Ezra Klein had this sobering piece yesterday after President Obama’s press conference:
The best advice I’ve gotten for assessing the debt-ceiling negotiations was to “watch for the day when the White House goes public.” As long as the Obama administration was refusing to attack Republicans publicly, my source said, they believed they could cut a deal. And that held true. They were quiet when the negotiations were going on. They were restrained after Eric Cantor and Jon Kyl walked out last week. Press Secretary Jay Carney simply said, “We are confident that we can continue to seek common ground and that we will achieve a balanced approach to deficit reduction.” But today they went public. The negotiations have failed.
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The conventional wisdom is that now this fight moves to the people. I’d put it differently. Now this fight moves to the consequences. Neither side is going to give in the face of purely rhetorical salvos. The White House is expecting Republicans to accuse them of wanting to raise taxes. The Republicans are expecting the White House to accuse them of putting the interests of large corporations and wealthy donors in front of the needs of seniors, children and the poor. Both parties have seen the poll numbers behind their positions. If a few news conferences were going to be sufficient to end this, it would never have started.
What the two parties are really doing is trying to position themselves politically to survive the consequences of their failure. We don’t yet know if we’ll get to the point where the market will panic, but it could. We’re very likely to get to the point where we have to stop funding certain government services, which could mean as little as delaying payments to military contractors and hospitals or as much as halting Social Security checks. Either way, the public is likely to ignore the political breakdown until the consequences begin. At that point, both parties are hoping they will have framed the debate such that the electorate’s fury falls squarely on the other’s shoulders. That’s what today’s news conference was about.
The administration thinks it can win this fight and they do have several advantages.
- Framing – There were several good frames advanced by Obama yesterday, like a do-nothing Congress, Obama as the adult and Republicans as the party of corporate jets. The administration must like their chances here and taxing the rich and ending loopholes polls very well. Of course, Republicans have argued that taxes are evil successfully for 30 years, so they fell pretty good about their chances as well.
- Tax cut expiration from the 2010 tax deal. Republicans are at a disadvantage here because they have nothing to offer. They know that the tax cuts will expire in 2012 and Obama has the upper hand. He’s already stated that he won’t sign a full renewal of the tax cuts. Obama merely has to wait to get what he wants and there is nothing Republicans can do to stop it.
- The 14th Amendment argument declaring the debt ceiling unconstitutional. This argument has been advanced by Chris Coons and other Democrats.
“The validity of the public debt of the United States, authorized by law… shall not be questioned,” reads the 14th Amendment.
“This is an issue that’s been raised in some private debate between senators as to whether in fact we can default, or whether that provision of the Constitution can be held up as preventing default,” Sen. Chris Coons (D-Del.), an attorney, told The Huffington Post Tuesday. “I don’t think, as of a couple weeks ago, when this was first raised, it was seen as a pressing option. But I’ll tell you that it’s going to get a pretty strong second look as a way of saying, ‘Is there some way to save us from ourselves?'”
By declaring the debt ceiling unconstitutional, the White House could continue to meet its financial obligations, leaving Tea Party-backed Republicans in the difficult position of arguing against the plain wording of the Constitution. Bipartisan negotiators are debating the size of the cuts, now in the trillions, that will come along with raising the debt ceiling.
I assume this would be an option of last resort but having it ready has to put Republicans on the defensive. Many think that even if Republicans objected, they wouldn’t have standing in court to sue since they can’t prove a harm. Only hedge funds hedging on America to default would have the standing to sue (and Eric Cantor, I guess).