Speaker Boehner has offered to postpone for a year any new fight over the federal debt limit. The Washington Post says that this concession is “breathing new life into the stalled talks over the year-end ‘fiscal cliff’.” And, in fact, Obama met with Boehner for more talks this morning.
However, what the Post means by “new life,” I fear, is that, as a result of Boehner’s concession, the White House stands ready to receive additional concessions from the Speaker.
On the merits, though, I think it makes sense to hold off for a while on fighting against raising the debt limit. As I argued a few days ago, given Obama’s post-election popularity and the draconian nature of a default, it’s unlikely that Republicans successfully could execute a reprise of the 2011 default threat in early 2013, when the debt limit issue will next arise.
By early 2014, Obama’s “honeymoon” will be over and, depending on how the economy performs, his popularity may be substantially diminished. Delaying the next fight over the debt limit until then seems reasonable.
But this assumes that Obama makes meaningful concessions on the spending/savings side. From the Republican perspective, the debt limit and the fiscal cliff are the forcing mechanisms for the serious reforms needed to deal with our crushing national debt. Boehner has signaled both his willingness to raise some tax rates and to postpone the debt limit fight. But he cannot waive both forcing mechanisms without having forced significant savings. If he tries to, I imagine that Republican resistance will be intense.
The ball, then, is in Obama’s court. If he doesn’t return it, we will know that he’s happy to take us over the fiscal cliff.