Negotiating Over The Debt Ceiling Is Not Unprecedented

Contrary to the White House's arguments, negotiating over the debt ceiling is not at all historically unprecedented.

Debt Ceiling

President Obama and the Democrats are maintaining their apparently uncompromising “no negotiations” strategy with respect to the twin fiscal crisis that the nation is now dealing with, insisting that it is up to Republicans to put forward clean bills to open the government and raise the debt ceiling before engaging in negotiations on any other issue. More than once, the President himself, his spokespeople, and various members of the House and Senate have stated that it is unprecedented for talks about raising the debt ceiling to be debt to unrelated, extraneous issues such as some of those that Republicans are rumored to be including as part of their debt ceiling proposal. Among those proposals are rumored to be matters such as the PPACA’s medical device tax, entitlement reform, the Keystone XL pipeline, and tax reform. As it turns out, though, these kinds of negotiations over the debt ceiling aren’t nearly as unprecedented as you might think:

While the White House vows it doesn’t want to set a precedent negotiating policy proposals to be included in a debt ceiling increase — calling it extortion – there have been discussions in the past surrounding such a hike and Congress has attached other issues to raising the limit a number of times.

The House and Senate, in November 1989, agreed as part of a debt ceiling increase to repeal a tax rule approved three years earlier barring discrimination in employer-paid health insurance plans.

After threats of default and many meetings between President Barack Obama and congressional leaders in August 2011, an increase in the debt ceiling in three stages was included in the Budget Control Act.

That law imposed automatic spending reductions known as sequester, established a joint committee on deficit reduction, and required a vote on a balanced-budget amendment.

There also were votes in the 1970s and 1980s on the debt limit, which included requirements for a balanced budget vote, a cigarette tax and the push for an alternative minimum tax.

“Listen, the debt limit is right around the corner. The president is saying, ‘I won’t negotiate. I won’t have a conversation’ even though President (Ronald) Reagan negotiated with Democrats who controlled the Congress back then, even though President George Herbert Walker Bush had a conversation about raising the debt limit.

“During the Clinton administration, there were three fights over the debt limit,” House Speaker Rep. John Boehner (R-Ohio) told ABC News on Sunday. “I don’t want the United States to default on its debt. But I’m not going to raise the debt limit without a serious conversation about dealing with problems that are driving the debt up. It would be irresponsible of me to do this.”

The White House says, unlike previous occasions, this time there are preconditions set by the Republicans attached to any debt ceiling hike.

(…)

Kevin Hassett and Abby McCloskey of the American Enterprise Institute last week wrote in a column for the Wall Street Journal 60% of debt limit increases that included other legislative items came in Democratic Congresses while 15% came in Republican-led ones and the remaining 25% were in divided ones.

“Debt-limit votes have provided a regular vehicle for legislation. Divided governments have a difficult time passing anything. Since the consequences of government default are so severe, debt-limit legislation has always passed in the end, and it has often included important additional legislative accomplishments,” the pair wrote.

In other words, for better or for worse, the debt ceiling has been used as the field upon which other legislative battles have been fought. So, to argue that it would be without precedent to do so today just doesn’t stand up to an examination of history. Moreover, it largely puts to bed the argument that the White House has making that conceding the idea of even opening talks regarding the debt ceiling would set a bad precedent for future Presidents given the fact that the same thing has already happened in the past and, as long as we have a debt ceiling law, will continue to happen in the future.

None of this is to argue against the proposition that things have been different this time around. To a large degree, whether you’re talking about the government shutdown or the debt ceiling, some of the Republican demands have been wildly unrealistic. There are not going to be any large scale changes to the Affordable Care Act, and the program is not going to be delayed. Any Republican going into negotiations thinking that any of those items has even the slightest chance of succeeding was, quite honestly, deluding themselves. That doesn’t mean, however, that there aren’t other items that couldn’t properly be the subject of negotiations regarding the twin issues of the shutdown and the debt ceiling. At the same time, though, insisting that there will be no negotiations and acting as if negotiating would be some kind of historically unprecedented act is simply not supported by the facts. The closer we get to the Treasury Department’s “drop dead” date, the less credible that position is going to become.

FILED UNDER: Barack Obama, Congress, Deficit and Debt, Politicians, US Politics,
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. john personna says:

    So Doug, we’ve repeatedly called the “clean CR” a fair compromise and offer.

    You pick up the meme that “Obama won’t compromise,” but to make that serious, adult, and rational, don’t you have to explain why the clean CR is flawed? Is not a compromise?

  2. Rob in CT says:

    Well first off 2011 happened, so it’s not unprecedented anymore.

    The House and Senate, in November 1989, agreed as part of a debt ceiling increase to repeal a tax rule approved three years earlier barring discrimination in employer-paid health insurance plans.

    I think we need a play-by-play recap of that to judge it in comparison to the 2011 and present-day events.

    There also were votes in the 1970s and 1980s on the debt limit, which included requirements for a balanced budget vote, a cigarette tax and the push for an alternative minimum tax.

    Same thing.

  3. Moosebreath says:

    @Rob in CT:

    “I think we need a play-by-play recap of that to judge it in comparison to the 2011 and present-day events.”

    Right. There’s a big difference between negotiations over another issue, and an increase to the debt ceiling thrown in, rather than negotiations over the cebt ceiling, and other issues thrown in.

  4. john personna says:

    I think The American Conservative is doing a better job on this than OTB:

    Bill Kristol’s advice to the GOP today is a good example of how Republicans are routinely misinformed by their own pundits:

    To state the obvious, Republicans don’t have a “hand” good enough to win or draw. Being calm or panicking is irrelevant here. The question isn’t whether Republicans are going to lose a standoff they should never have attempted, but how quickly they can minimize the damage they are doing to themselves and to the country. Urging the GOP to “stand pat” in the hope of a “victory” that isn’t forthcoming is to encourage Republicans to maximize the harm they do to themselves and to the U.S.. It is mindless dead-ender advice that ought to be ignored, but because it flatters Republican politicians and tells them what they want to hear it will probably be taken seriously.

    I think you might be doing what Larison suggests there, Doug.

    You are pumping up the conservative position, when pumping it up does them no good. It reinforces their doomsday plan.

  5. John,

    When there is a clear political impasse the only option left to the parties is to sit down and try to hash out their differences. Expecting one or the other side to “blink” first as if this were some gigantic game of chicken doesn’t strike me as realistic. The fact that one party thinks the other party is being unreasonable isn’t at all uncommon in negotiations, but it’s not an excuse not to negotiate at all in my opinion, even if it happens to be true.

  6. al-Ameda says:

    Yes, we know that the Debt Limit has in the past been used for what used to be known as “normal” political maneuvering, but certainly, not taken to the extreme as it is now.

    Some related questions come to mind. In using the Debt Limit for political purposes, did congressional Democrats:

    (1) Ever threaten, plan for, and carry out a shutdown of the federal government?
    (2) If so, did they demand the repeal or defunding of a law passed by a Republican majority?
    (3) Did they ever use political leverage to cause a down grade in the rating of Federal debt securities (see 2011).

    I don’t recall such political bad behavior on the part of Democrats.

  7. john personna says:

    @Doug Mataconis:

    I think there is a reason you did not answer my direct question.

    You know the clean CR is a fair compromise.

    You are now part of the meme engine ignoring that, or worse hiding it from your readers,.

  8. Rob in CT says:
  9. john personna says:

    (Americans want “compromise,” and it would be easy to give it to them. It is right there on the table. The one thing stopping the House from voting on a straight-up, neutral, down-the-middle compromise is Republican parliamentary games.)

  10. J-Dub says:

    President Obama should tell Speaker Boehner that in order for him to sign a debt ceiling increase it needs to include immigration reform, an assault rifle ban, increased funding for Headstart programs and and increase in funding for research grants. Then start the negotiation, at which point the Democrats will give up everything they want and so will the Republicans and we’ll end up with a clean debt ceiling increase.

  11. john personna says:

    @J-Dub:

    If we take Doug at face value, that’s the kind of “negotiation” he’d like to start, with government in shutdown and default looming, yes.

  12. Ron Beasley says:

    Obama has finally figured out you can’t negotiate with a group of crazies that refuse to negotiate. You can’t even negotiate with Boehner because he doesn’t have the power to deliver. What we are seeing here is The Civil War Part II. The business community is upset with the Frankenstein monster they helped create.

  13. @john personna:

    I’ve said repeatedly that the House should just pass the clean CR, which only authorizes spending through December 15th (or November 15th under the Senate version) but, of course, my opinion is only tangentially relevant to what’s going on in Washington right now since I don’t have a vote on either the House or Senate floor.

  14. Scott says:

    The question is not whether the debt ceiling as negotiated over in the past but rather, is it a good idea to use it now? The past does not necessarily justify the present.

    As for “hashing out the differences” that implies give and take. I understand what the Republicans are asking for but I don’t know what they are offering.

  15. ChrisB says:

    Here’s Dave Weigel, inveterate liberal, on why the current debate is unprecedented: http://www.slate.com/blogs/weigel/2013/09/30/no_democrats_never_really_held_the_debt_limit_hostage.html

    The other point is that these aren’t negotiations. For there to be negotiations, both sides have to give up something they want, and “don’t create a global catastrophe” isn’t a concession.

  16. J-Dub says:

    @Scott: They are offering not to shoot the hostage.

  17. al-Ameda says:

    @Doug Mataconis:

    but, of course, my opinion is only tangentially relevant to what’s going on in Washington right now since I don’t have a vote on either the House or Senate floor.

    Of course your opinion matters. You moderate and post/publish opinion pieces to a prominent political affairs blog, and presumably you voted for a House Representative and a Senator, both of whom are staking out positions either in support of, or in opposition to, this ongoing extremist activity.

  18. Rob in CT says:

    This tickled me, ’cause I love me some Eddie Izzard:

    http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/08/cake-or-debt-ceiling/

    Tea and Cake or Death! [students with beards] Tea and Cake or Death! Tea and Cake or Death! Little Red Cookbook, Little Red Cookbook…

    I’m going to giggle in over here in the corner for a bit…

  19. David M says:

    Negotiating over the debt ceiling may not be unprecedented, but the current issue is extortion, not negotiation.

  20. rudderpedals says:

    When you’re holding a stinker and pretty much know he’s going to get crucified at trial a savvy client is going to follow counsel’s advice and settle; Doug’s advice and sales pitch for the GOP is on target, in isolation.

    Thing is, your “client” has been negotiating in bad faith, lacks settlement authority, and has a history of breaking settlements so we’ll see you in court.

  21. john personna says:

    @rudderpedals:

    I think a good lawyer will look at the quality of the offer, and not the theatrics surrounding it.

    The clean CR is a good offer.

    He advises the Republicans to take it, which is good, but he seems a little fond of their theatrics as well.

    He should not waste one minute on “Obama won’t compromise” with a good offer on the table.

  22. Todd says:

    Previous negotiations were about what could be attached to what was viewed as “must pass” legislation. Nobody had any doubt the debt ceiling would be raised. 2011 was the first time that demands were attached to legitimate threat that the ceiling might not be rasied.

    It’s comparing apples to oranges.

  23. Console says:

    In what imaginary world can Boehner get his caucus to agree to a deal that doesn’t include obamacare? Don’t substitute your grand bargain fantasies for reality.

  24. David M says:

    Scenario 1: Hey, we have to raise the debt ceiling, how about I get ‘X’ and you get ‘Y’ at the same time.

    Scenario 2: I’m not going to raise the debt ceiling if I don’t get ‘X’.

    In what world are those even similar? The debt ceiling is simply another part of government that the GOP / Tea Party was willing to break.

  25. Ben says:

    @David M:

    Scenario 1: Hey, we have to raise the debt ceiling, how about I get ‘X’ and you get ‘Y’ at the same time.

    Scenario 2: I’m not going to raise the debt ceiling if I don’t get ‘X’.

    In what world are those even similar? The debt ceiling is simply another part of government that the GOP / Tea Party was willing to break.

    Nailed it.

  26. James Pearce says:

    Any Republican going into negotiations thinking that any of those items has even the slightest chance of succeeding was, quite honestly, deluding themselves. That doesn’t mean, however, that there aren’t other items that couldn’t properly be the subject of negotiations regarding the twin issues of the shutdown and the debt ceiling.

    What are these “other items” the Republicans are willing to discuss? I mean, in theory, yes, there are other items, if proposed, that the two sides can negotiate on.

    But the Republicans are not asking for those things.

  27. grumpy realist says:

    OK, let’s not raise the debt ceiling. We’ll raise taxes to pay for everything instead.

    Somehow I don’t think the Republicans will be very happy with that, either….

  28. dazedandconfused says:

    Look at “negotiations” from this perspective: Obama opens by demanding a large tax increase on the wealthy or he will crash the economy.

    Obama may have decided it’s time to stop playing games with the debt ceiling. It’s being abused now, and it’s very unwise to reward playing with dynamite. The majority on the House should not come to view the debt ceiling as if it were Xmas and they are entitled to a “gift” (concession) every time it comes around. If precedent is important, then this needs to be nipped in the bud.

  29. Rafer Janders says:

    @Doug Mataconis:

    The fact that one party thinks the other party is being unreasonable isn’t at all uncommon in negotiations, but it’s not an excuse not to negotiate at all in my opinion, even if it happens to be true. – See more at: https://www.outsidethebeltway.com/negotiating-over-the-debt-ceiling-is-not-unprecedented/#sthash.uyjK5pCU.dpuf

    As someone who’s been involved in hundreds and hundreds of business negotiations, sure it is. If the counterparty is sufficiently unreasonable you cease negotiations until they get ahold of themselves. You certainly don’t go on negotiating with a nut, a charlatan or a hostage taker.

  30. Rafer Janders says:

    @J-Dub:

    They are offering not to shoot the hostage.

    See?! That’s something! Who says the Republicans aren’t willing to be flexible?!?!

  31. David M says:

    @Doug Mataconis:

    When there is a clear political impasse the only option left to the parties is to sit down and try to hash out their differences. Expecting one or the other side to “blink” first as if this were some gigantic game of chicken doesn’t strike me as realistic. The fact that one party thinks the other party is being unreasonable isn’t at all uncommon in negotiations, but it’s not an excuse not to negotiate at all in my opinion, even if it happens to be true.

    That doesn’t fully address the Democratic viewpoint, that being repeatedly extorted and still defaulting at some point is worse than defaulting now. The GOP will keep extorting policy concessions that the Democrats view as harmful, but that only delays the default, as eventually things will go wrong with that plan and the GOP will shoot the hostage. Ending the extortion now is the reasonable, responsible course of action for the Democrats, which is why there is such unity over the plan.

  32. sam says:

    With whom is the president supposed to negotiate? The speaker or Steve King, Michelle Bachman, et al.?

  33. rob says:

    “Negotiating Over The Debt Ceiling Has Precedent”

    FIFY