Revisiting the Debt Ceiling Fiasco


Bob Woodward’s account of the 2011 debt ceiling debacle, The Price of Politics, was published on September 11. In blog time, that’s about a century ago, and by now you’ve probably forgotten it even exists. Nonetheless, Noam Scheiber has written a very good and very detailed review/takedown that’s well worth a read. Despite Woodward’s conclusion that Obama was largely to blame for the breakdown of talks, Scheiber says that Woodward’s own reporting suggests that Republicans were primarily at fault:

There is little in Woodward’s account that undermines this conclusion—in fact, his reporting largely supports it. In May of 2011, Boehner’s deputy, Eric Cantor, and the second-ranking Senate Republican, Jon Kyl, had opened a kind of prelude negotiation with Joe Biden and several top Democratic officials from the administration and Congress. The Republicans balked every time the subject of revenues came up. After Boehner and Obama took over the negotiations the following month, Democrats kept pressing for tax increases. Each time, according to Woodward, they ran smack into Cantor, who had joined Boehner at the bargaining table as the voice of House conservatives—the bad cop to Boehner’s good cop. At best, Cantor said, he’d be willing to close a few small tax loopholes and then offset them with new tax cuts. He reiterated this so often that it became something of a joke.

It is certainly true that, in spite of this resistance, Boehner proposed a deal involving $800 billion in revenue over a decade. The idea would be to gin up the $800 billion through “tax reform” rather than higher taxes—that is, lowering tax rates while closing loopholes in such a way as to increase the government’s take on balance. But, as Woodward shows, the distinction was lost on conservatives, who were dead-set against anything that raised money for the U.S. Treasury. When word of the negotiation leaked in early July, Boehner held a call with the entire Republican caucus to assure them that tax increases were off the table, just in case they got the wrong idea. It didn’t work—they got the wrong idea. House conservatives repeatedly told Boehner they considered “revenue increases” tantamount to the dreaded “tax increases.” Boehner himself concedes to Woodward that while he was negotiating with Obama, Cantor and his other lieutenants “kept saying we’re not going to do a big deal [involving revenues], can’t do a big deal.”

Read the whole thing.

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