BUDGET POKER AUGUST 28, 2013
To review: I proposed that Obama make raising the debt ceiling a pre-condition to negotiating over the budget, so that John Boehner and the House GOP can’t use the debt ceiling as a way to shake down the White House for budget concessions. Boehner’s strategy is to mash these issues together for precisely that purpose; my advice to Obama is to keep them as distinct as possible. If this ends up being a fight over the budget without the debt ceiling involved, then Obama will win going away, because failure to reach agreement would bring a government shutdown, and everyone agrees that a shutdown would annihilate the GOP politically. (Even Boehner.)
Brian plays this scenario out and sees Obama backing himself into a corner. If Obama insists that Republicans attach a debt-limit increase to a bill that funds the government past the end of the fiscal year on September 30th (aka a “continuing resolution” or “CR”), Boehner will simply ignore him and pass a clean CR through the House (i.e., a bill with no debt-ceiling increase attached). At this point, Obama will have to either cave and sign Boehner’s bill or risk taking the blame for the government shutdown that will ensue, marking the first time in pretty much … ever that a Democratic president has been on the losing end of a potential shutdown fight. (Brian assumes the Senate would be hard-pressed to come up with an alternative CR that’s more favorable to Obama under this scenario, and I agree.)
A couple thoughts in response. First, I’m not at all convinced that Boehner can pass a clean CR with only Republican votes in the House. There’s a faction in his caucus (hard to say how big, but certainly vocal) that wants him to extract all sorts of “concessions” in return for keeping the government open (namely defunding Obamacare, but other stuff too). Sneaking a clean CR past these people will be no easy task. On the other hand, I certainly wouldn’t bet my entire strategy on Boehner’s inability to pass a clean CR, so Brian’s right to raise it as a possibility that must be accommodated.
But here’s the thing: With a few slight tweaks, Obama can easily avoid the trap Brian lays out. The weak link for Obama in the chain of events Brian lays out is insisting that Boehner attach a debt-ceiling increase to the CR—this is what ends up stalemating him. In fact, there’s no need for Obama to do that. He should just announce that Congress must raise the debt ceiling as a precondition to any negotiation over the budget. If Boehner wants to send him a clean CR temporarily funding the government for another two months at the sequester level, that’s fine. Obama can happily sign it—there’s no negotiation involved since it just temporarily extends the status quo. But then Obama should go right back to insisting that the GOP must raise the debt ceiling before he’ll negotiate on the budget.
At that point, the budget showdown will be off the table for a little while, and the next fiscal milestone will be the debt ceiling, which Treasury says must be raised by mid-October in order for us to avoid a default. Boehner, as is his wont, will almost certainly try again to link the debt-ceiling discussion to the budget discussion, so that he can tell his caucus he got concessions from Obama in return for raising the ceiling. (Boehner at a recent fundraiser in Idaho: "I've made it clear that we’re not going to increase the debt limit without cuts and reforms that are greater than the increase in the debt limit.”) Obama should just reiterate his demand: Raise the debt ceiling first, then we’ll talk budget. It seems hard to believe we wouldn’t get a debt ceiling increase. The House GOP leadership simply isn’t going to bring us to the brink of default again, as it did in 2011, completely annihilating their approval ratings. (You may disagree, but this isn’t something the White House and I disagree on…)
Now, you could argue that this is where things are headed anyway under the strategy the White House is already pursuing. Absent any budget deal, which seems unlikely, Boehner will probably pass a status-quo-y CR (though he may need Nancy Pelosi’s help to do it), which the president will sign. Then the White House will likely (hopefully!) refuse to negotiate over the debt ceiling, as it has long insisted, forcing Boehner to find a way to raise it. The problem with that trajectory—in which you mostly play your cards right, but don’t explicitly make raising the debt ceiling a precondition for negotiation on the budget—is that it allows Boehner to play a variety of games. For example, he can pass a short-term debt-ceiling extension that roughly coincides with the life of the continuing resolution, thereby mashing the two fights together again. Obama can say he’s not negotiating over the debt ceiling all he wants. But if the debt-ceiling and budget talks are proceeding along roughly the same timetable, Boehner can say they’re linked. The only way to unambiguously remove the debt-ceiling threat from the budget fight (where you would otherwise hold most of the cards), is to announce the pre-condition strategy and stick with it.
But, you might ask, what’s so bad about lumping everything together in the end? Isn’t that how deals get done? You allow Boehner to tell his people he won some concessions (spending cuts) in return for doing something they didn’t want to do (raise the debt ceiling). Meanwhile, Obama can claim he didn’t negotiate over the debt ceiling, only over a budget deal to replace the sequester. Everyone gets their own interpretation, which creates space for a deal. It wouldn’t surprise me if this is where the White House is eventually headed.
Unfortunately, while it’s how negotiations should proceed among rational actors—I give you this but I call it that; we all walk away happy—House Republicans are, you know, lunatics. As long as the debt ceiling is alive and they’re allowed to believe it’s in play, they’ll believe they have leverage (egged on by Boehner, a la his Idaho fundraiser speech) and will demand far deeper cuts than Obama can possibly give them. Likewise, any deal that allows Republicans to say “we won these concessions in exchange for raising the debt ceiling” will only encourage further debt-ceiling extortion in the future, a terrible practice to encourage (at least any more than Obama already has, which is quite a bit).
When you’re dealing with loons, you have to throw out the book on negotiating and suppress your conciliatory impulses (ahem, Mr. President). The lunatics will somehow manage to rationalize as victory anything short of total defeat. And so total defeat is what you have to give them.
Noam Scheiber is a senior editor at The New Republic. Follow @noamscheiber