President Barack Obama, meet Congressman Michael Burgess.
The president says he absolutely will not let Republicans threaten a national debt ceiling crisis as a way to extract deeper federal spending cuts.
“It’s the most preposterous thing I’ve ever heard,” the Texas Republican says. “He’s going to have to negotiate.”
Both sides may be bluffing, of course. They may reach an agreement before the debt-limit matter becomes a crisis in March, or possibly late February.
But the tough talk suggests this year’s political fight could be even nastier and more nerve-grating than the recent “fiscal cliff” showdown, or the July 2011 brinkmanship that triggered the first-ever ratings downgrade of the nation’s credit-worthiness.
Asked about the White House’s apparent assumption that Republicans will back down, Burgess said: “I’m not going to foreclose on anything, but that’s just not going to happen.”
He is hardly alone.
On NBC’s “Meet the Press” Sunday, Senate Minority Leader Mitch McConnell, R-Ky., repeatedly declined to say he would rule out a government shutdown, prompted by a debt-ceiling impasse, in the effort to force Obama to swallow large spending cuts. “It’s a shame that we have to use whatever leverage we have in Congress” to force the White House to negotiate, he said.
In fact, congressional Republicans of all stripes say Obama has no choice but to accept spending cuts they want in exchange for a hike in the debt ceiling, which will reach its limit in about two months. Said McConnell: “We simply cannot increase the nation’s borrowing limit without committing to long-overdue reforms to spending programs that are the very cause of our debt.”
Obama says he’s willing to discuss spending cuts in some programs. But that discussion, he says, must not be tied to GOP threats to keep the government from borrowing the money it needs to keep paying its bills, including interest on foreign-held debt.
“I will not have another debate with this Congress over whether or not they should pay the bills that they have already racked up through the laws that they passed,” the president said last week. “If Congress refuses to give the United States government the ability to pay these bills on time, the consequences for the entire global economy would be catastrophic.”
It once was fairly routine for Congress to raise the government’s borrowing limit every year or two, to keep paying bills in times of deficit spending. But the exercise became fiercely partisan in 2011.
Republicans threatened to block a debt ceiling hike unless Obama and congressional Democrats agreed to large but mostly unspecified spending cuts. Obama negotiated furiously. In hopes of a far-reaching “grand bargain,” he offered to raise premiums, co-payments and the eligibility age for Medicare, and to slow the cost-of-living increases for Social Security benefits.
House Republicans demanded more. Foreshadowing the recent “fiscal cliff” quarrels, they embarrassed Speaker John Boehner, R-Ohio, by forcing him to rewrite debt-limit legislation to include a hopeless bid to amend the Constitution to require balanced budgets.
In the end, Republicans settled for about $1 trillion in spending cuts over 10 years. The government barely avoided having to stop paying some bills. Financial markets were rattled, however, and Standard & Poor’s lowered the nation’s credit-worthiness rating.
Obama says he will take a dramatically different approach this time. He will discuss possible spending cuts as part of a broad deficit-reduction package. But he will end the conversation, he says, if Republicans threaten to withhold cooperation on the debt limit unless he meets their cost-cutting demands.
Republican lawmakers spoke dismissively of Obama’s challenge in interviews last week. Several laughed out loud at the president’s remarks.
“He’s out of his mind,” said Rep. Trent Franks, R-Ariz. If Obama thinks Republicans will back off their demands, Franks said, he is “operating in his usual cloud of delusion.”
“It’s a major mistake for the president to be intractable,” said Rep. Michele Bachmann, R-Minn. To think Republicans are bluffing, she said, “is a mighty mistake on his part.”
Bachmann and Franks are among the GOP’s most conservative members. But even many moderate Republicans hold similar views.
If the president thinks Republicans won’t demand spending cuts as part of a debt-ceiling deal, “then he hasn’t talked to a lot of members in our conference,” said Rep. Jim Gerlach, R-Pa. Asked if it would be dangerous for the United States to default on its financial obligations, Gerlach replied: “We’re in a dangerous situation now. We’re $16 trillion in debt and climbing.”
Until the fiscal cliff was resolved, Obama held political leverage on the issue of tax hikes. Now, Republicans say, with Obama vehement about raising the debt limit, the negotiating leverage for spending cuts is on their side.
“The debt ceiling is our next best opportunity to start controlling spending,” said Rep. Steve Scalise, R-La., chairman of the conservative Republican Study Committee.
To fully carry out a threat, of course, a bargainer must be willing to take the most dire action — to “shoot the hostage,” in the words of Chris Chocola, president of the rigorously conservative Club for Growth. “If you’re not willing to use your leverage,” he said, “you don’t have any.”
The only thing less responsible than refusing to raise the debt ceiling,” Chocola said, “is continuing to put us more in debt.”
Obama’s allies say Wall Street and other business sectors, even if they support major spending cuts, will lean heavily on Republicans to raise the debt ceiling.
White House spokesman Josh Earnest said Obama “stands ready to compromise with Republicans on a balanced approach to reducing our deficit that includes cutting spending, reforming entitlements and asking wealthy Americans and American corporations to pay a little more. But that agreement will not be the ransom paid for the full faith and credit of the United States of America.”
Rep. John Fleming, R-La., said Republicans will be tough but responsible.
“We don’t want to unnecessarily antagonize the American people,” Fleming said. “But on the other hand, I can tell you my constituents, overwhelmingly, would much rather see us not raise the debt ceiling than to not deal with the spending that needs to be dealt with.”
A recent CBS News poll, which summarized the arguments for and against raising the debt limit, found 25 percent of Americans in favor of lifting the ceiling. Sixty-eight percent opposed.
White House officials say public opinion will shift as people learn more about the issue.
Chocola, Scalise and others say the nation need not default on its loans even if the debt-ceiling deadline passes unresolved. The administration can set priorities, they say, to pay the most important obligations first.
“It may be necessary to partially shut down the government in order to secure the long-term fiscal well-being of our country,” Sen. John Cornyn, R-Texas, wrote in a Houston Chronicle opinion article on the debt ceiling issue.
Such remarks, Democrats say, are the fantasies of “default deniers.”
Copyright 2012 The Associated Press