Two years ago, President Obama welcomed the debt ceiling as an opportunity to negotiate deficit reduction with congressional Republicans. This backfired-rather than work in good faith with the president, Republicans used this as an opportunity to hold the economy hostage to a list of narrow demands: for a balanced budget amendment, for regressive changes to entitlements, for large cuts to the social safety net.
The debt ceiling is again upon us, and Republicans have-again-promised to use it as a way to force concessions from the White House. But unlike last time, Obama does not see this as an opportunity for negotiations. Instead, he's issued an ultimatum: Either Republicans agree to a "clean" debt ceiling increase-which was the norm until two years ago-or the United States defaults on its debt.
By itself, this looks like another instance of Washington bickering, and so-to ensure that he has the public on his side-Obama has coupled this demand with an attempt to shift blame, which he made during a press conference this morning-the last of his first term. Lifting the debt ceiling, he explained, doesn't authorize more spending or create more debt. It simply allows the United States to fulfill the obligations it already has:
We are not a deadbeat nation. And so there's a very simple solution to this: Congress authorizes us to pay our bills.
[T]here are no magic tricks here. There are no loopholes. There are no, you know, easy outs. This is a matter of Congress authorizes spending. They order me to spend. They tell me, you need to fund our Defense Department at such- and-such a level, you need to send out Social Security checks, you need to make sure that you are paying to care for our veterans. They lay all this out for me, and – because they have the spending power. And so I am required by law to go ahead and pay these bills.
Later on, he compares not lifting the debt ceiling to a dine-and-dash: "You don't go out to dinner and then, you know, eat all you want and then leave without paying the check. And if you do, you're breaking the law. And Congress is-should think about it the same way that the American people do."
Just last month, when Washington was embroiled in a fight over the Bush tax cuts, Obama framed the debate as one where Republicans were holding up a solution agreed to by all other players. That is, if taxes were to have gone up on middle-class families, it would have been because Republicans refused to compromise.
He's doing something similar with the debt ceiling. He has described, in some detail, what will happen if Congress does not lift the limit on borrowing-seniors won't receive their benefits, contractors won't receive their pay, and global markets will be thrown into chaos. Moreover, he's outlined the contours of the political debate-Democrats and more moderate Republicans agree on what needs to be done, it's only a small faction of Tea Partiers who refuse to cooperate.
If Congress doesn't raise the debt ceiling, and we face severe economic turbulence, then Obama is well-positioned to point to Republicans and (rightfully) blame them for the situation. And given the extent to which the GOP saw its popularity crater following the first debt ceiling fight, this is a potent weapon.
Indeed, if there's any reason to think the GOP will ultimately agree to a clean debt-ceiling increase, it's for that reason. Remember, midterm elections are less than two years away, and Republicans are angling to take the Senate. Given the large number of seats that Democrats will defend in 2014, their odds are good. But if the public sours on them, that goes out the window. Agreeing to raise the debt ceiling is necessary to the GOP's chances next year, which is why-when push comes to shove-the leadership will have every incentive to concede.
