When it comes to the debt ceiling, the White House has a credibility problem. Their plan is to simply refuse Republican demands to negotiate over the debt ceiling. But for that plan to work, Republicans need to believe the White House won't negotiate over the debt ceiling. Otherwise, they'll refuse to raise the debt limit, assuming that as we get closer to actually breaching the ceiling, the White House will be forced to the table.
At the moment, Republicans don't believe the White House. Nor does the media. Or, really, anyone. This White House is seen as almost congenitally unable to resist negotiations. At today's news conference, Bloomberg's Julianna Goldman put the question directly to President Obama:
I just want to come back to the debt ceiling, because in the summer of 2011, you said that you wouldn’t negotiate on the debt ceiling, and you did. Last year, you said that you wouldn’t extend any of the Bush tax cuts for the wealthy, and you did. So as you say now that you’re not going to negotiate on the debt ceiling this year, why should House Republicans take that seriously and think that if we get to the one-minute-to-midnight scenario that you’re not going to back down?
Obama's news conference was, in a sense, designed to elicit exactly this question. And Obama had his answer ready. "We’ve got to break the habit of negotiating through crisis over and over again," he said. "And now is as good a time as any, at the start of my second term."
In recent weeks, Obama has been taking almost every opportunity to step in front of cameras and say, as clearly as possible, that he will not negotiate over the debt ceiling. On Dec. 5, he went to the Business Roundtable and said: "We are not going to play that game again next year. We've got to break that habit before it starts."
On the 19th, he held a news conference where he was no less emphatic. "I’ve put forward a very clear principle: I will not negotiate around the debt ceiling."
On Jan.1, he gave a statement on the fiscal cliff deal. "While I will negotiate over many things," he said, "I will not have another debate with this Congress over whether or not they should pay the bills."
On the 4th, he gave a radio address in which he repeated the message. "One thing I will not compromise over is whether or not Congress should pay the tab for a bill they’ve already racked up," he said.
Then there was today's news conference, which was almost solely devoted to the debt ceiling. "To even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible," Obama said in his prepared remarks. "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.' "
There's a reason behind the White House's repetition of this rhyme. Obama is purposefully painting himself into a corner. He has taken all the various end runs around the debt ceiling — the platinum coin, the 14th Amendment, etc. — off the table. And he's saying he won't negotiate over the debt ceiling so loudly, so emphatically, so clearly, and so often that he is putting his credibility on the line. If, after all this, he does indeed negotiate over the debt ceiling, the White House will lose all credibility in all negotiations going forward. That's not something they can afford to do, and so the White House is hoping that Republicans, once they realize what Obama is doing, will realize he's serious: He really won't negotiate over the debt ceiling. At this point, he's made it so that he can't.
Of course, the Republicans have made similar public commitments, most notably House Speaker John Boehner's principle that every dollar in debt-ceiling increase needs to be matched by a dollar in spending cuts. At today's news conference, Obama tried to offer Boehner a way out:
Now, keep in mind that, you know, what we’ve heard from some Republicans, in both the House and the Senate, is that they will only increase the debt ceiling by the amount of spending cuts that they’re able to push through. And, in order to replace the automatic spending cuts, the sequester, that’s $1.2 trillion. Say it takes another $1 trillion or $1.2 trillion to get us through one more year, they’d have to identify $2.5 trillion in cuts just to get the debt ceiling extended to next year, $2.5 trillion.
They can’t even — Congress has not been able to identify $1.2 trillion in cuts that they’re happy with, because these same Republicans say they don’t want to cut defense. They’ve claimed that they don’t want to gut Medicare or harm the vulnerable, but the truth of the matter is, is that you can’t meet their own criteria without drastically cutting Medicare, or having an impact on Medicaid, or affecting our defense spending. So the math just doesn’t add up.
Now, what — here — here’s what would work. What would work would be for us to say, we’ve already done close to $2 trillion in deficit reduction, and if you add the interest that we won’t be paying, because of less spending and increased revenue, it adds up to about $2.5 trillion.
This kind of thing is too clever by at least half. It's the sort of lawyerly hair-splitting that makes Republicans think the White House will, in the end, figure out some complicated rationale for negotiating with them. If the White House wants to solve their credibility problem on the debt ceiling, they need to cut it out. Negotiate, or do not negotiate. There is no clever way to split the difference.