"Boehner’s Opening Bid On the Debt Limit"
John Boehner’s office released a statement on the debt ceiling issue:
I’ve been notified that the Obama Administration intends to formally request an increase in the debt limit. The American people will not stand for such an increase unless it is accompanied by meaningful action by the President and Congress to cut spending and end the job-killing spending binge in Washington. While America cannot default on its debt, we also cannot continue to borrow recklessly, dig ourselves deeper into this hole, and mortgage the future of our children and grandchildren. Spending cuts – and reforming a broken budget process – are top priorities for the American people and for the new majority in the House this year, and it is essential that the President and Democrats in Congress work with us in that effort.
I think the smart play for the President here is to absolutely refuse to engage. Say the Treasury will hit the ceiling in mid-March and be unable to roll over the national debt in the normal way unless the limit is raised. The President has asked Congress to approve an increase in the debt limit and he thinks that’s the best resolution of the situation. If Congress fails to act on time, Treasury has at its disposal an array of debt-juggling methods of various degrees of legality and Secretary Geithner and his team will try their best to avoid defaulting. If John Boehner wants, as a separate matter, to try to work on a credible deficit reduction plan that can pass the senate, then good for him and that’s something that should be discussed separately.
The default presumption under divided government is simply that things won’t change. But there are a number of bumps on the road (debt ceiling, annual appropriations, “doc fix”) where unless some affirmative action is taken, something very undesirable takes place. It’s important to get ahead of the curve in defining the contours of these issues. To engage in any kind of back-and-forth with the Speaker about the debt limit is a way of construing the issue as if avoiding default requires joint action. But it doesn’t. The White House has already taken sufficient action to avoid the bad outcome, and now the question is whether the Congress will do so as well. If they don’t, that’s bad, but it’s also on them.