The Debt Ceiling Battle Was Lost Last December

Yesterday, Jonathan Bernstein wrote a post titled The context of liberal surrender and Barack Obama’s choices:

It was never at all plausible after November 2, 2010 that Obama and the Democrats could get through this year and next without losing on several fronts compared to what they had in the very liberal 111th Congress. And yet liberals seemed to believe that if only Obama negotiated properly he could avoid those losses. It just wasn’t going to happen. So the proper way to see the current negotiations are in the context of watching both sides surrender.

I'm not seeing how agreeing to an all spending cuts deal constitutes surrender by the Republicans. Will it be all they asked for? No. But being effective negotiators, Republicans knew to ask for pie in the sky, and then just settle for pie on the ground. They can get the sky on the next go around.

But the more interesting aspect to Bernstein's analysis is his failure to connect the December deal to extend the Bush tax cuts to the current debt ceiling deal (and the coming budget negotiations.) When the President surrendered on the Bush tax cuts, he lost almost all of his bargaining leverage. (Indeed, the only leverage Democrats have now is that a substantial number of Republicans do not want to vote for a debt ceiling increase under any circumstances, thus Dem votes will be required.) When some of us were explaining this in December, others were arguing The December Deal was a victory. Here is a post where I discuss Yglesias making that claim:

Yglesias thinks that progressive objections to the Bush tax cuts are based on concern for the short term deficit. Dead wrong. The concern is that extending the Bush tax cuts will lead to cuts in REAL effective stimulus - government spending. This is the "starve the beast" Norquist strategy. Pete Peterson is not going away. He was just quiet about TAX CUTS. When it comes time to cut spending, Pete Peterson will be back.

Yes, now President Obama and Democrats have to accept a bad bargain to raise the debt ceiling. But if they had negotiated better last December, they could have made a better bargain then. They didn't. The Deal was a terrible mistake. And 7 months later, people like Bernstein want to forget how the bad deal in December is leading to the bad deal in July/August on the debt ceiling (and the one after that on the budget.)

It is taxes that Republicans care about. It is the one thing that animates the party. In December, President Obama had the biggest stick he is likely to have until after the 2012 elections. He gave it up without getting back what he needed.

It was terrible bargaining and everyone should have been able to see it. Apparently, not everyone did.

Speaking for me only

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  • Display: Sort:
    "Pie on the ground." Good one. (5.00 / 1) (#4)
    by oculus on Sat Jul 23, 2011 at 01:06:31 PM EST

    Thanks for noticing (5.00 / 1) (#12)
    by Big Tent Democrat on Sat Jul 23, 2011 at 02:49:45 PM EST
    I liked it too.

    I'm going to try and coin it.


    cow pie? (none / 0) (#17)
    by Faust on Sat Jul 23, 2011 at 03:42:30 PM EST

    and boots in the sky (none / 0) (#13)
    by The Addams Family on Sat Jul 23, 2011 at 03:06:33 PM EST
    as Obama & the Dems roll over for the GOP

    To the populace, in other words us, (none / 0) (#15)
    by jeffinalabama on Sat Jul 23, 2011 at 03:19:27 PM EST

     Bend Over, Here It Comes Again.


    heh (5.00 / 1) (#16)
    by The Addams Family on Sat Jul 23, 2011 at 03:35:18 PM EST
    Flo Kennedy, the late fabulous feminist and rabblerouser, used to use that one all the time

    When a system of oppression has become institutionalized it is unnecessary for individuals to be oppressive.
     --Florynce R. Kennedy

    His (5.00 / 2) (#8)
    by SOS on Sat Jul 23, 2011 at 02:10:12 PM EST
    colleagues in his own party, a most remarkable class of maundering chickensh*ts and grifters are not exactly helping either.

    Waiting to see... (5.00 / 1) (#14)
    by jeffinalabama on Sat Jul 23, 2011 at 03:18:17 PM EST
    not so much about the negotiations going on today, but whether, after Aug. 2, provided there's no decent agreement... in other words, an unlikely probability, given the negotiating stances and what could or could not be cut, instead of what should or should not...

    Does any advisor to the president have his ear enough to bring up, forcibly, the responsibilities of his office under the aegis of the 14th Amendment?

    Does he surround himself with cult-of-personality advisors? The other option leaves me more worried, that his advisors honestly believe in the cuts/promises he's trying for.

    I wish one domestic policy advisor would say, "They are playing brinksmanship. You have The Constitution on your side. Let them not agree, and then make a national TV prime time speech on invoking the 14th, how all debts will be paid, and, based on the 14th, certain economic policy changes must be made, as well as monetary.

    LEt him become the great explainer. USe charts and graphs. Use emotive photos from the 1929 Depresion.

    Usually begging forgiveness after doing something trumps asking permission.

    Jeff, your questions (5.00 / 1) (#25)
    by NYShooter on Sun Jul 24, 2011 at 03:00:43 AM EST
    would be appropriate if their goals were the same as ours, but they're not. However, you did hit very close to home, the advisers. Really, there is only one....Timmie Geithner. BTD has pointed him out as the main culprit many times, and I agree. We've all played  some fun amateur, psychologist games with Obama, but the hold Geithner seems to have on the President isn't fun, its very, very ominous.

    Now, I'm as guilty as anybody here in bragging about how I "saw it coming," even before the Primaries. But, I gotta admit, as cynical, and prescient, as I was, I never came close to predicting it would be this bad. But, in reflecting on why I got it so wrong, I came to a conclusion. It wasn't that I was so wrong then, but then was before Geithner had enough time to fully work on Obama's mind . While Obama was always predisposed to something like this, I believe it was that rotten-to-the-core, quisling, Geithner, that pushed him over the top into this monstrous, sadistic, mutation of a Democratic President.

    Now, having said that, here's how I think we got to this point. I, and many others, always believed Obama was never that much into actual governing. He likes the Grand Slam, the big dramatic show, the "Transactional" President! He was going to show them all: Lincoln, FDR, JFK, Reagan, Bill Clinton....all pikers; Obama was going to show them all.

    So, from the beginning, Obama kept trying his PP crap, his 11th dimensional bull, his being the "only adult" in the room. And, one by one, he kept failing. But there was Timmie in the background telling Obama, "just keep going Mr. President; the economy's gonna turn, and then you'll have'm right where you want'em. So Obama kept going....and going....and going, until he'd gone beyond the point of no return. There's no time left, he can't tell us, "oops, we made a mistake, let's start over." Timmie's trap has been sprung. It was that weasel's plan all along to lead Obama into a situation where Geithtner could finish what he had started. First, transfer Trillions to the money class, and now finish it off by destroying entitlements.

    I don't think this was Obama's plan from the beginning. But, now that he finds himself in this awful place, what's left for him to do? Of course, let's make lemonade out of Geithner's lemons....."The Grand Design!"

    Geithner told him, "Mr. President, you're going to take some heat now, but after we lop Trillions of dollars of "waste" from the budget, Wall Street will be so happy, the stock market will go to a million, front pages everywhere will proclaim, "the Economy's shooting to the moon, and you'll win re-election in a landslide.

    Hey, its as good a theory as any.


    Sounds nice but Obama ran (none / 0) (#26)
    by MO Blue on Sun Jul 24, 2011 at 06:33:08 AM EST
    on "fixing" the "entitlements." IMO he set up the perfect scenario to allow him to do so while providing himself with the cover that the Republicans forced him to do it.

    In fact in an interview at the time, he actually said that not including raising the debt ceiling in "The Deal" would allow him to do big things on the deficit during this process (paraphrase).  


    At yesterday's town hall in MD, Obama (none / 0) (#18)
    by Anne on Sat Jul 23, 2011 at 08:06:40 PM EST
    was apparently asked about this - and I'm sorry, but I don't have a link - and he responded that he had consulted with his attorneys and they didn't believe it was a viable option.

    Besides, he's too busy comparing his compromises on this issue with Lincoln's compromises on the emancipation of the slaves.


    You don't mean that ... (none / 0) (#19)
    by Yman on Sat Jul 23, 2011 at 09:34:11 PM EST
    Besides, he's too busy comparing his compromises on this issue with Lincoln's compromises on the emancipation of the slaves.

    ... literally, ... do you?



    literally, yes, literally (5.00 / 1) (#20)
    by MO Blue on Sat Jul 23, 2011 at 09:52:14 PM EST
    Sadly, I do... (5.00 / 1) (#21)
    by Anne on Sat Jul 23, 2011 at 10:24:37 PM EST
    In response to a question from a Montgomery County high school teacher who asked what she should tell her students about political compromise, Obama noted that Abraham Lincoln "constantly was making concessions and compromises." He pointed out that the Emancipation Proclamation carved out certain parts of the country where people could retain slaves.

    "Now, think about that. The 'great emancipator' was making a compromise in the Emancipation Proclamation because he thought it was necessary in terms of advancing the goals of preserving the Union and winning the war," he said.

    "So, you know what, if Abraham Lincoln could make some compromises as part of governance, then surely we can make some compromises when it comes to handling our budget."



    Now that the FAA is out of money b/4 (none / 0) (#22)
    by oculus on Sat Jul 23, 2011 at 11:24:03 PM EST
    Aug. 2, will the sleeping, intoxicated air traffic controllers be at their posts or not?

    At this point, (none / 0) (#1)
    by masslib on Sat Jul 23, 2011 at 12:37:09 PM EST
    Obama's focus should be on holding steady.  This isn't the time for grand bargains on the budget.  He's given up any position of strength by extending the Bush tax cuts, at the same time, Congress is held by lunatics.  Obama should never have admitted he would not exercise the 14th amendment.  At the very least, it would have given the illusion he had choices, even if it was just a bluff.

    Except Obama badly, badly WANTS that Grand (5.00 / 2) (#2)
    by jawbone on Sat Jul 23, 2011 at 12:50:36 PM EST
    Bargain to mark his place in history.  Not just the first black president, but he outdid Ronald Reagan in taking down the New Deal and the Great Society programs!

    Obama knew when he didn't include the debt ceiling in December that it was his next chance to go after SocSec and Medicare/Medicaid.

    He maneuvered things to this precipice: He wants to box in the Democrats more than he wants to force the Republicans to drop their demands.

    It's simple: Obama WANTS to hit/cut/slash (as far as he can go) SocSec/MM. The Republicans are not making him do this.  Obama may be scaring them.


    He sure scares ME. (5.00 / 1) (#3)
    by jawbone on Sat Jul 23, 2011 at 12:51:33 PM EST
    I think it's more like the unions' (5.00 / 1) (#11)
    by suzieg on Sat Jul 23, 2011 at 02:49:30 PM EST
    bosses who played the biggest role in making him not do this.

    While looking for petitions to sign on line to stop cuts to entitlements, I came across an article in The Nation which reports union leaders were speaking up in blunt opposition to any compromise by the president and the Democrats on the issue of preserving Medicare.


    Yes, looney and (5.00 / 1) (#5)
    by KeysDan on Sat Jul 23, 2011 at 01:46:35 PM EST
    unpatriotic.  Speaker Boehner did not wear an American flag pin in his lapel at his news conference yesterday.

    Is there a deal yet? (none / 0) (#6)
    by AngryBlackGuy on Sat Jul 23, 2011 at 01:49:34 PM EST

    Hmmmm. Maybe ABG doesn't (5.00 / 1) (#7)
    by oculus on Sat Jul 23, 2011 at 01:57:07 PM EST
    have direct access to WH?  

    LOL. (none / 0) (#9)
    by shoephone on Sat Jul 23, 2011 at 02:12:58 PM EST
    He did say he was having trouble (none / 0) (#10)
    by MO Blue on Sat Jul 23, 2011 at 02:21:26 PM EST
    with his old smart phone. Maybe the daily communication has been delayed due to technical problems. :o)

    "Is there a deal yet? " (none / 0) (#24)
    by NYShooter on Sun Jul 24, 2011 at 02:12:22 AM EST
    No, ABG....That's the good news.

    It just gets worse by the day (none / 0) (#23)
    by suzieg on Sat Jul 23, 2011 at 11:53:31 PM EST
    Note also, every must-pass vote ... (none / 0) (#27)
    by RonK Seattle on Sun Jul 24, 2011 at 10:38:56 AM EST
    ... is an arena for GOP extortion.

    Watch closely how Boehner plays his hand. He's not just negotiating for concessions. He's orchestrating an increase in the number of must-pass measures between now and 2013.

    I can't even blame (none / 0) (#28)
    by jeffinalabama on Sun Jul 24, 2011 at 03:39:55 PM EST
    the Imperious Curse for his actions... Fantasy is just that, fantasy.

    My younger brother says, "Between the election and inauguration, the REAL powers met with him and said, THIS is what we want. Good thing you agree. Even if you don't, you agree. This is just business."