The fiscal cliff negotiations have picked up again. Last week, President Obama and House Speaker John Boehner were hardly talking, and neither were their staffs. This week, Obama and Boehner are speaking often, and, perhaps more importantly, their staffs are speaking constantly. One sign that the negotiations are going well: Little is leaking.
The debt ceiling, however, is proving a key sticking point, both in terms of politics and policy.
The political problem is that many Hill Republicans have convinced themselves that they'll have the upper hand if they let the country topple fully or mostly over the cliff and then restart negotiations with a debt default looming in the background. They figure that although Obama really is willing to let the country go over the cliff, he's not willing to let the country default and spark a global financial crisis. They are willing to do that, or they believe they can more credibly say they are, and that gives them leverage.
This increasingly influential theory is weakening Boehner's hand, as it's giving House Republicans who don't want to cut a deal a way to argue that they just need to stand firm now and they'll get a better deal later. Increasingly, there's concern among Democrats that Boehner will cut a deal that he can't deliver the votes for. Or that, at the last minute, he'll back off of a deal because he won't have the votes. That happened in 2011, when, the White House feels, Boehner cut off the negotiations over the debt ceiling after finding he didn't have the votes to pass the deal.
Whatever House Republicans might think, the White House is all steel when it comes to the debt ceiling. Their position is simple, and it's typically delivered in the tone of voice that Bruce Willis reserves for talking to terrorists: They're happy to raise the debt ceiling on their own, as would be the case under their proposal to take authority for the debt ceiling away from Congress. But if Congress rejects that offer, then the debt ceiling is Congress's problem, and the White House will not help.
The Obama administration is utterly steadfast on this point: They will not suffer a repeat of 2011, when they conducted negotiations over whether the United States should default. If Republicans go over the cliff and try to open up talks for raising the debt ceiling, the White House will not hold a meeting, they will not return a phone call, they will not look at the e-mails. They will move to an entirely public strategy, rallying voters and the business community against the GOP's repeated brinksmanship. Recall Obama's speech to the Business Roundtable last week:
I want to send a very clear message to people here: We are not going to play that game next year. If Congress in any way suggests that they’re going to tie negotiations to debt ceiling votes and take us to the brink of default once again as part of a budget negotiation -- which, by the way, we had never done in our history until we did it last year -- I will not play that game. Because we've got to break that habit before it starts.
They're almost religious about this: They believe they owe it to future generations to break the back of the idea that minority parties can and should play Russian roulette with the economy.
But even if it doesn't come to that, the nation's borrowing limit remains a problem in the ongoing negotiations. For the same reason the White House doesn't want to negotiate over the debt ceiling in 2013, they don't want to see it return in 2014, or even 2015. They want the bomb defused, not delayed. And so they're insisting on a long-term fix in any deal, proposing to, in effect, take responsibility for raising the debt ceiling away from Congress and hand it over to the president. Their proposal is clear: It functionally eliminates the debt ceiling forever. The White House does not believe that lifting the debt ceiling for a year, or even two years, is a reasonable compromise against "forever."
Boehner and the Republicans don't want to give up the leverage of the debt ceiling forever, or for 10 years, or even, as John Engler, head of the Business Roundtable and a former Republican governor suggested, for five years. But the White House isn't very interested in compromising on this issue, as they figure that if there needs to be a final showdown over the debt ceiling, it's better to do it now, when they're at peak strength, then delay it till 2014 or 2015, when their own vantage might have ebbed.