It's Either A Ransom Or A Bargain, Not Both

Jonathan Chait
TNR
May 13, 2011

The debt ceiling negotiations are very hard to figure out, because every side has an incentive to keep its bottom line hidden from public view. That said, I don't understand what President Obama is thinking here. First, he's allowed Republicans to turn the debt ceiling into an opportunity to wrench policy concessions, something that has never happened before. If he announced from the outset that debt ceiling votes have never been bargaining chips for policy changes, and that he would only sign a clean debt ceiling hike, and any failure to raise the debt ceiling is the GOP's responsibility, do you think Republicans could stand up to pressure from business? I don't. But we'll never know because Obama gave up that leverage immediately.

Second, he's allowing Republicans to take hostages without specifying their demands. David Brooks, who spends a lot of time talking to Republicans in Congress, has some good insight into their bargaining strategy on the debt ceiling:

Events are being driven by the Republican leaders. The playing field on the debt-ceiling fight is tilted in their direction, so they want to make this fight as consequential as possible. They want to use this occasion to reshape fiscal policy for decades.

They have the advantage, first, because raising the limit is extremely unpopular. According to a poll commissioned by The Hill newspaper in Washington, only 27 percent of Americans want to raise the debt ceiling while 62 percent oppose it. The only time you can get voters, especially independent voters, to tolerate a debt-ceiling increase is if you tie it to a broad array of spending cuts.

(Continued here.)