A Big Debt Limit Blunder?

December 17, 2012 12:39 p.m.

Setting aside arguments about the policy substance underlying the fiscal cliff negotiations (and there’s obviously plenty to argue about), what puzzles me most is the idea that President Obama might shake hands on a deal that raises the debt limit enough to put off another big fight with House Republicans for about a year.It’s easy to see how Obama and John Boehner might reach that compromise. Conservatives want to have that fight with Obama as soon as possible, early next year. Obama wants the debt limit removed from the realm of legislative politics forever (or, if we’re being cynical, at least until his second term is over). The “compromise” between those two positions is somewhere between three months and four years. And one year allows Boehner to claim that the fiscal cliff deal satisfies the “Boehner rule,” pairing new borrowing authority with concomitant budget cuts.

But strategically, it’s hard to identify any upside for Obama here.

Since the GOP has clearly not lost its appetite for playing chicken with the country’s creditworthiness, vesting the power to raise the debt limit within the executive branch would be a great step for the country. But failing that, the thing for Obama to do is stare Boehner down — refuse to enter negotiations with him, make him grapple with the unsustainable nature of his threat, and force him to raise the debt limit cleanly. As Obama put it, “break that habit before it starts.”

But the time to do that is sooner, rather than later. If Boehner drops his debt limit demands going forward, fine. But if Obama’s going to have to call Boehner’s bluff no matter what, at great peril to the economy, better now, with the election fresh in everyone’s mind, when public opinion is on his side, when he’s more popular than he’s been in four years, when Harry Reid has signaled he has the votes to raise the debt limit with 51 Democratic votes.

Put the fight off for a year, and there’s no guarantee that any of those conditions will still exist. We’ll be a year out from mid-term elections, and Democrats probably won’t be as steeled for a major confrontation as they are right now.

Everything else leaking out of the talks isn’t all that surprising, given Obama and Boehner’s known predilections, and the tilt of the scale in the negotiations. But I find this part of it pretty baffling.

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