Monday, January 14, 2013

Julianna Goldman questioned Obama's debt ceiling cred to his face. His response...

I noted in a prior post that as the debt ceiling approaches, I'm getting foreboding flashbacks from this familiar process: 1) Obama articulates his position forcefully and with precision; 2) progressives note with glee that he's boxing Republicans in; 3) stalemate sets in as a deadline looms; 4) a flurry of reported Obama concessions augurs a deal; 5) the deal is announced, headlined with those concessions if backloaded with some Obama priorities.

Today's press conference may augur a similar pattern.  At greater length than ever, and with top-of-his-game precision, Obama laid out his case for a clean debt ceiling hike and "balanced" deficit reduction.  When asked why we should believe that this time he would not blink at the brink, however, he was less convincing.

Two lengthy exchanges tell the tale. In the first, challenged on the consistency of his debt ceiling position and the irresponsibility he alleged in Republican conduct, he was precise and masterful, catching Republicans in a rhetorical pincer: Threatening default is extremist and unprecedented. And doing deficit reduction by spending cuts alone is extremist and unprecedented. One threatens to blow up the economy and destroy the nation's privileged position as the world's default currency. The other threatens to sell the nation's public benefits and seed corn to preserve tax breaks for the wealthy. As the TV hosts say, let's listen:

Major Garrett: Thank you, Mr. President. As you well know, sir, finding votes for the debt ceiling can sometimes be complicated. You yourselves as a member of the Senate voted against a debt ceiling increase. And in previous aspects of American history, President Reagan in 1985, President George Herbert Walker Bush in 1990, President Clinton in 1997 all signed deficit reduction deals that were contingent upon or in the context of raising the debt ceiling. You yourself four times have done that; three times those were related to deficit reduction or budget maneuvers.

What Chuck and I and I think many people are curious about is this new adamant desire on your part not to negotiate when that seems to conflict with the entire history in the modern era of American presidents in the debt ceiling and your own history on the debt ceiling. And doesn’t that suggest that we are going to go into a default situation, because no one is talking to each other about how to resolve this?

OBAMA: Well, no, Major. I think if you look at the history, getting votes for the debt ceiling is always difficult and budgets in this town are always difficult. I went through this just last year. But what’s different is we never saw a situation as we saw last year in which certain groups in Congress took such an absolutist position that we came within a few days of defaulting.

And, you know, the fact of the matter is, is that we have never seen the debt ceiling used in this fashion, where the notion was, you know what, we might default unless we get 100 percent of what we want. That hasn’t happened.

Now, as I indicated before, I’m happy to have a conversation about how we reduce our deficits further in a sensible way, although one thing I want to point out is that the American people are also concerned about how we grow our economy, how we put people back to work, how we make sure that we finance our workers getting properly trained and our schools are giving our kids the education we deserve. There’s a whole growth agenda which will reduce our deficits that’s important, as well.

But what you’ve never seen is the notion that has been presented so far at least by the Republicans that deficit reduction will only count spending cuts, that we will raise the deficit -- or the debt ceiling dollar for dollar on spending cuts. There are a whole set of rules that have been established that are impossible to meet without doing severe damage to the economy. And so what we’re not going to do is put ourselves in a position where in order to pay for spending that we’ve already incurred, that our two options are; we’re either going to profoundly hurt the economy, and hurt middle- class families, and hurt seniors, and hurt kids who are trying to go to college, or alternatively we’re going to blow up the economy. We’re not going to do that.
A daily double in legislative terrorism! The nation's full faith and credit held hostage, and the middle class and seniors held hostage!  But then cometh a more troubling question:
JULIANNA GOLDMAN: Thank you, Mr. President. I just want to come back to the debt ceiling, because in the summer of 2011, you said that you wouldn’t negotiate on the debt ceiling, and you did. Last year, you said that you wouldn’t extend any of the Bush tax cuts for the wealthy, and you did. So as you say now that you’re not going to negotiate on the debt ceiling this year, why should House Republicans take that seriously and think that if we get to the one minute to midnight scenario that you’re not going to back down? 
The response begins in sleight of hand and then rambles:
OBAMA: Well, first of all, Julianna, let’s take the example of this year and the fiscal cliff. I didn’t say that I would not have any conversations at all about extending the Bush tax cuts. What I said was, we weren’t going to extend Bush tax cuts for the wealthy. And we didn’t.

Now, you can argue that during the campaign, I said -- I set the criteria for wealthy at $250,000, and we ended up being at $400,000, but the fact of the matter is, millionaires, billionaires are paying significantly more in taxes, just as I said.

So from -- you know, from the start, my concern was making sure that we had a tax code that was fair and that protected the middle class. And my biggest priority was making sure that middle class taxes did not go up. You know, the difference between this year and 2011 is the fact that we’ve already made $1.2 trillion in cuts.  And at -- at the time, I indicated that there were cuts that we could sensibly make that would not damage our economy, would not impede growth.

I said at the time, I think we should pair it up with revenue in order to have an overall balanced package, but my own budget reflected cuts in discretionary spending. My own budget reflected the cuts that needed to be made. And we’ve made those cuts. Now, the challenge going forward is that we’ve now made some big cuts. And if we’re going to do further deficit reduction, the only way to do it is in a balanced and responsible way.

The alternative is for us to go ahead and cut commitments that we’ve made on things like Medicare or Social Security or Medicaid and for us to fundamentally change commitments that we’ve made, to make sure that seniors don’t go into poverty, or that children who are disabled, are properly cared for. For us to -- to change that contract we’ve made with the American people, rather than look at options like closing loopholes for corporations that they don’t need.

That points to a long-term trend in which you know we have fundamentally, I think, undermined what people expect out of this government, which is that parties sit down, they negotiate, they compromise, but they also reflect the will of the American people that you don’t have one narrow faction that able -- is able to simply dictate 100 percent of what they want all the time, or otherwise threaten that we destroy the American economy.

Another way of putting it is, we’ve got to break the habit of negotiating through crisis over and over again. And now that we’ve -- now is as good a time as any, at the start of my second term. Because if we continue down this path, then there’s really no stopping the principle. I mean literally -- even in divided government, even where we’ve got a Democratic president, and a Democratic Senate, and that a small group in the House of Representatives could simply say, you know every two months, every three months, every six months, every year we are going to more and more change the economy in ways that we prefer, despite strong objections of Americans all across the country, or otherwise we’re going to have America not pay its bills.

And, you know that is no way for us to do business.

And, by the way, I would make the same argument if it was a republican president, and a republican senate, and you had a handful of democrats who were suggesting that we are gonna hijack the process and make sure that either we get our way 100 percent of the time, or otherwise, you know, we are going to default on America’s obligations.
This response moves through three phases: 1) evasion of the question of how firmly he suggested that $250k would be a hard line in raising taxes for 'the wealthy'; 2) suggesting without really defending the fact that, while he always called for "balance" in deficit reduction, he let the spending cuts happen first, with none of the offsetting revenues he'd stipulated; and 3) the crisis negotiation that Goldman implicitly accuses him of enabling/rewarding needs to stop's bad.  The assertion that "we’ve got to break the habit of negotiating through crisis over and over again....Because if we continue down this path, then there’s really no stopping the principle" actually validates, indirectly, Goldman's implied accusation that he enabled this habit and to date there has been no stopping the principle. If the American people's faith that one of two parties in divided government could not "dictate 100 percent of what they want all the time" was undermined, it's because Obama appeared to give Republicans all they want (that is, none of what he publicly, repeatedly demanded) in August 2011 (in fact he won himself the crucial concession on the dead ceiling and helped cooked up the ambiguous and competing leverage points in the sequester, on which the jury is still out. But what he had emphasized to the public and urged citizens themselves to lobby for was new revenue.)

The followup, partly obscured by "inaudibles" in  the transcript, is not reassuring:
QUESTION: (inaudible)?

OBAMA: No, no look, what I’ve said is, is that I’m happy to have a conversation about deficit reduction.
QUESTION: (inaudible)?

OBAMA: No, Julianna, look, this -- this is pretty straightforward. Either Congress pays its bills, or it doesn’t.

Now, if -- and they want to keep this responsibility, if John Boehner and Mitch McConnell think that they can come up with a plan that somehow meets their criteria that they’ve set for why they will -- when they will raise the debt ceiling, they’re free to go ahead and try.

But the proposals that they’ve put forward, in order to accomplish that, only by cutting spending, means cuts to things like Medicare and education, that the American people profoundly reject.

Now, if they think that they can get that through Congress, then they’re free to try. But I think that a better way of doing this is to go ahead and say, “We’re going to pay our bills.” The question now is, how do we actually get our deficit in a manageable, sustainable way. And that’s a conversation I’m happy to have. 

Am I wrong in understanding this to mean that if Boehner and McConnell make deficit reduction proposals prior to the debt ceiling deadline, with the debt ceiling raise contingent (in their framing at least) on coming to agreement, Obama (or, as he casts it, his allies in Congress) will entertain those proposals?*  That sounds rather like negotiating under debt ceiling threat [wrong, yes -- see note below]. The rhetorical structure at work here -- if they "think that they can come up with a plan that somehow meets their criteria...that's a conversation I'm happy to have" - recalls this from a November 14 press conference about the then-looming Bush tax cut expiration:
CHUCK TODD: there no deal at the end of the year if tax rates for the top 2 percent aren’t the Clinton tax rates, period? No ifs, ands or buts and any room in negotiating on that specific aspect of the fiscal cliff?

OBAMA: With respect to the tax rates, I -- I just want to emphasize, I am open to new ideas. If the Republican counterparts, or some Democrats, have a great idea for us to raise revenue, maintain progressivity, make sure the middle class isn’t getting hit, reduces our deficit, encourages growth, I’m not going to just slam the door in their face. I want to hear -- I want to hear ideas from everybody.
Once again, there are ifs, ands or buts.

On the plus side, I do think that implicit in Obama's presentation today is a better answer to Goldman's question: that Obama has quite consciously learned from experience, and that the next round of negotiations will redress obliquely acknowledged first-term errors. More on that in the next post.

*Yes, on a fresh read three hours later, I do think I was wrong to yoke these separate statements via elipsis: "if John Boehner and Mitch McConnell think that they can come up with a plan that somehow meets their criteria...that's a conversation I'm happy to have."  In fact, he is daring them to try to get legislation enacting wildly unpopular proposals through Congress but suggesting that only after they pass a clean debt ceiling bill is he "happy to have" a conversation  about "how do we actually get our deficit in a manageable, sustainable way."  And the invitation to try to get a debt ceiling bill that meets their own criteria (some $2.5 trillion in new spending cuts with no new revenue) through Congress does not imply a willingness on his part to engage with such "ideas."

In fact, ever since the debt ceiling debacle, Obama's periodic invitations to Republicans to put forward concrete proposals are a caricature of his longstanding "the other side may have a point/let's exchange good ideas" stance. These days, Obama's characterization of Republican ideas is generally reductio ad absurdum -- "take two tax cuts and call me in the morning." What's left is an invitation to trade desideratum -- and perhaps (I would guess), if revenue and spending cut goals can be settled on, to come to some genuine agreement as to what works best in each category.


  1. Long-time reader, first-time commenter.

    Regarding your rhetorical question "Am I wrong to understand...?", I heard it differently when I watched the presser from my sickbed today. I heard him saying that the Republicans are welcome to try to pass a dollar-for-dollar plan because he knows they will fail in the Senate and in the meanwhile they will make explicit the fact that you have to cut very popular programs in order to achieve the dollar-for-dollar standard, thereby actually weakening their political/negotiating position.

    This is essentially the same reason why we were treated to the absurd spectacle in December of John Boehner insisting that *Obama* outline the entitlement cuts that Republicans were demanding -- because it's still politically toxic to describe those cuts out loud.

    Great blog - thanks for all your work!

  2. No, I don’t think that was an open door to negotiation on the debt ceiling. I’m not entirely convinced that he’ll keep that door closed until it’s raised or eliminated, but I’m 90% of the way there. (In fact, this salvo tracks very closely the course I hoped he would take, which I detailed several days ago in a thread on TPMPrime. I was really happy to hear it today.)

    The president was indeed close to top form today, but he’s never been as clear and expert in extemporaneous remarks as, say, the Big Dog was at his best. This was good, but he had some bumps, mainly, as you illuminate, when he didn’t have a good excuse.

    And he wasn’t sharp in this response. But I think he was just trying to reiterate that any negotiation over balanced deficit reduction will only happen outside of the context of the debt ceiling.

    Goldman’s second inaudible question was something like: “So you do think we are going into negotiations --” and he cut her off. She was being a bit dull-witted about the whole thing. And so when he said, “look, this -- this is pretty straightforward. Either Congress pays its bills, or it doesn’t,” he was echoing his previous “deadbeat nation” answer to Chuck Todd: “Well, Chuck, the issue here is whether or not America pays its bills.”

    In that answer, he raised the possibility that Congress could cede the debt ceiling authority to him: “Now, if the House and the Senate want to give me the authority so that they don’t have to take these tough votes, if they want to put the responsibility on me to raise the debt ceiling, I’m happy to take it.”

    But then he warned that “if they want to keep this responsibility, then they need to go ahead and get it done. And, you know, there are no magic tricks here. There are no loopholes. There are no, you know, easy outs.”

    In his answer to Goldman, he repeated the “keep this responsibility” idea, implying that he was intending to reiterate to the “get it done,” “no easy outs” hard line.

    But then he freelanced in a way that’s all too familiar: He likes to allow for Congressional prerogative, for the obvious fact that the GOP (House at least) can do and pass anything it really wants to. Acknowledging their power in this way never really adds to the force of his argument, but he apparently can’t help himself.

    But here I think he was intending it as a brushback. In raising Boehner and McConnell’s criteria, he was referring back to his rejection of those criteria in his previous answer to Chuck Todd:

    “Now, keep in mind that, you know, what we’ve heard from some republicans, in both the House and the Senate, is that they will only increase the debt ceiling by the amount of spending cuts that they’re able to push through. And, in order to replace the automatic spending cuts, the sequester, that’s $1.2 trillion. Say it takes another $1 trillion or $1.2 trillion to get us through one more year, they’d have to identify $2.5 trillion in cuts just to get the debt ceiling extended to next year, $2.5 trillion.
    They can’t even -- Congress has not been able to identify $1.2 trillion in cuts that they’re happy with, because these same republicans say they don’t want to cut defense. They’ve claimed that they don’t want to gut Medicare or harm the vulnerable, but the truth of the matter is, is that you can’t meet their own criteria without drastically cutting Medicare, or having an impact on Medicaid, or affecting our defense spending. So the math just doesn’t add up.”

    (Continued below)

  3. (continued from comment above)

    So here’s my read on the subtext of his clipped and fuzzy answer to Goldman:

    “Sure, they can put some crazy numbers together and pass it with rip-roaring Tea Party support in the House--that’s their right. But don’t look surprised when it’s DOA in the Senate, because the Senate understands that the American people profoundly reject those ideas. Now, if they actually think that they can get that through Congress, then they’re free to try. But it’s a waste of time. The only answer is to pay our bills, and raise the debt ceiling. And if they want to permanently hand over that responsibility to the executive branch, that’s fine with me. But once that’s settled, the question remains: how do we get the last $1.5 trillion of balanced deficit reduction? And that’s a conversation I’m happy to have.”

    Sound plausible?

  4. Andrew, and Anon, thanks for the explication -- you're plainly right. Last night I reread the post and came to the same conclusion, per the update. Through some glitch, it seems I haven't been getting comments from Blogger for some days (in my email, that is) -- if I'd seen your comments I could have spared myself some trouble w/ the postscript and simply referred readers to you.