Obama Conditions Debt Hike on Reopening Government

Obama Conditions Debt Hike on Reopening Government

Since the beginning of the fiscal showdown, President Obama has stressed that he wouldn’t negotiate over raising the debt ceiling. His top economic advisor Gene Sperling has regularly repeated Obama’s stance, “If you sanction through negotiation the legitimacy of somebody threatening default then, that is going to happen over and over again.” Now that the House GOP has agreed, at least temporarily, to Obama’s demands on the debt ceiling, he wants to add conditions. 

The latest proposal from the House GOP is for a “clean” hike in the debt ceiling lasting six weeks. Their hope is that the six-week window will buy time for both sides to agree on a longer-term budget deal. While the White House has said Obama is open to signing such a “clean,” short-term increase, he won’t do so unless the Republicans also reopen government. Of course, if Congress doesn’t agree to Obama’s terms, the nation risks a possible default once it hits the debt ceiling sometime this month. 

The argument that there shouldn’t be negotiations over a debt ceiling hike was always specious. In the 40+ times the debt ceiling has been lifted over the past few decades, there have always been talks on spending cuts or other policy reforms. Were Obama’s position to prevail, it would set a new precedent for fiscal talks between Congress and the President and shift the power balance towards the White House. 

What Obama really means, as illustrated by his latest demand, is that other people don’t get to negotiate. Obama doesn’t object to the short-term window of the GOP proposal; he rejects it because it doesn’t contain another policy outcome he wants. 

He is demanding the GOP “sanction the legitimacy of somebody threatening default” on the nation’s debt. Knowing the GOP, they will likely acquiesce.