"Not this time": Obama revises himself

The headline takeaway from Obama's press conference yesterday is that he's talking tough about the debt ceiling. And indeed, he elaborated his case against holding the faith and credit of the nation hostage in new and forceful ways. What also struck me, though, is the extent to which Obama implicitly admitted that the obstacles he is now facing are partly of his own making. In fact, since late in his reelection campaign he has been casting is second term as an edited version of the first.

On the economic front, Obama reiterated three core messages yesterday:1) The debt ceiling is no frame within which to negotiate deficit reduction; 2) deficit reduction is not our chief problem; and 3) Republicans' chief goal is to weaken core government functions and commitments, radically altering the social contract. Each was to some degree a revision of a past stance.

Regarding the debt ceiling, as Ezra Klein pointed out yesterday, Obama has been unequivocal since the election: it is not a negotiating chip in budget battles.  Yesterday he stated this simply, forcefully and repeatedly.  Here is the first iteration, in his opening remarks:

Now, the other congressionally imposed deadline coming up is the so-called debt ceiling, something most Americans hadn’t even heard of before two years ago. So I want to be clear about this: The debt ceiling is not a question of authorizing more spending. Raising the debt ceiling does not authorize more spending. It simply allows the country to pay for spending that Congress has already committed to.

These are bills that have already been racked up, and we need to pay them. So while I’m willing to compromise and find common ground over how to reduce our deficits, America cannot afford another debate with this Congress about whether or not they should pay the bills they’ve already racked up.

If congressional Republicans refuse to pay America’s bills on time, Social Security checks and veterans’ benefits will be delayed. We might not be able to pay our troops or honor our contracts with small business owners. Food inspectors, air traffic controllers, specialists who track down loose nuclear materials wouldn’t get their paychecks. Investors around the world will ask if the United States of America is in fact a safe bet. 

Markets could go haywire. Interest rates would spike for anybody who borrows money, every homeowner with a mortgage, every student with a college loan, every small business owner who wants to grow and hire. It would be a self-inflicted wound on the economy. It would slow down our growth, might tip us into recession, and ironically, would probably increase our deficit. 

So to even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible. It’s absurd. As the speaker said two years ago, it would be -- and I’m quoting Speaker Boehner now -- “a financial disaster not only for us but for the worldwide economy.” So we got to pay our bills. And Republicans in Congress have two choices here: They can act responsibly and pay America’s bills or they can act irresponsibly and put America through another economic crisis.

Complicating Obama's ability to put this message across is the fact that he took a very different tack in the debt ceiling negotiations in the summer of 2011.  While he did decry the irresponsibility of letting the Treasury default, or threatening to, he also embraced deficit reduction negotiation under the debt ceiling deadline as "a unique opportunity to do something big"  -- rejecting, a month before the drop-dead August 1 dead limit was reached, calls to strike a more limited bargain:

As recently as April [2011], the White House was pushing to decouple long-term budget talks from extending the debt ceiling—which the administration says will cause some obligations to go unpaid beginning on August 2 if Congress does not act. On Tuesday, however, Obama sought to leverage the debt limit debate to push for a debt-reduction deal and said the deal needs to be done in the next two weeks.

“We’ve got a unique opportunity to do something big…..We know that it’s going to require tough decisions,” Obama told reporters. “I think it’s better for us to take those tough decisions sooner rather than later. That’s what the American people expect of us. That’s what a health economy is going to require. That’s’ the kind of progress that I expect to make.”

That stance of a year and half ago casts his most definitive rejections of negotiation-by-hostage taking, such as in his response yesterday to a question from Chuck Todd, as an unspoken rewrite of his own past conduct:

What I will not do is to have that negotiation with a gun at the head of the American people; the threat that unless we get our way, unless you gut Medicare or Medicaid or, you know, otherwise slash things that the American people don’t believe should be slashed, that we’re going to threaten to wreck the entire economy. That is not how historically this has been done. That’s not how we’re going to do it this time. 

The key word here is "this time." Everyone knows that not cutting a last minute deal will be a departure from his past conduct -- in December 2010, July 2011, and last month. In fact, yesterday Obama came close to admitting, in response to a direct challenge to his negotiating credibility from Julianna Goldman, that the precedent he is determined to reverse is his own:

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.

Obama's second message revision was a de-prioritization of deficit reduction -- which he cast as two-thirds complete, relatively easy to finish, and more an enabler of meaningful government action than "something big" in itself:

So it shouldn’t be surprising, given all this talk [of debt ceiling brinksmanship], that the American people think Washington is hurting rather than helping the country at the moment. They see their representatives consumed with partisan brinksmanship over paying our bills while they overwhelmingly want us to focus on growing the economy and creating more jobs. 

So let’s finish this debate. Let’s give our businesses and the world the certainty that our economy and our reputation are still second to none. We pay our bills, we handle our business, and then we can move on because America has a lot to do. We’ve got to create more jobs. We’ve got to boost the wages of those who have work. And we’ve got to reach for energy independence. We’ve got to reform our immigration system. We’ve got to give our children the best education possible, and we’ve got to do everything we can to protect them from the horrors of gun violence.

This self-edit is more a shift in emphasis than a change in message. After the debacle that ended with passage of the Budget Control Act in August 2011, Obama explained that he had agreed to focus on deficit reduction because he saw resolution as a way to clear the decks for more pressing priorities -- short-term job creation and long-term investment in education, infrastructure, alternative energy and other pillars of sustainable growth. That was an implicit admission that he had effectively ceded the agenda from January through August, and he followed up by proposing the JOBS Act that September.  Now he expresses a world-weariness, an impatience, a dismissiveness with regard to the final $1.5 trillion in deficit reduction that he regards as still on the table. Let's split the difference and get it done, he suggests, and move on:

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 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. 

Finally, in concert with drawing a hard line with respect to the debt ceiling, Obama is ever more stark in characterizing Republican priorities: he is pushing them up against that deadline of their own composition, daring them to put up or shut up in proposing spending cuts to core programs. In fact he is bidding simultaneously to divide the GOP and appeal to its better angels, highlighting the extremism of the House rank-and-file and challenging the leadership to reject it:

But -- but the larger issue here has to do with what is it that we’re trying to accomplish. Are we trying to reduce the deficit? Because if we’re trying to reduce the deficit, then we can shape a bipartisan plan to reduce the deficit. I mean, is that -- is that really our objective? Our concern is that we’re spending more than we take in, and if that’s the case, then there’s a way of balancing that out so that we take in more money, increasing revenue, and we reduce spending. And -- and there’s a recipe for getting that done. 

And in the conversation that I had with Speaker Boehner before the end of the year, we came pretty close. I mean, a few hundred billion dollars separating us, when stretched out over a 10-year period, that’s not a lot.

But it seems as if what’s motivating and propelling at this point some of the House Republicans is more than simply deficit reduction. They have a particular vision about what government should and should not do. So they are suspicious about government’s commitments, for example, to make sure that seniors have decent health care as they get older. They have suspicions about Social Security. They have suspicions about whether government should make sure that kids in poverty are getting enough to eat or whether we should be spending money on medical research. So they -- they got a particular view of what government should do and -- and should be.

And that view was rejected by the American people when it was debated during the presidential campaign. I think every poll that’s out there indicates that the American people actually think our commitment to Medicare or to education is really important, and that’s something that we should look at at as a last resort in terms of reducing the deficit, and it makes a lot more sense for us to close, for example, corporate loopholes before we go to putting a bigger burden on students or seniors.

But if the House Republicans disagree with that and they want to shut down the government to see if they can get their way on it, that’s their -- that’s their prerogative. That’s how the system is set up. It will damage our economy. You know, the -- the government is a big part of this economy.

To the GOP leadership, his message is that their stated spending goals, presented as attractive abstractions (cut another $2.5 trillion in spending) require acceding to those extremist and unpopular goals:

If John Boehner and Mitch McConnell think that they can come up with a plan that somehow meets that 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.

As a winner of two presidential campaigns, one Senate campaign and a handful of state Senate campaigns, Obama has of course attacked Republican priorities before.  But in his final campaign and the ensuing budget battles, he has grown acid in his characterization of those priorities.  As the negotiating ground has narrowed, he has sharpened the ideological contrast.  He does not bend over backwards to highlight Republican "good ideas," as he did in the healthcare summit of February 2010 -- except those Republican ideas that he's already adopted and they've subsequently demonized (e.g., IPAB, or the individual mandate).

A favorite Obama tagline in the 2008 campaign and subsequently was not this time.  Rhetorical and campaign tricks that had worked in the past would not work now; policy business, e.g., inaction on on healthcare reform, would not proceed as usual.  "Not this time" is Obama's message once again. On this go-round, however, the precedents he's vowing to break or amend are in large part his own.