"FLASHBACK: In February, Geithner Rightly Warned Against Negotiating Over Raising The Debt Ceiling"
For months, Republicans have refused to budge when it comes to negotiations over raising the nation’s debt ceiling, rejecting various generous concessions in return for a simple vote to ensure that the country pays its bills. Now, with default only days away, Republicans have dug in, insisting that acceptance of their radical “cut, cap, and balance” plan is the only way forward.
The Obama administration and the Democrats have offered the GOP deal after deal, saying that they are willing to cut everything from Social Security to Medicare in order to secure a debt ceiling increase, even though the debt ceiling is typically raised as a matter of protocol without controversy. But Republicans, sensing that they could wring more concessions from the Democrats and eager to placate their Tea Party base, have refused to say “yes.”
As the Los Angeles Times details, the administration was well aware that negotiating over the debt ceiling could lead to an ugly place. In fact, back in February, Treasury Secretary Tim Geithner explicitly warned against engaging in negotiations over the debt ceiling at all, because “if you let people negotiate over the terms, the risk is you leave people with expectations you can’t meet”:
For months, the administration’s position seemed to be that the debt limit should be raised with no conditions. In Washington-speak, that’s known as a “clean” increase.
In February, Geithner spoke at a House Budget Committee hearing and said, “You know, this is not a popular thing for people to do, and if you let people negotiate over the terms, the risk is you leave people with expectations you can’t meet. And it is just that that suggestion leads us to suggest you should do it clean.”
But two months later, Obama told a reporter that lifting the debt ceiling was “not going to happen without some spending cuts.” Later in the month, White House Chief of Staff William Daley said something similar: “Nobody thinks there will be a clean debt ceiling extension vote. There probably shouldn’t be, without some changes in spending. The budget deficit is a real thing that has to be addressed.”
Rep. Peter Welch (D-VT), who introduced a clean debt ceiling increase, “said he got a phone call from Geithner commending him for pushing for an increase in the debt ceiling not tied to anything else.” According to reports, Geithner’s preferred strategic approach was ultimately rejected by others in the administration because it was deemed to be a course that couldn’t muster the votes. (Ironically, the preferred approach adopted by the administration also wasn’t able to generate support.)
Now, a clean debt ceiling increase seems to be inexplicably off the table, even though the leadership of both parties agree that the debt ceiling needs to go up if the nation is to avert an unprecedented and potentially catastrophic economic mess. Because default truly would be disastrous, and because a negotiated compromise seems increasingly out of reach within the Aug. 2 deadline, a clean vote for an increase would be the responsible course at this late hour.