Fiscal Cliff

Why the Administration Might Be Backing Down (a Little) on the Debt Limit


Over at Slate, Matt Yglesias complains about the Obama administration's newfound willingness to use the debt ceiling as a bargaining chip in the fiscal cliff negotiations. The administration is now asking for a two year extension rather than an absolute end to all fights with Congress over lifting the debt limit: 

Just last week I was trying to convince people that the administration had a new spirit of resolve on the debt ceiling question. Over the past year, I've repeatedly heard from administration officials both senior and junior that their on-the-record posture of no renewed negotiations on the debt ceiling is not a bluff. They've shown charts and graphs of how damaging they think the last standoff was to the economy, and made it a centerpiece of their story about why the recovery seemed to stall out for a while in 2011. Routinized hostage-taking was, they said, genuinely dangerous to the American economy.

But then it's emerged this week that they didn't really mean it. The debt ceiling is just another issue in the mix along with tax rates and benefit formulae and tax reform commissions and all the rest. 

Part of what this reveals is that the administration has other priorities. It could stand absolutely firm on the debt ceiling, and give up more on, say, Medicare or tax hikes. Yes, the administration has already sounded its willingness to give some ground on those issues: offering to only lift tax rates on earners making more than $400,000 annually, and allowing for some unspecified future cuts in Medicare. But it could give up more. It's not, though, and it's not hard to imagine at least one reason why. There are a lot of influential Democratic coalitions organized around fighting most cuts to Medicare and pushing for higher taxes on the wealthy. There are fare fewer such organizations devoted to fighting for President Obama's right to unilaterally raise the federal debt limit without permission from Congress. There are of course some folks, mostly wonky types, who care about the issue, but for the most part it's not a major public priority. Indeed, in a negotiation that much of the public broadly understands to be about controlling debt and deficits, it's sort of difficult to explain why one of your must-haves ia an unlimited right to lift the limit on debt. 


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    1. Don’t talk about Warty that way.

      1. I can’t believe you’re defending him. I told you you’d change when you started a relationship with him.

        1. I’ve changed. People change. I’m not the same Episiarch who informed on those blind orphans. I’m not the same Episiarch who revealed the hiding place of those Guatemalans…such as yourself. And I’m not the same Episiarch who took a crap in the Fleishmann’s holly bushes…last night.

          1. You disgust me. I can’t believe I once wanted you as my husband.

            1. “You don’t wanna beat me or screw me?!? What kind of marriage is this?!? Bring a book.”

              1. “If you can’t make a pretend marriage work with an assigned spouse who doesn’t love you and who you hardly know, how can you expect to make a real one work?”

                1. “What’s it like being a whore? Oh wait, I know that one. What’s it like being a homewrecker?”

                  1. C’mon, you know that one too.

                    1. Yeah, I do.

  1. Also, progressives are howling about Obama’s seeming concession to use chained CPI. This amounts to lower future Social Security benefits and flattens taxes.

    1. I know – “CPI” is actually trending on Twitter right now and watching the river of tears flow in real time is a-mah-zing.

    2. It’s as if he forgot that old people vote, and don’t want the gravy train to stop.

  2. I’ll just mention that the constitution doesn’t place any authority or responsibility for spending, taxation, or debt with the executive. The congress should do their damned job and pass a budget that doesn’t exceed revenues, and tell the president what they decide.


    1. Come on man, nobody reads that old rag anymore.

    2. they should trade him the debt limit for his veto power.

  3. There’s always the $ 1 Trillion coins.

    1. Yeah, nothing promotes economic growth like extreme currency instability. Vaporizing a trillion dollars off of the Fed’s balance sheet is just what we need.

      1. Other than a couple of bloggers no one is proposing this.…..lion-coins

        Apparently, the source was not the Beckerhead though.

        1. According to this theory, Obama could move the coins through the Federal Reserve into Treasury’s accounts.

          This new money wouldn’t cause inflation, because it would merely replace the money we otherwise would have conjured up by printing bonds.

          What a moron. It still conjures up a trillion dollars that will be injected into the economy by the federal government when the feds, you know, spend it. It merely uses a platinum coin as the symbol of that trillion dollars, rather than a bookkeeping entry.

    2. Is that another Glenn Beck nutty CT?

      I will Google.

      1. Shreek…why don’t you just ask Glenn out…he might say yes and then you can both deal with your obsession in a healthy and constructive fashion.

      2. I have to say Shreek, I am truly fascinated by your complete and utter hatred of Glenn Beck. Did he shoot a load in your eye one time while you were sucking his balls? Were you fucking him in the ass when he decided he was finished before you were? Are you just pissed off that you have nobody to get drunk and high with anymore? What’s the deal?

        1. Beck was the primary source of misinformation to TP/conservatives for a long time period – say 2007-2011.

          Since even Fox News became embarrassed and dropped him his profile has fallen.

          It is comical how he and Limpy connect to the conservative base yet are such utter whackjobs themselves.

          Beck attacks Soros as a commie while Soros was funding free market revolutions (Rose, Velvet, Orange) and fighting socialism himself.

          I could find 200 examples where these two barkers get the facts 100% wrong.

          1. So in otherwords he fucked you and then didn’t return your phone calls the next day.

            You are dumbest most misinformed human being on the face of the earth Shreek. And isn’t commenting about Beck it against the restraining order Beck got against you?

          2. For someone whom you constantly describe as a nutjob, you sure spend an insane amount of effort on hating him. Has involuntary commitment been legalized yet? I think you might be sick and need some “treatment” to guarantee Mr Beck’s safety.

            1. I don’t think I’ve ever seen anyone on here even makes a positive Beck reference – well, except for Shreeik. I’m sure he’s searching H&R right now for conclusive evidence saying otherwise.

              I’ve never watched his show. I don’t even have cable so I don’t watch Fox either.

              1. I caught bits of his show here and there and after about 30 seconds total I could tell he was a complete tool. After that, I just stopped looking for his opinions on stuff. Apparently Shreek has real problems with letting go.

          3. Orange

            Yes, and he FAIL’ed in UKR, Shriek. Tymoshenko is still “languishing” in prison. Though, when she gets out, she may be able to run for President. Crooked as a dog’s hind leg, she is.

            Negotiated with Putin a really crappy deal with Gazprom, too. We’re still paying for that blunder and Tymoshenko should never be mistaken for some Free Market radical. Why hasn’t Georgie sprung her from jail?

            You really should read up on that. Just because your precious Soros allegedly funded Yushhenko, doesn’t mean that he was bereft of nefarious motive. Yushhenko got his ass handed to him by Ja-Putin’s-Bitch in 2010. Where was Georgie then?

            1. Where was Soros in the fight against Obamacare?

              Oh, yes – funding the other side.

  4. Over at Slate, Matt Yglesias complains about the Obama administration-


    1. They’re gonna be tougher on him now that he’s won reelection.

      1. He’s accountable now! Right?

        1. No, don’t be stupid. It’s just criticism, not a call to action or anything.

  5. Routinized hostage-taking was, they said, genuinely dangerous to the American economy.

    Like what is going on right now? It takes two parties to tango. And it’s the uncertainty that kills forward momentum as much as anything.

    1. Of course we had this hostage taking in 2012. But somehow we were told the economy was booming in 2012. Right on its way to recovery. Remember? All that BEFORE the election? How could this be?

    2. And it’s the uncertainty that kills forward momentum as much as anything.

      The Soviet Union had certainty. They had 5-year plans.

      1. You have to have forward momentum before you can kill it.

  6. since the Administration isn’t going to do anything remotely intelligent about the economy (or probably anything else), let me ask about the Hi-Point HP9C.

    1. Specifically, is it a piece of crap?

    2. According to Goldman the economy will boom after the budget deal.

      Home building confidence at a 6 yr high.

      Market up again.

      Bank stocks up again.

      Earnings guided higher – gold down (today).

      1. And Goldman would never talk its book. Nosirreebob, never that.

        Protip: whenever a financial pro says something, assume he is saying it in order to make the market twitch in a direction favorable to his/her/its current trades, probably in order to get a little better exit price.

      2. This is all buoyed by fracking. And unemployment is going to be over 8 % for years to come.

  7. What debt limit?

  8. DEMS: “We should borrow ELEVENTY TRILLION dollars and tax the rich at 40%”

    REPUBLICANS: “WE should borrow only 10 TRILION dollars and tax the rich at 38%”

    god help us all

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