Tuesday, January 04, 2011

Debt Ceiling Strategy


It may have started a few months ago, but on November 4 the Atlantic's Andrew Sullivan blogged

I think the key to Obama's long-term success is being Obama: the calm, restrained, sober, reasonable adult in the room, always focused on actual problems and their feasible solution.

Later that month, Washington Post columnist Ruth Marcus wrote

After all, if children had the vote, their first instinct would not be to elect their parents or, for that matter, any grown-up - even if they know, deep down, that they need adult supervision. It will require intensive - let's be blunt, remedial - voter education about the necessary trade-offs. And this must, finally, be followed by presidential willingness to take the risk of laying out in detail what he believes those trade-offs should be, because the deficit commission isn't going to do it for him.

This past Sunday, John Heileman said on The Chris Matthews Show (transcript here)

....this comes back to President Obama because the Republicans are not serious about deficit reduction as Andrea said. Democrats are not enthusiastic about it for all the reasons that we know in terms of their weddedness to entitlement programs. The President is the only really serious adult in this conversation.

The idea of Barack Obama as singularly mature, the only adult in the room, may have played a role in the charge of Office of Economic Advisors chairman Austan Goolsbee on Sunday:

This is not a game. You know, the debt ceiling is not something to toy with. That`s the -- if we hit the debt ceiling, that`s the essentially defaulting on our obligations, which is totally unprecedented in American history. The impact on the economy would be catastrophic.

I don`t see why anybody is talking about playing chicken with the debt ceiling. If we get to the point where you`ve damaged the full faith and credit of the United States, that would -- that would be the first default in history caused purely by insanity.


Yesterday on The Rachel Maddow Show (transcript here), guest host Chris Hayes maintained that the GOP is bluffing and played a tape of House Republican leader John Boehner, in mid- November prior to the tax debate, conceding

If the only option I have is to vote for some of those tax reductions, I`ll vote for them. If the only option I have is to vote for those at $250,000 and below, of course, I`m going to do that.

Boehner at the time added "We have to have a discussion with our newest members that involves more of a plan…The United States must pay its bills."

Former Bush 43 speechwriter David Frum told Hayes that Goolsbee was sowing fear and contended that he instead should have said

We look forward to working with the new majority of the House of Representatives to put us on the long-term path to fiscal stability. The United States will meet its obligations.

That would have been, as the father of Frum's former boss would have put it, "prudent." But it wouldn't have drawn attention to President Obama's standing as The Only Adult In The Room. Goolsbee was dramatizing the peril of refusing to raise the debt ceiling, as Frum noted on his blog, to "depict Republicans as fiscal madmen." But he aim was not, as Frum maintained, because the Administration may have "political plans that would profit from causing people to worry."

If the White House wants to depict Republicans as "fiscal madmen" (which, apparently, Boehner isn't and a few are), it is probably not aimed at attaining some policy objective which would offend Frum or other conservative Republicans. Goolsbee struck a note of panic and thereby showed the GOP his hand, which would suggest the possibility of doing almost anything to prevent the fiscal catastrophe he believes would ensue with failure to raise the debt ceiling. It thus softens up the President's own party, giving liberals an incentive to accept whatever deal Obama negotiates with the GOP. That could be a cut in spending, in Social Security or elsewhere, that would not jeopardize health care reform, Obama's baby and signature accomplishment. but one which would depict the President as serious about addressing the budget deficit.

Machiavellian? Surely. But this is a Democratic Administration which opposed tax breaks for the wealthy; heard John Boehner admit in October that if tax cuts were extended only for middle incomes, he'd vote for it; then celebrated a "compromise" that forced the GOP to accept tax cuts for millionaires and billionaires. Is it unreasonable to suggest that the Administration is inflaming concerns both to demonstrate that the President is the one adult seriously addressing a grave problem and to achieve a center-right economic objective?



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