While we understand all too well what Republican officials are thinking in the debt-ceiling fight, there’s been considerable discussion of late about President Obama’s approach. Most notably, many on the left have a very hard time grasping why in the world the president would agree to take money out of the economy, knowing this would make matters worse and imperil his re-election prospects.
Matt Yglesias had a smart piece on this the other day, which as I understand it, helps accurately capture the thinking of many administration officials.
It’s generally wise to assume that the White House isn’t blind to that obvious potential political problem. Part of what they’re thinking is that a 2011 agreement to long-term spending cuts is the best way to avoid the need to reduce spending during the election season. How’s that? Well, it’s because the fiscal consolidation plans being discussed are for trillions of dollars worth of cuts over a 10-year horizon. Since you’ve got that horizon, it’s not strictly necessary for any of them to come between September 2011 and November 2012. On the contrary, in principle spending could go up in the short-term consistent with any long-term cuts.
By contrast, what happens if the White House winds up getting a “clean” debt ceiling increase is that we then head into the September lapse in appropriations. It’ll be a replay of the “government shutdown” fight in which the GOP goal has to be short-term cuts. And the White House isn’t going to get away without giving something up in that fight. In other words, clean debt ceiling increase = guarantee of fiscal anti-stimulus, whereas a 10-year spending cut plan leaves open room to avoid that.
There’s obviously all kinds of room for debate about the wisdom of this approach, but it’s entirely coherent, not at all crazy, and hardly evidence of a Democratic White House that secretly supports a Republican economic agenda.