Lessons for the Next Debt Fight
Obama the gambler, the not so bully pulpit, extortion pays, and the GOP's deficit problem
"Debtmageddon" ended not with a financially cataclysmic bang, but with a classic beltway whimper, sounding like a political football being punted. Faced with a fiscal Gordian knot, the nation's leaders banked the cuts they could agree on and pushed the intractable problems to a congressional "super committee."
While we wait for that skirmish, here are five lessons from this one.
1. Obama is a gambler
In office, President Obama has confounded friends and underwhelmed adversaries with his stubborn fidelity to the politically possible.
So while he became the president who finally enacted healthcare reform, he infuriated his base by not pushing a public option hard enough. But if he is a cautious player at the political card table, he is also one with a keen sense of opportunity -- and a gambler's willingness to push all of his chips into the middle of the table. So while he folded on the public option, he bet everything on closing the healthcare deal even after Democrats lost their filibuster-proof Senate majority. Presented the opportunity to rid the world of Osama bin Laden, Obama took a bold, risky approach -- sending in troops rather than bombarding the site with missiles. So too during the debt ceiling negotiations. Obama pushed for a $4 trillion "grand bargain" that would not only have fixed the nation's fiscal problems, but, he hoped, neutralize spending as a political issue. He didn't close that deal, but it illuminated the pragmatist's aggressive side.
2. Not so bully a pulpit
Progressives complain that Obama underuses the "bully pulpit." Not so on the debt ceiling. From June 29 until he announced the deal at the end of July, Obama held four press conferences, dropped by the briefing room to make statements three other times, made other brief White House remarks twice, and gave a formal national address. He also had a "Twitter town hall," a regular town hall, and made numerous local television appearances.
And it worked. Polls showed the public preferred deficit reduction with both spending cuts and tax hikes and, more broadly, a willingness to compromise over principled inflexibility. Critics say that Obama should have started this push earlier, but that overestimates the power of the pulpit. The country must be primed to receive a message. "The nation will listen only if it is a moment of great urgency," John F. Kennedy once noted. "But they won't listen to things which bore them. That is the trouble." And even with the polls showing Obama had won the PR war, the GOP dug in. The bully pulpit moved public opinion, but not enough to overcome the party's activist, virulently anti-tax base, which wanted hardball.
3. Extortion pays
It bears repeating: The debt ceiling crisis was a deliberate creation of the GOP.
Raising the debt ceiling used to be a matter of political routine, sometimes subject to political point-scoring by the opposition. But no one had seriously suggested not raising it because the debt ceiling isn't about new spending but rather paying bills Congress has already run up. Failure to pay would have cataclysmic economic consequences, which the GOP was willing to threaten unless it got its way. And the tactic worked because some of their number either didn't believe there would be negative consequences, or -- worse -- thought that economic harm was the kind of strong medicine the United States requires for its fiscal sins.
This deliberate crisis was defused. But the GOP's success guarantees there will be more. Senate Minority Leader Mitch McConnell has called this "the new template." And while Vice President Joe Biden caught flack for allegedly calling this political terrorism, McConnell doesn't mince words, describing the debt ceiling as "a hostage that's worth ransoming." He'll sing a different tune when a Democratic Congress applies this new paradigm to a GOP president, but in the meantime Republicans have a breathtakingly irresponsible new tool to press their policies.
4. The GOP has a deficit problem
The Republican Party doesn't care about the budget deficit. They care passionately about cutting spending. And they have a theological fervor on the topic of keeping tax rates low. A key part of the conservative catechism is the idea that we don't have a taxing problem, only a spending problem.
But this is simply untrue: Federal tax revenues as a percentage of gross domestic product are at a 50-year low. Nevertheless the Republicans were prepared to crash the economy in the name of dealing with the budget imbalance, while only addressing one side of the ledger.
5. The angel's in the details
Obama's penchant for negotiating himself from a liberal to a moderate position even before engaging conservatives means that the GOP wins the top-line arguments in these showdowns. But give the White House team credit for winning the battle of details. The April deal averting a government shutdown included $38.5 billion in spending cuts (more than the GOP originally asked for), which upon further review was only actually $352 million. So too the debt ceiling deal. The initial cuts include a good chunk from the Defense Department. And if the "supercommittee" stalemates trying to find $1.5 trillion in savings, as seems likely, the triggered automatic cuts are smaller ($1.2 trillion), also strongly focus on the defense budget, and exempt Social Security, Medicaid, and Medicare benefits (payments to Medicare providers would be trimmed).
And taxes? With the Bush tax cuts scheduled to expire at the end of 2012, Democrats have the power of obstinacy -- inaction will lead to their policy goals.
Whether they will be able to take advantage of this friendlier political ground remains to be seen.
Read the latest political news.
- Tea Party Decline Hopeful Sign for Thinking Americans
- Lessons for the Next Debt Fight
- Rob Portman May Be Pivotal to 'Super Committee' Success
- The Death of a Principled Moderate
- Why America is Deeply in Need of a Good Hedgehog
- Obama Has Nothing To Lose With Jobs Push
- Obama Fights Broken System, but it May Be the Wrong Fight
- The Man Who Doesn't Want to Be President
- What if the President Liked Businesspeople?
- Where's Obama's Fight?
- Who's In, Who's Out
- How Would Rick Perry Reform Health Care If President?
- Republicans' Big Problem in 2012 -- Hispanics
- Religion and Budget Issues Dog Rick Perry
- First Impressions in Politics
- Perry Criticism Pushes Bernanke Further Into Political Limelight
- Super PACs Changing 2012 Landscape
- Tea Party Champion Ron Paul Takes Bow in New Hampshire
- Is Ron Paul a Fringe Candidate?
- Will Obama Win or Not Lose in 2012?
- Why the New Health-Care Law Should Have Been Based on Medicare
- The Boat Leaks From the Bottom
- A New Wave of Bigotry?
- Congress to Dissect Pentagon Report on China's Military Development
- We Need a Bold Jobs Bill to Stop the Double-Dip
- Who's Worse Off: Europe or the United States?
- Why Are Some Progressives Gloating over Libya?
- Obama Calls for Syrian President Assad to Step Down
- Violence in Iraq Raises Questions About American Withdrawal
- Young Westerners -- Deprived or Decadent?
- How New Atrocity-Prevention Steps Can Work
- The Mob That New Technology Has Made
- Unfinished College Degree Means Less Money
- What Kinds of Federal Spending Create the Most Good Jobs?
- Americans Favor Tax Hikes on Wealthy to Reduce Nation's Debt
- 78 Percent of Americans Dissatisfied with Government
- Standard and Poor's Downgrade Not Likely to End Partisan Gridlock
- America Forced to Swallow 'Satan Sandwich'
- Tightening the Pentagon's Belt
- The Only Social Security Reform Worth Considering
- Shock Study: U.S. Flag Only Boosts GOP
- For These Republicans, There's Only One Problem: Obama
- Obama Should Take a Lesson from George H.W. Bush
- Is the President in Recovery?
- Will Debt Deal Cost Obama His Liberal Base?
- Is the Tea Party Over?
- Debt Ceiling Stalemate Illustrates the Tea Party's Reality Gap
- Should You Talk Politics Online?
- Talkin' About Your Generation
- Spare Us the Sermons Mr. President
- Don't Assume the Hispanic Vote Is a Democratic Lock
- Political Will for Corporate Tax Reform Reaching Critical Mass
- Democrats Get Ready for Next Debt Fight
- America Downgraded!
- Who Stands for Americans?
- Along with Lack of Jobs, A Wage Problem
- What The Economy Looks Like at Stall Speed
- The Empathy Deficit
- Crisis of Confidence: Debt Debate Erodes US Global Standing
- What Fox News Is Not
- Obama Is No LBJ
- Partisanship Run Amok Obama Is Out of Options
- 2012 Elections: Reagan Playbook No Longer Applies
- Alec Baldwin Going Back To School To Become Mayor Of NYC
- The Terminology of Taxation
- United States Debt Downgrade Won't Have Much Short-Term Effect on Foreign Policy
- Global Economic Downturn: A Crisis of Political Economy
- United States Economy A Pyramid Scheme
- Raising Debt Ceiling United States Avoids Default
- China Expresses Disgust Over United States Debt Deal
- Debt Ceiling Deal Could Threaten Economic Recovery
- Congress's Spending Debate Won't End With Debt Ceiling
- Debt Deal: Ransom Paid
- Debt Deal - Bold Step; Wrong Direction
- Debt Deal: One-Sided Compromise
- Debt Deal: A Satanic Deal for Debt Fighters
- Obama Signs Compromise Debt Ceiling Bill
- Debt Deal Puts Off Hard Choices for Now
- Senate Set to Give Final Approval to Debt Ceiling Bill
- Despite Debt Deal, Prolonged Deadlock Caused Political Damage
- Who Won the Debt Ceiling Standoff?
- GOP 2012 Contenders Criticize Debt Deal
- Florida Rejects Grants from Affordable Care Act
- Media Takeaways From the Latest Round of Scandals
- Michele Bachmann's 'Submerged' Benefits
- Fight Over Financial Safeguards: Another Front In The Partisan Warfare
- Green, Shovel-Ready Stimulus -- 100 Years Ago
- When Politics Stop Working
- Conservative Appeals Court Judge Paves the Way for Affordable Health Care
- New Fears EPA Smog Rule Will Cost 7.3 Million Jobs
- Eroding the Social Contract
- Can 'Gang of Six' Save the Day on Debt Ceiling?
- Do We Need the Debt Ceiling?
- The Ideologue in the Oval Office
- The Rise of the Wrecking-Ball Right
- Many Ideas for Job Creation, but Little Action
- Eliminating Mortgage Interest Deduction Could Further Hobble Housing Recovery
- War Fatigue and the Un-Critical Critics of War
- Obama's Expanded Militarism
- Obama's Bush-League World
- Debt Fight Reinforces China's Negative Views of America
- Rupert Murdoch's Legacy -- Greater Press Controls
- Military-Industrial Journalism
- On Journalistic Credibility
- Another Blow to Journalism's Image
- 5 Ways Michele Bachmann Can Win 2012 Swing Voters
- A Religious Test for 2012?
- EPA Budget and Power Under Attack from Republicans
- GOP Takes Dead Aim on EPA
- The Question is Jobs
- Panetta's Gaffe
- Declaring a National Emergency
- The Federal Debt Limit Debate: A Leadership Opportunity
- Millionaires and Billionaires
- The Presidency Matters, But How Much Does Obama?
- Obama's Reagan Parallels Are Falling Away
- The President's Jobs Plan
- Budget Debate Has Troublesome Historical Underpinnings
- It's Back! The Misery Index Rides Again
- Handling Big Contradictions
- Why Are We Afraid to Cross the Lines that Divide Us?
- Bernie Sanders: Make the Rich Pay Off the Deficit
- The Free Market Fails at Food Safety
- The Growing Desperation of the Don't-Raise-Taxes-on-the-Rich Crowd
- If Not This, Then What Are Our Taxes Paying For?
- Debt Limit Irresponsibility
- Debt Ceiling Deal Could Mean Social Security Cuts
- The Tax Cuts for the Rich Again
- Stand-Up Time for Obama
- President Obama's Balancing Act
- New Jersey Miracle: What About the Rest of Us?
- For 2012 Republicans: The Economy Trumps the Culture War
- Michele Bachmann's Beginnings
- GOP Attacking Americans' Right to Vote
- Marco Rubio: Ready for Political Primetime
- 'Mortal Kombat' and the First Amendment
- The Unethical Clarence Thomas
- On Humanitarianism: Is Helping Others Charity or Duty or Both?
- Does Obama Have a Grand Strategy?
- How Health Care Can Save or Sink America
Available at Amazon.com:
Lessons for the Next Debt Fight | Politics
(c) 2011 U.S. News & World Report