But this is wrong. In 1995, congressional Republicans ran the same play that the GOP is trying this year, threatening to let the debt ceiling cave in if President Bill Clinton didn’t give in to their demands. Those demands? Legislation to “curtail appeals by death row prisoners,” eliminate the Commerce Department, and a “down payment” on deficit reduction.
The response will sound familiar. Clinton called the demands “economic blackmail, pure and simple.” The New York Times editorialized that Republicans were “playing an ugly game of political coercion that will force President Clinton to accept dubious programs that he would otherwise veto or else risk endangering the Government’s credit rating.” It all sounds much like the current situation, though former Treasury secretary Robert Rubin, who steered us through the 1995 crisis, thinks the fragility of the recovery and our long-term debt outlook makes 2011 a much more dangerous year for economic shenanigans than 1995 ever was.