Politics Winning Out Over Pragmatism in Debt Limit Fight

Republicans are stuck on a political hamster wheel—they are running really fast and getting nowhere.

On Thursday, Republicans coalesced around a deal to grant a six-week extension of the debt ceiling in order to avoid any turmoil in the bond market, keep the United States credit rating secure, and give them more time to work on a deal. This represented a huge tonal shift for Republicans, who previously opposed any increase in the debt limit that did not come with significant deficit reduction or fiscal reforms. The idea, as Rep. Paul Ryan explained in an influential op-ed, was to create a space where legitimate talks could happen:

We should also enact pro-growth reforms that put people back to work—like opening up America’s vast energy reserves to development. There is even some agreement on taxes across the aisle.

This isn’t a grand bargain. For that, we need a complete rethinking of government’s approach to helping the most vulnerable, and a complete rethinking of government’s approach to health care. But right now, we need to find common ground. We need to open the federal government. We need to pay our bills today—and make sure we can pay our bills tomorrow. So let’s negotiate an agreement to make modest reforms to entitlement programs and the tax code.

The plan seemed well on its way to passage. CNN’s had “there may be a way out,” splashed across their homepage, White House Press Secretary Jay Carney said Obama would sign a debt-ceiling hike, even if it didn’t reopen the government, and the Dow closed up 300 point on the day. And then the unthinkable happened. Obama balked. The New York Times reports:

“President Obama today rejected a proposal from politically besieged House Republican leaders to extend the nation’s borrowing authority for six weeks because it would not also reopen the government.”

So the Republicans did a 180-degree turn to find common ground with the White House and then the White House did a 180-degree turn to thwart them? What could have happened?

Something tells me Senate Majority Leader Harry Reid, who has consistently urged the White House not to negotiate with Republicans, put a bug in Obama’s ear…again. After emerging from the two-hour meeting with President Obama and congressional Republicans, he told reporters that the Senate Democrats would not negotiate with the house until the Continuing Resolution was dealt with. “Not going to happen,” Reid said.

Reid’s absolutist tone stood in stark contrast to House Speaker John Boehner, tho told reporters, “I would hope that the president will look at this as an opportunity and a good faith effort on our part to move halfway – halfway to what he’s demanded – in order to have these conversations begin.”

It’s clear that Reid feels he has Republicans on the run. His obstinate refusal to negotiate in good faith has pushed the GOP to make offer after offer in hopes of breaking the impasse. Now, Reid is attempting to convince the White House that the longer they push America towards a government shutdown, the less they’ll have to give up in any deal with Republicans. In other words, Democrats, with Obama at the helm, continue refusing to negotiate in good faith.

This high stakes game of chicken appears to have sadly been Democrats’ strategy all along. They have viewed each and every action through a political lens: will the GOP get saddled with the blame, will confusion in the markets force Republicans to deal, will fixing Obamacare be viewed as a concession that the law is broken, etc. Republicans on the other hand are just doing their best, almost regardless of the political consequences, to simply put the United States on the path toward a sustainable future.

Unfortunately, in the Washington hamster wheel, politics is winning out over pragmatism.