JONATHAN CHAIT AUGUST 2, 2011
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If you haven't already read Kara Brandeisky's story about how the Clinton administration handled the debt ceiling in 1995, you should definitely do it. As she notes, the circumstances were different in 1995. Republicans were somewhat less fixated on the debt ceiling, and also somewhat less destructive and crazy. But they weren't that much less destructive and crazy:
“Nobody should assume we’re going to have a debt-limit extension,” John Boehner warned. “If the vote were held today, it would not pass.” Sound familiar? This was Boehner in November of 1995, when he was the House Republican Conference chairman and his party was refusing to raise the debt ceiling unless President Bill Clinton agreed to a package of sweeping spending cuts.
The biggest single difference is that the Clinton administration simply refused on principle to get jacked up on the debt ceiling:
Still, even though Clinton enjoyed political and economic advantages that Obama does not, his no-compromises strategy had some clear advantages. Unlike Obama, he refused to let the threat of default set the national agenda. Because he would not enter into negotiations over the debt ceiling, the issue barely roused the public consciousness. On November 9, 1995, a senior administration official told the Washington Post, “Our position is it does not matter what they put on this legislation, we are not going to accept anything but clean bills because we will not be blackmailed over default. Get it? No extortion. No blackmail. What you hear are their screams of complaint as they realize we are not, not, not budging on this.”
Kind of hard to imagine somebody from this administration talking like that.
It's worth noting that the implications of this capitulation go beyond the current deal, which is not that terrible. Republicans are emboldened that they have set a new precedent for using the debt ceiling to extract concessions (it "establishes a pattern for when the debt limit expires in 2013," exults Keith Hennessey.) This would have dire consequences, writes Robert Greenstein:
Anticipating the policy battles to come, we should not lose sight of an alarming development. Those who have engaged in hostage-taking — threatening the economy and the full faith and credit of the U.S. Treasury to get their way — will conclude that their strategy worked. They will feel emboldened to pursue it again every time that we have to raise the debt limit in the future.
They also will likely continue insisting, in future hostage-taking efforts, that for every dollar we raise the debt ceiling, we must cut spending by a dollar, with no revenue allowed. When one considers that even the harsh budget plan of House Budget Committee Chairman Paul Ryan would require policymakers to raise the debt limit by nearly $9 trillion over the coming decade, one begins to understand the extraordinary results such a policy path would produce over time.
The even more serious problem as I wrote in my most recent TRB column, is the degree to which the debt ceiling represents a new era of crisis in American political institutions. We have a rickety political system that gives the opposition party power without accountability, and lacks any clear channels for resolving competing claims to legitimacy. Obama's weakness merely encourages more acts of brinkmanship, every compromise making it harder for him to make a credible public stand.
It's easy to overestimate Clinton's resolve in the golden light of history. At the time, the Clinton administration was freaked out, desperate to move to the center and highly amenable to compromise. Still, Obama needs to recognize that capitulating to economic hostage-taking creates long-term dangers -- not just to his agenda but to the health of American democracy.
9 comments
It's very true that in 1995, "the Clinton administration was freaked out, desperate to move to the center and highly amenable to compromise" - which makes it even more pathetic that the Obama administration still can't reach Clintonesque levels of backbone and resolve (such as they ever were).
- whyamihere
August 2, 2011 at 3:41pm
"On November 9, 1995, a senior administration official told the Washington Post, . . . " "Kind of hard to imagine somebody from this administration talking like that." Isn't it possible that THE 1995 senior administration official is a member of THIS administration?
- sharib
August 2, 2011 at 4:14pm
TNR contributor Michael Lind has an essay in Salon in which he argues that the tea party insurrection is just the latest in a long line of insurrections by southern white dissidents. Indeed, he includes a graph reflecting that 63% of tea party caucus members are from the south, and that 100% are either from the south, from border states, or Orange County, California (which is southern is ideology). Lind says: "From the earliest years of the American republic, white Southern conservatives when they have lost elections and found themselves in the political minority have sought to extort concession from national majorities by paralyzing or threatening to destroy the United States." And this time, to add insult to their already injured oversized egos, they had to negotiate with a black man.
- rayward
August 2, 2011 at 4:41pm
There is one other important distinction between Obama and Clinton. Clinton was not handed a whopping plate of steaming manure by the previous administration. Bush had run up a huge deficit and then provided a compelling need for more federal borrowing by way of a major recession. By the time Obama sat down in the oval office, we were swimming in more debt than we could imagine. The debt ceiling under Obama is not the one under Clinton.
- Nusholtz
August 2, 2011 at 4:56pm
In years to come, historians will look back on Obama's performance as president and conclude, in the face of the greatest economic threat since the Great Depression and the greatest political threat since the Civil War, and following one of the worst presidents, that he, a black man despised by a third of the nation, was one of our great presidents, even though, as it appears likely today, he was a one-term president.
- rayward
August 2, 2011 at 5:01pm
The deficits and national debt are much, much larger now than they were then. The economy is in far, far worse shape now than then. European economies (indeed the entire Eurozone) are having major debt crises now, but they weren't then. Most importantly, the Republicans now are much crazier than they were back then.
- polcereal
August 2, 2011 at 5:04pm
That contrast is interesting. And yes they were just as crazy back then. They impeached him over a blow job for ****s sake and the nut element, which isn't new to Republicans, were calling him a murderer and a rapist. And of course, Clinton had his own debt ceiling moment by enabling a vicious attack on the poor and branding it Welfare Reform.
- IggyPop
August 2, 2011 at 6:09pm
So, solutions? We can't allow this to last; like other brass knuckles options, including the filibuster, they greatly favor the more ruthless party, who will without hesitation put them on and pound you in the balls with them any chance they get. You could never see Democrats using this to blackmail Republicans. And even if they tried, the Republicans would just laugh and say go ahead, we're giving you butkiss, not one dollar, not one penny. A future Democratic President, obviously not Obama, will have to fight. How? -- The legal options can be tried. -- The precedent, that won't be compromised, could be to pass no budget unless authority is included for any borrowing it entails.
- RHSerlin
August 2, 2011 at 7:13pm
I think that the starboard crowd in Congress these days is a whole lot crazier than the Gingrich crew was.
- liberalref
August 2, 2011 at 10:51pm