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Obama's refusal to negotiate on debt ceiling: Smart or risky? (+video)

President Obama reiterated in a press conference Monday that he will not negotiate over the debt ceiling. But Republicans say they want dollar-for-dollar spending cuts, and some are willing to threaten default.

By Correspondent / January 14, 2013

President Obama gestures as he speaks in a press conference in the East Room of the White House in Washington, Monday.

Carolyn Kaster/AP


With the wacky trillion-dollar-platinum-coin idea now officially off the table, Washington is back to its never-ending game of chicken over the debt ceiling.

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Liz Marlantes covers politics for the Monitor and is a regular contributor to the Monitor's political blog, DC Decoder.

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President Obama has not budged from his stark line in the sand: When it comes to the debt ceiling, he will not negotiate. Period.

In a press conference Monday, he reiterated this position, stating: "Republicans in Congress have two choices here. They can act responsibly and pay America's bills. Or they can act irresponsibly and put America through another economic crisis. But they will not collect a ransom in exchange for not crashing the American economy." 

Mr. Obama made clear – as he did during the 2011 debt-ceiling crisis – that raising the debt ceiling "does not authorize more spending; it simply allows the country to pay for spending that Congress has already committed to." The difference this time around, however, is that while Obama says he's ready to have a "vigorous debate" on debt reduction, he also says that debate must be separate from Congress taking action on the debt ceiling. And if Republicans decide to block such an action, the consequences will be all on them.

The problem, of course, is that Republicans are taking an equally firm stand. House Speaker John Boehner has vowed to raise the debt ceiling – which could hit its limit as early as mid-February – only if he gets dollar-for-dollar spending cuts. Mr. Boehner reiterated this position in a statement released after the president's press conference, which read: “The American people do not support raising the debt ceiling without reducing government spending at the same time. The consequences of failing to increase the debt ceiling are real, but so too are the consequences of allowing our spending problem to go unresolved.”

No one knows how this crisis will unfold, of course, but here's our best guess: Republicans will eventually blink. 

In fact, we believe Obama pretty much secured this outcome from the moment he declared that he simply would not negotiate on the matter.

True, it's a potentially risky position to take – since, if Republicans don't back down, the president will either have to go back on his pledge or allow what he himself has described as a catastrophic economic event to take place.

And it is, of course, a far less conciliatory approach than the one the president took back in 2011. That time around, Obama was already in the middle of a tough reelection campaign, and the economy was more fragile. He couldn't risk even appearing willing to risk a default. As a result, Obama and Boehner spent months trying to work out a "grand bargain" on deficit reduction, which ultimately imploded.

But the president has clearly learned some lessons from the whole ugly episode – which resulted in a credit downgrade for the United States – and the follow-up "fiscal cliff" negotiations that took place last month. One is that a grand bargain may simply be impossible right now, given the divisions between the parties. While that doesn't mean those negotiations should be shelved, it doesn't necessarily make sense to keep tying them to economic deadlines that create crises.


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