Obama, GOP negotiate to avert a default crisis

What happened

President Obama called in congressional lawmakers this week for a series of emergency meetings to resolve a high-stakes game of political chicken, as financial markets began to slide at the prospect of a historic debt default. Republican efforts to compel Obama to negotiate a delay in the Affordable Care Act kept the federal government shut down for a second week, and Treasury Secretary Jack Lew warned that the U.S. would reach its borrowing limit by Oct. 17. If Congress does not raise the $16.7 trillion debt ceiling before then, the country will default on its bills, which economists say would cause chaos greater than the one that followed Lehman Brothers’ collapse in 2008. “We’d have a recession and a financial crisis,” said Michael Feroli, chief U.S. economist for JPMorgan Chase.

With Republican leaders feeling increased pressure from polls and business groups, Obama invited House and Senate Republicans and Democrats to the White House to discuss an end to the impasse. He reiterated that delaying the ACA was off the table, and said negotiations on budget and tax issues couldn’t proceed if the GOP continued to threaten a debt-ceiling default. “We can’t make extortion routine as part of our democracy,” Obama said. House Speaker John Boehner vowed that Republicans would not agree to “an unconditional surrender,” and would insist on concessions from the president. But he and other House leaders, including Reps. Eric Cantor and Paul Ryan, signaled the party might push for a Grand Bargain of tax reform, spending cuts, and entitlement reform instead of a delay in the president’s health-care law. “We need to find common ground,” said Ryan.

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What the editorials said

The White House will stop at nothing to blame the shutdown on Republicans, said WashingtonExaminer.com. While Obama refused to negotiate, his administration blocked GOP efforts to fund a variety of essential services and deliberately tried to “maximize the pain” of the shutdown, even cutting off cancer treatments to children. “Somebody, starting in the Oval Office, should be ashamed.” Still, it’s time to give up on delaying Obamacare, said The Wall Street Journal. GOP negotiators should “pivot” to achievable conservative policy goals, such as a cut in the corporate tax rate and an increase in the Social Security retirement age.

First, the GOP must agree to raise the debt ceiling, said The Washington Post. Some ultraright conservatives are pretending that the government could shuffle some money around and still “prioritize” paying its debts, but this notion is delusional. Only the “unquestioned status of U.S. repayment” lies between us and a global economic meltdown.

What the columnists said

Republicans are in a stronger position than their critics think, said Fred Barnes in The Weekly Standard. Obama’s “unpresidential passivity” and refusal to negotiate over his unpopular health-care law mean he’s sharing in the political damage over the impasse. “Can you think of any other president who neglected his duty in this fashion?” Boehner has handled a tough situation very strategically, and may come away with real concessions.

But only if Obama doesn’t overplay his hand, said Ezra Klein in WashingtonPost.com. GOP leaders, including Ted Cruz, are clearly ready to “back down” from their demands to delay Obamacare. But by openly blaming Republicans—and Boehner by name—for the shutdown and debt-ceiling crisis, Obama is making it “harder for the Republican Party to retreat.” If he now presses for a total victory—a deal that Republicans “can’t tell themselves was a win”—promising negotiations may collapse.

“So how does the standoff end?” said Doyle McManus in the Los Angeles Times. Most insiders think Obama and Boehner will negotiate a face-saving deal to temporarily fund the government and raise the debt ceiling, in exchange for a commitment to forge a Grand Bargain by a certain date. Both parties will claim victory, the Tea Party will be furious, and the underlying problems at the heart of the crisis will remain unresolved. As one Republican strategist predicted, “We’ll kick the can down the road again.”