt limit debate was similar to the debate over TARP in 2008, the "bailout" bill that approved $700 billion in federal payouts to banks. Although neither party wanted to support the bill, Democrats in the House came forward to pass it, Pelosi said, because they wanted to restore confidence to the markets.
The TARP bill initially failed in the House, with just 145 Democrats and 65 Republicans lining up to support it, short of the 218 total votes needed for passage. The vote caused the Dow Jones Industrial Average to plummet 777 points.
"Unfortunately [Republicans] had to let the TARP bill die and markets tumble before they would supply even a few more votes," she told reporters after the press conference.
As the clock ticks down to Aug. 2, the deadline set by the Treasury for raising the debt limit, ratings agencies and investors are beginning to hint at nervousness that the government will not come to an agreement to prevent default.
Moody's Investor Service announced Wednesday it is reviewing the U.S. bond rating for a possible downgrade, due to concern that the debt limit will not be increased in time.
"I think [the markets] should encourage Republicans to raise the debt ceiling. That's what's going to save them from this," Pelosi told reporters.
Lawmakers are meeting at the White House each day to work out a deal to raise the debt ceiling in exchange for major spending cuts, but so far have not come to an agreement on how much money should be cut, or which departments would suffer. Pelosi said her patience has been tested by negotiations.
"The president has more patience than Job," she said. "I don't compete with him in that regard."
President Barack Obama floated the idea of lawmakers meeting at Camp David, the White House retreat in Maryland, to negotiate over the coming weekend. But House Speaker John Boehner (R-Ohio) quickly rejected that offer.
"The Speaker has told the White House he sees no need to go to Camp David this weekend," Boehner spokesman Michael Steel said in an email statement.
Pelosi, though, said she would be willing to go to Camp David if doing so is necessary to find a deal on the debt limit, but she argued more work should be done in Washington first.
"It's time to freeze the design. What is that we can agree upon? Let's get on with writing the bill," she said. "But let's not say, 'Well, we don't have to make any decisions today or Thursday or Friday because we're going to have s'mores at Camp David over the weekend.'"
She said staffs for the House and Senate leadership are already working around the clock to prepare for the meetings with the White House, which have averaged between an hour and a half and two hours each day.
"A two-hour meeting is a 10-hour involvement, and that's what we are doing [here in Washington]," she said. "If location is the issue, I think we're all pretty accessible in these meetings. What I don't want to see is any delaying tactics that prolong the writing of legislation."