The consequences of failing to extend the country's borrowing limit are catastrophic, the president said just after the House vote on Tuesday, and he simply won't negotiate over it.
Obama's success rests on a strategy that served him during both his 2012 campaign and the high-stakes fiscal cliff talks: define his opponents early and drive up public opinion in his favor.
He will cast Republicans as reckless as they pursue steep cuts to popular entitlement programs in exchange for a debt limit increase. White House officials don't view the sell as a difficult lift because, as they see it, Republicans are threatening to topple the world economy to slice benefits for elderly Medicare recipients -- not exactly a winning message, Obama aides snicker.
The president is likely to follow the playbook of the fiscal cliff fight and almost every other major policy battle over the past 18 months, initiating a campaign to persuade voters and mobilizing small businesses, labor unions, corporate America and Wall Street to exert pressure on lawmakers.
But reality won't be as clear as his no-negotiating rhetoric suggests. His decision to accept a two-month delay in across-the-board spending cuts known as the sequester -- which comes due at the same time as the debt limit -- guarantees that he'll have to enter into talks with Republicans.
Republicans insist they're on the right side of public opinion in this round, citing a CBS News poll last month that 68 percent of Americans don't want the debt limit raised. After agreeing to $620 billion in tax revenue to avert the fiscal cliff, congressional Republican leaders claim they will accept nothing less than a dollar in cuts for every dollar increase in borrowing authority.
"The president liked to point out on the campaign trail that most Americans supported the idea of taxing the rich," Senate Minority Leader Mitch McConnell (R-Ky.) said Thursday on the Senate floor. "What he conveniently left out is that even more Americans support the idea of cutting spending."
What remains unclear is whether either party truly believes that the other will allow the country to default on its obligations -- an outcome that top Republicans and Democrats say would be devastating. But the entrenched positions ensure that, at the very least, the debt limit fight could make the fiscal cliff standoff look tame.
"In many ways that may be harder because we gotta get some spending under control," Senate Minority Whip John Cornyn (R-Texas) said. "And that's something the president talks a lot about, but he never seems to be willing to engage in it."
Obama won't negotiate over the debt limit, aides say, because he is determined to break the cycle of using the country's borrowing limit as a bargaining chip.
"I will not have another debate with this Congress over whether or not they should pay the bills that they've already racked up through the laws that they passed," Obama said. "Let me repeat: We can't not pay bills that we've already incurred. If Congress refuses to give the United States government the ability to pay these bills on time, the consequences for the entire global economy would be catastrophic -- far worse than the impact of a fiscal cliff."
The challenge is how Obama separates the sequester from the debt limit in his negotiations with Congress.
He could attempt to limit the scope of the talks to the size of the sequester, which is roughly $1 trillion. But Obama has already said he wants as comprehensive of a deal as possible, so the total cost of a successful agreement could still make it appear, in the end, that he negotiated over the debt limit -- perpetuating the cycle he hopes to break.
Obama plans to insist that any deficit-reduction deal, no matter the size, would need to be evenly divided between spending cuts and revenue. If Obama can achieve an equal split, he might able to persuade his party to go along with a big deal that makes substantial changes to cherished entitlement programs.
The White House is convinced that the president is playing the winning hand.
A Wall Street Journal/NBC News poll at the height of the last debt limit fight found a significant shift in attitudes once the public tuned in. In mid-July 2011, 38 percent of Americans said the debt ceiling should be raised, while 31 percent said it shouldn't. A month earlier, 39 percent opposed raising the debt limit and 28 percent favored it.
Polls also find that cutting Medicare and Social Security isn't a popular position.
But Democrats already sense they will be on the defensive in the upcoming fight. The party won a major political debate over hiking tax rates on wealthy families, and effectively sold that point to the public. Now that they've settled the dispute on rates, they're regrouping to figure out how best to make their tax arguments.
Unlike the White House, Senate Democrats did not want to agree to a two-month delay in the sequester because they feared it would give the GOP too much leverage in the debt ceiling fight. And Democrats worry that Obama's decision to rule out invoking an obscure provision in the 14th Amendment and unilaterally pay the country's debts has weakened his hand.
Asked about the political fallout of the tax deal, Senate Majority Whip Dick Durbin (D-Ill.) said the party could still focus on limiting itemized deductions typically claimed by high-income earners or adding new taxes to fund infrastructure projects. And he said Democrats would insist that any debt ceiling accord be balanced with revenue increases, though he was vague on the details.
"In terms of future tax reform, other taxes and other sources of revenue, we have to keep an open mind if we're serious about the deficit," Durbin said. "The president is insistent that any future talks about deficit reduction include revenue. There will have to be some other aspect of it that's brought to the table, and if it isn't a rate increase, there are other ways."
But Republicans insist they won't go along on revenues, even though the last offer that House Speaker John Boehner (R-Ohio) made to Obama during the fiscal cliff talks included $1 trillion in new taxes, more than the $620 billion in the final deal.
Soon after the festive swearing in of new senators Thursday, McConnell launched a broadside against the president for not being serious about cutting spending and called on him to show courage.
McConnell said if Obama refuses to engage in the debate over spending cuts, the GOP will use its power to force the matter. He declared that the debate over revenue and taxes is now "over" and "off the table."
"He can either engage now to significantly cut government spending or force a crisis later," McConnell said, citing the need to slice health-care-based entitlement programs.
Sen. John Thune of South Dakota, No. 3 in GOP leadership, said the dollar-for-dollar principle is one "that a lot of our members want to adhere to."
"We think it makes sense if you're going to raise the debt limit, that you ought to be addressing the debt," Thune said Thursday. "And the way you do that is you figure out ways to reduce spending by reforming many of these programs that are going to be driving spending particularly in the out-years."
Thune declared the tax issue "dealt with," saying the GOP is standing on much firmer ground now than it was during the fiscal cliff fight.
Not all Republicans think that strategy will work.
"If the Republican House thinks they're going to get a deal on entitlements as a result of getting a deal on the debt ceiling, they're foolish," said former Sen. Judd Gregg (R-N.H.), co-chairman of the Campaign to Fix the Debt. "[Obama's] not about to do that, and he knows that the Republican House isn't going to be able to push us into default."
But Chris Chocola, president of the Club for Growth, contends Republicans have public opinion on their side.
"Most Americans, if you ask them, want less debt, and it's clear that Obama and the Democrats want more," Chocola said. "If the Republicans can convincingly and confidently tell that story, I think that they can start to win the debate."
"But they have to be willing to shoot the hostage," he added. "They have to be willing to not raise the debt ceiling. I think Obama doesn't believe we'll do that and Republican leadership worries about what guys like you write. ... They have to be willing to say, 'We're not going there unless we put meaningful reforms in place.' The public at least on this one is kinda on their side."
But what the congressional Republicans lack is the bully pulpit that Obama has shown he's more than willing to use, just as he did on Tuesday night.
"People will remember, back in 2011, the last time this course of action was threatened, our entire recovery was put at risk," Obama said. "Consumer confidence plunged. Business investment plunged. Growth dropped. We can't go down that path again."
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