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.
