Will Obama cave on the debt ceiling?

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last updated 8 January 2015

At his press conference on Monday, President Obama insisted repeatedly that he wouldn't negotiate with congressional Republicans over raising the debt ceiling, demanding that Congress allow him to pay the bills it has racked up. The House GOP "will not collect a ransom in exchange for not crashing the American economy," he said. For many liberals, this looks like a more politically savvy use of the bully pulpit than Obama has demonstrated previously, the idea being "that he can simply continue to say, 'Do your job,' to Congress when and if they come to him seeking concessions in exchange for it, and refuse to have any further conversation," says Molly Ball at The Atlantic. But "that's a little difficult to believe," given that "Obama has often drawn supposed lines in the sand before only to negotiate them away."

That's the heart of Obama's "credibility problem" in these hostage negotiations, says Matthew Yglesias at Slate. The most recent example of the White House caving is the fiscal-cliff compromise. "I think it was a good deal," but "it wasn't the deal that Obama said he would agree to." The White House insisted on a $250,000 cutoff point for re-upping the Bush tax cuts and on taking the debt ceiling off the table, "but when push came to shove, they decided neither of those things were red lines." So watching Obama say that he's unwilling to pay ransom now to free the debt limit, "I find it impossible not to confront the point that as of now nobody seems to believe him."

Fair enough, says Jonathan Chait at New York. "In these games of chicken, [Obama] always seems ready to swerve at the last moment," but this time might be different. The president seems to understand that allowing the debt ceiling to routinely be held hostage to extract policy concessions — something that "never happened before Obama allowed it in 2011" — would lead to "an endless series of Russian roulette games that will ultimately lead to the gun going off." So he's "leaving himself no room to backslide," unilaterally waving off all his outs — using the 14th Amendment, minting a platinum coin. Now, if Obama "pays the ransom, he'll leave himself humiliated and exposed in a way he never has."

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Taking the trillion-dollar coin and 14th Amendment power play off the table "is itself reckless, insofar as it increases the likelihood that GOP hard-liners will plunge the economy back into recession," says Timothy Noah at The New Republic. Obama seems determined to be the reasonable party here, but as 500 years of political science have demonstrated, "when governing, it is generally preferable to demonstrate that you're willing to be an even bigger son-of-a-bitch than your opponents are." It's all well and good for Obama to piously say he absolutely won't negotiate over America's creditworthiness, but "sainthood won't raise the debt limit."

The more Obama says this, the less believable it sounds. We know that Obama never means it when he says he's done negotiating. If he didn't mean it when all the leverage was on his side during the fiscal-cliff negotiations, then how can he possibly mean it when it isn't? At this point the only leverage Obama has is to keep Republicans guessing about whether he'll do something unreasonable to maintain this country's creditworthiness should he be faced with no other choice. The platinum-coin gimmick is not, I'll grant you, a great option, but it is far too soon for Obama to decide he doesn't need it. Indeed, it smacks of narcissism. Obama's choice between maintaining a spotless reputation for integrity and maintaining a functioning economy ought to be a no-brainer. Alas, it is not. Mister President, this is no time to go all Norwegian on us. [New Republic]

Here's Obama's problem, says Jon Healey at The Los Angeles Times: Despite his "succinct and inarguable" point about the insanity of Congress racking up bills then refusing to let him pay them, "Congress can do that," and there are plenty of House Republicans who are not only willing to say no to raising the debt ceiling but "simply don't buy the argument that it would be a bad thing." That doesn't mean we'll default on our obligations, necessarily.

As much as Obama insists on not negotiating over the debt ceiling, it seems certain that he'll have to unless he persuades the GOP to take a different hostage. One good candidate is the spending bill to keep the government operating after March, when its funding runs out. Failing to pass that bill wouldn't threaten debt payments or federal entitlements; it would, however, force "nonessential" federal offices and services to shut down. Granted, such a display of dysfunction might persuade credit ratings agencies to downgrade U.S. debt anyway. But at least Congress would be exercising its power of the purse in a rational way, rather than running up debt and then refusing to pay it. [Los Angeles Times]

Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.

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