The PJ Tatler

Obama to GOP: Drop Dead on Negotiating a Debt Limit Deal

Fresh from negotiating a deal that raised $41 in new taxes for every $1 in spending cuts, President Obama said that he won’t negotiate with Republicans when it comes to raising the nation’s debt limit, and hinted that future fiscal cliff deals should not deal seriously with spending cuts.


“We still need to do more to put Americans back to work while also putting this country on a path to pay down its debt, and our economy can’t afford more protracted showdowns or manufactured crises along the way,” he said in the address, broadcast on Saturday.

“Because even as our businesses created 2 million new jobs last year – including 168,000 new jobs last month – the messy brinkmanship in Congress made business owners more uncertain and consumers less confident.”

Government data released on Friday showed the U.S. unemployment rate remained at 7.8 percent in December.

Lawmakers in the Senate and the House passed legislation this week that raised tax rates for the wealthiest Americans while making Bush-era tax cuts for the middle class permanent.

It was a victory for Obama, who campaigned for re-election largely on a promise to achieve that goal.

Republicans have indicated that they are ready for another fight over the U.S. debt ceiling. Representative Dave Camp, delivering his party’s weekly address, warned, at least indirectly, that they would expect spending cuts in return for raising the ceiling again.

“Many of our Democrat colleagues just don’t seem to get it. Throughout the fiscal cliff discussions, the president and the Democrats who control Washington repeatedly refused to take any meaningful steps to make Washington live within its means,” Camp said.

“As we turn our attention toward future discussions on the debt limit and the budget, we must identify responsible ways to tackle Washington’s wasteful spending.”

Obama repeated that he would not negotiate on the debt ceiling, hoping to avoid the 2011 conflict that led to a credit rating downgrade and pushed the country close to default.

“If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire global economy could be catastrophic,” he said. “Our families and our businesses cannot afford that dangerous game again.”

Obama said he was willing to do more on deficit reduction and suggested that the hike in tax rates for wealthy Americans was not the last tax change he expected to make.

“Spending cuts must be balanced with more reforms to our tax code,” he said. “The wealthiest individuals and the biggest corporations shouldn’t be able to take advantage of loopholes and deductions that aren’t available to most Americans.”

More soak the rich rhetoric and reliance on tax hikes rather than spending cuts to bring down the deficit. In fact, the words “deficit reduction” never seem to be uttered by the president unless there is mention of more tax increases.

Note that there is no more talk of a “balanced” approach to deficit reduction. Of course, the fiscal cliff deal was anything but, and that appears to be the president’s strategy going forward. Why cut any spending at all? Why even negotiate spending cuts? The president doesn’t want more “protracted showdowns” or “manufactured crisis.” He wants the GOP to sit down, shut up, and acceded to his notion of deficit reduction.

Liberals are seeking to hold the president’s feet to the fire on resisting reforms to Social Security and Medicare. At this point, he seems to be listening. Indeed, the president’s refusal to negotiate on the debt deal will create one of these “manufactured crisis” he deplores — with Obama doing the manufacturing.

The good news is that Republicans are not going to let the president get away with it. The bad news is that Republicans are going to have to negotiate — again. It would be optimistic to hope for a better outcome this time, but there is nothing in the record that indicates that will be the case.