A Favorable Debt Ceiling Deal in December Was Not Possible, Says White House Advisors
Valerie Jarrett: "Republicans were not going to extend debt ceiling back then."
Despite arguments that President Obama could’ve dealt with the debt ceiling promise last December, while there was still a Democrat majority, instead of waiting until near-default, White House officials are saying no debt ceiling deal was possible in December.
“We could not get this then, they were not willing to give it to us,” said senior adviser Valerie Jarrett on a conference call about the debt ceiling agreement. “The Republicans were not going to extend the debt ceiling back then.”
The agreement that was reached yesterday, and is being voted on today lists a significant amount of compromises at Democrats’ expense -- the biggest being that no immediate raised revenues are part of the terms.
The deal includes a $2.1 trillion heightening of the debt limit, an immediate $1 trillion in deficit-reducing spending caps equally split among defense and non-defense discretionary spending, and then the formation of a congressional bipartisan committee who will devise a plan for $1.5 trillion in additional deficit reduction measures. If the committee fails to achieve this plan by Thanksgiving, then automatic across-the-board spending cuts would kick in in 2013 -- excluding cuts to Social Security, Medicaid, most of Medicare, and many important low-income programs.
Democrats and Obama have pushed for tax reform and raising revenue to be a part of any debt ceiling-raising or deficit reduction deal. In the current plan, that is possible if the special committee is able to incorporate it into their Thanksgiving plan. It’s also possible if the Bush tax cuts to the wealthy are allowed to expire at the end of 2012.
But its the huge amounts of spending cuts upfront that has rankled many Democrats, particularly those in the Congressional Black Caucus. Rep. Emanuel Cleaver, the CBC chair, called the deal a “sugar-coated Satan sandwich.”
Many have said that this last-minute compromise didn’t need to be. There was an opportunity last December, during the lame-duck session when Democrats were Congress’ majority, when debt ceiling measures could have been dealt with during the clash over extending the Bush tax cuts, and allowing unemployment insurance to expire.
New York Times columnist Paul Krugman said:
“First of all, he could and should have demanded an increase in the debt ceiling back in December. When asked why he didn’t, he replied that he was sure that Republicans would act responsibly. Great call.”
At The American Prospect, David Dayen wrote:
“The president and Democrats could have pre-empted this by demanding a large increase in the debt ceiling as part of the tax extension and threatening to allow all the Bush tax cuts to expire if no deal was reached.”
Dayen also wrote: “Democrats, though, never even offered” a debt ceiling deal.
Not so, said White House National Economic Council deputy director Jason Furman on this afternoon’s conference call.
When The Loop 21 asked why the Obama Administration didn’t take up debt ceiling in their December dealings, Furman said Democrats did bring it up but Republicans refused to include it.
“I was present in those negotiations, and it was an issue that Democrats brought up,and there was no way we could have gotten it there, and certainly no way -- they refused, they did not want to do it there.”
Furman and Jarrett went on to list the things Obama was able to achieve in December, such as a payroll tax cut, earned income tax credit, child tax credit, as well as an extension of unemployment benefits, which at the time were set to run out for five million Americans.
“It was fortunate that we were able to get all of that,” said Furman, “and we could not have gotten that and the debt limit. I don’t think we could’ve gotten the debt limit by itself.”
This does, in fact go against the words of Senate leader Harry Reid who said back in December that he would put the debt limit issue off until Republicans controlled the House. Nor does it square with Obama’s December words that he believed Republicans would merely do the right thing when the time came.
It might only be assumed that neither Obama nor Reid were part of the negotiations that Furman sat in on, or weren’t aware of debt ceiling discussions. The Loop 21 will follow up to gain clarity.
Still, if Furman is revising history, there remains no guarantee that Republicans would have agreed to it had it come up. But Jarrett also said that a December debt-limit deal wasn’t possible, and that it might have cost the U.S. more than they could afford at the time.
Said Jarrett: “What the President was able to get in December … was very, very sound. But the Republicans were not going to extend the debt ceiling back then, and when you look at what we were able to achieve, it was important that we had all of those metrics and programs in place for hard working folks around the country.”