Dems Grapple With Renewed GOP Debt Limit Threats

TPM

House Republicans are privately contemplating a quiet surrender in the fight over Bush tax rates for top earners, and a quick pivot to a new fight over raising the debt limit, in which they'd demand steep cuts to programs like Medicare and Social Security.

The White House's official position on this plan is: cram it. Officials say they will not negotiate, or pay a ransom. Congress has to raise the debt limit, period.

"I will not play that game," Obama told the Business Roundtable on Wednesday. "We are not going to play that game next year. We've got to break that habit before it starts."

But privately, Obama and Democratic leaders have sought to weave a debt limit increase into ongoing negotiations to avert automatic tax increases and spending cuts at the end of the year. Their clear preference is to defuse that bomb now, in a bipartisan way, rather than to stare down the House GOP pointing a gun at the country's economy.

And recent remarks by Democratic leaders and interviews with top congressional aides suggest Democrats have no consensus plan to execute if the debt ceiling isn't increased before the end of the year.

House Minority Leader Nancy Pelosi (D-CA) and other Dem leaders say that once the long fight over Bush tax cuts for the rich is resolved, the playing field will be evened, and the parties can negotiate further deficit reduction next year.

"If we can take the middle-income tax cuts off the table, then we end the hostage taking that the Republicans have been engaged in," Pelosi said at a Wednesday media availability when asked about the Democrats' debt limit contingency plan. "We're not going to do that unless you give tax cuts to the wealthy. I think that clears the debate to find areas of agreement as we go forward.

Her No.2, Steny Hoyer (D-MD), simply argued against using the debt limit for political leverage, without saying if or how Democrats could prevent Republicans from taking that tack.

"The debt limit ought not to be held hostage to anything," Hoyer said. "It hurt our economy, we were downgraded for the first time in my career and I think in history by one of the rating agencies. The creditworthiness of America ought not to be put at risk, it ought not to be a negotiating item."

Neither of those responses constitutes an answer to the GOP's ongoing demand that new borrowing authority be matched dollar for dollar with cuts to federal spending.

One top Democratic aide ceded that party leaders involved in negotiations are more focused on the near-term goal of winning the tax fight than on how they'd address a new debt limit showdown if they can't get it increased before the end of the year.

Another said they'll stand with the White House and simply refuse to negotiate on GOP terms. The public's already on the Democrats' side in a relatively narrow tax fight, the aide said, "why would the American people look more favorably on the prospect of total economic collapse than they would on the prospect of a tax hike on the middle class?"

Boehner may have no votes to raise the debt ceiling without concomitant budget cuts, but "that's not our problem," the aide said.

Sen. Chuck Schumer (D-NY) echoed this assessment, more gently, at a Wednesday press availability.

"I think they learned their lesson with the debt ceiling," he told reporters. "I don't think it's leverage for them at all. The whole thing turned around when it looked like they'd be willing to let the United States forego its payment of debt in 2011. The whole thing turned around and we began to get the upper hand. I think they've learned that mistake, and any talk that that is leverage for them I think is false."

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