Obama Aides: Negotiating With Republicans Makes Default More Likely

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Larry Downing / Reuters

Speaker of the House John Boehner listens to U.S. President Barack Obama during a meeting with bipartisan congressional leaders in the Cabinet Room at the White House on Sept. 3, 2013

President Barack Obama has no plans to reverse course on his no-negotiation stance on the debt limit and the government shutdown, two of his top economic aides said Monday at a breakfast briefing sponsored by Politico.

“That would increase, not decrease the chances that we and our country would default,” said Gene Sperling, the Director of the National Economic Council, of negotiating with Republicans. “He would be sanctioning the use of threatening default as a common negotiating tactic.”

He added that Obama is trying to “prevent an unprecedented distortion of our separation of powers,” that is being attempted by House Republicans.

Jason Furman, the Chairman of the Council of Economic Advisers, reiterated the administration’s belief that Obama has no way of working around the nation’s debt limit, which must be raised by Oct. 17 to avoid risking default.

“There is nothing in the law that gives the president the authority to ignore the debt limit,” he said.

The White House officials said there was some tiny space for a face saving compromise with Republicans. Furman expressed openness to Boehner tacking on a small add-on to a bill to reopen the government and raise the debt limit—an addition he called a Republican “talking point”—such as “no budget, no pay” provisions for Congress. But Furman said that whatever is added to the bill must not violate the administration’s commitment to it being a “clean” bill, and he said the White House would not negotiate over the additions.

Furman added that once Congress passes a debt limit increase without negotiations, the White House is open to sitting down with Republicans to deal with their fiscal concerns. “We need to all make clear that the era of threatening default is over,” Sperling said.

40 comments
BruceStrong
BruceStrong

"...In the first case, we’d have a recession and a financial crisis,” said Feroli, a former researcher at the Federal Reserve. “In the second case, we’d have a recession.”  OK, let's see if I get this... First the Fed's have to borrow yet more money and pay it back at a later date, but they have NEVER paid off any bonds without issuing new bonds, right! So, in conclusion the US can only avoid another recession by borrowing yet MORE money that the US will NEVER pay back!  OK, I get it now, thanks...

Everything is wonderful, it’s the Republicans who are bad mouthing this administration, and it’s all their fault tooooooo! By the way Congress could care less about privacy or spending, guess what Congress is NOT required to participate in the ACA, as they received one of the many exemptions handed out by President Obama!!!

KingMak
KingMak

Not living in USA, however, my shares may depreciate by half.

So, I need to read news online.

Then I have found one crazy thing in USA, not sure in the whole world or not. Why the upper house (sorry I forgot the US term for upper house) is run by one man? Crazy. 

I am not sure who is right or wrong. I meant the speaker of upper house or the president. However, the upper house should be run by the law (or rule, or constitution) not by a man. This is the most democratic nation in the world. How can a democratic country be running like a communist, socialist or monarchic like empire? 

I could not have imagine the upper house be run by a single man, the speaker. As a soccer fan, it is like the referee keeps delaying the match to start. The upper house is to double check and balance the power. If the bill is not good enough to the majority of the voting delegation because of failing to pass, then send it back to the lower house after vote.   

Can the constitution be changed to force a smooth flow of bills in a rational schedule? 

After writing the above, my mind has got something. If the bill cannot pass, then the one doesn't like it will of course send the bill through the voting process as soon as possible. Else, the one doesn't like the bill will delay the voting process if he knows the bill can have a high chance of passing. Or, I am naive. 

Is that one man can hold up something from moving a counter balance of power? Is this a man governed or law governed country? Why one man can stop the world from spinning?  

OzarkGranny
OzarkGranny

I don' get it.  Congress has voted to pay furloughed federal employees retroactively when the government shut down ends.  Therefore, federal employees are currently getting a paid vacation.  Is the only purpose of continuing the shut down to inconvenience the American people?

jwestbro9781
jwestbro9781

@JoshWeinstein  Your question should be whether the Republicans would negotiate over those demands, not whether they'd be OK with them. 

JoshWeinstein
JoshWeinstein

Imagine if Mitt Romney had won the Presidency and the Republicans also gained a majority in the Senate, but the Democrats retained enough seats in the house to have a house majority. Exactly the reverse of what we have now. 

Then imagine the Democrats were demanding that in order to avoid defaulting on the national debt, or shutting down the government, the Republicans had to agree to pass immigration reform with a path to citizenship, mandatory background checks for all gun purchases and other Democratic Party priorities.


Would the Republicans say this is OK, because we have divided government, or would they be screaming bloody murder and accusing the Democrats of extortion?

JUST ASKING....

BobJan
BobJan

Let's start with the subsidies to the "ETHANOL" projects. Then we can go on to other things. Next the subsidies to "BIG OIL". Next is the Home mortgage deduction which only is there for the wealthy. Then we'll talk.

ThomasHall
ThomasHall

Remember that it has been Pres. Obama and Democrats with little or no help from the GOP that turned around a Wall St. bankster fraud meltdown, and a auto industry, and and an economy in free-fall in 1/09 when the DOW was 6,949, and 880,000 monthly jobs were lost,/. They also passed the successful TARP, the successful ARRA, repealed DADT, passed equal pay for women, the ACA, the START treaty, etc., and was able to at least raise taxes on the super wealthy that have been coddled with massive, Nation Debt-incurring tax breaks, subsidies, and allowed five million manufacturing jobs to be shipped overseas and to Mexico along with hundreds of billions in uncollected revenue from thousands of GOP-enabled tax dodges offshore.

In contrast, the GOP have done nothing but block an all-time record of 430+ bills including job-creating ones, and even normally bipartisan bills like Transportation and the Farm Bill have been hung up and the GOP have wasted taxpayer's money with endless political posturing like their 45 senseless votes to repeal, defund, or delay to kill later the ACA which cuts into the profits and abuses of their wealthy healthcare providers and insurers.

Recall the last time the GOP used extortion over the debt ceiling in 2011 that frightened investors and dropped the DOW 2,5000 costing Americans trillions (I lost $9,000 and got out of the market) and their dysfunction caused a US credit rating down grade which costs more billions in interest. the GOP have historically NEVER represented the working class and are truly an enemy of the people having caused most of the problems that America and the 99% face today--from the massive National Debt which was less than $800 billion through Carter, to the GOP-Phil Gramm legislation that enabled the subprime mortgage fraud, the incoming debts and budget deficit left by previous GOP administration like GW Bush $1.7 trillion deficit, the 12-year, unpaid-for, non-jobs-creating, $2.8 trillion Bush tax cuts that went mainly to the rich, and the 20+ years of combined unpaid-for Bush-Cheney wars projected to cost over $6 trillion as the lifetimes of war bills and costly VA healthcare come in.

Ahu
Ahu

Fire and brimstone! The world is collapsing! What will we do now that our politicians don't have a fancy building to mope around in??


The government needs to "start" back immediate! I want my mopers!

jmac
jmac

Republicans want to pay the debt according to their priorities.  Joe Barton of Texas suggested what his priorities would be but stated that we weren't going to default on the public debt, but that didn't mean we have to pay every bill the day it comes in.   (I can't quote him as I get a malformed content warning). 

Republicans have proven over and over that they are brain-dead when it comes to economic issues.  

Hollywooddeed
Hollywooddeed

Tammy Faye Boehner:  if Democrats refuse to negotiate on the debt ceiling, Republicans will hurt Americans on purpose.  And if Democrats enter negotiations, Republicans will accept no concessions.  

Please, how is that negotiating?


j45ashton
j45ashton

The shutdown & debt ceiling are 2 different animals.  Trying to combine them into one negotiation just confuses things.  To get really absurd, it's possible that the House passes the debt ceiling, but the gov'r remains shut down.  So the GOP tried the shutdown to kill Obamacare and failed.  Now to get 'something' out of the mess that they created, they switch to a grand debt-ceiling bargain on entitlements where Medicare, Medicaid & Social Security are front & center, not Obamacare.  It should be apparent to the nation that the GOP is divided, knows that it made some foolish decisions about the shutdown, and is now trying to save face.  So the shutdown is no longer about anything but the GOP trying to save face.  They should give this up.  They already look like asses.  Just a matter of time before the NY Daily News (a Republican paper) starts putting out more cartoons & damaging headlines about them.

oldwhiteguy
oldwhiteguy

The personal attack politics, racial animosity, paranoia about government and distortion of reality that is today's Republican Party is now reaching critical mass. They have operated outside of the real world for long enough, thinking they are entitled to run things and lashing out in dying anger as they find out they're not. Obama is right for refusing to cede any more ground to these rightwingnuts. Our future is at stake here.

OzarkGranny
OzarkGranny

“I oppose the spending spree that we are on and the largest expansion of government since the Great Society with no plan to pay for it.”- John McCain, Readers Digest September 2008

Paul,nnto
Paul,nnto

It is starting to appear that the administration, after years of being yanked around by the republicans is Congress, finally understands that they cannot deal wiith a party that doesn't want to deal.

Sperling's correct, the hostage taking days are over as a winning tactic.

barneydidit
barneydidit

If the Republican party actually had a history of fiscal conservatism to point to anywhere over the past 3 decades, THEN maybe they'd have some credibility to their posturing about the debt. Unfortunately when you consider the fact that Ronald Reagan nearly tripled the federal debt while simultaneously labeling Democrats as "tax and spend (Oh, did I forget that Reagan also raised taxes 11 times?), and George W. nearly doubled it again under his watch, it just becomes impossible to take the party seriously when it comes to the debt argument.

Democrats aren't any better you say? OK, I'll go along with that to some extent, though no Democrat has tripled or even doubled the national debt in the past half century. But the key is....it's the Republicans that are making a stink about a subject they have no recent history of success in. It would be like a used car dealer making a stink about how hard it is to trust private party sellers...no one would take their criticisms seriously. 

jackdeelee
jackdeelee

If you think defaulting on our debts will be bad for the economy, imagine defaulting on our debts every year for the next decade. President Obama can't let Congressmen and women who play games with this country's future feel like they've been rewarded for their irresponsible actions.

kinolurtz
kinolurtz

every picture I see of Boehner, he looks like he is wishing death upon people... just sayin'...

shepherdwong
shepherdwong

@JoshWeinstein I love questions that: a) we all know the answers to and b) expose Republicans for the naked, whining hypocrites we all know they are.

bl
bl

@ThomasHall 

You pulled out of the market in 2011?
IN 2011?????

I take it your other ideas are equally brilliant.  

jmac
jmac

@ThomasHall If reports are accurate, the Republicans in Congress don't recall what happened the last time they held the debt ceiling hostage and we lost our credit rating.  Apparently, their economic memory is as short as a dementia patient's memory.  

shepherdwong
shepherdwong

@ViableOp"Once foreign bondholders decide that the risk of owning Treasuries simply is not worth it, interest rates are certain to rise and, along with that, interest owing on the $16.7 trillion worth of existing debt."

That's true, along with many other disastrous economic consequences. And about the only thing in the world, under present economic circumstances, that could make that happen is for traitorous "conservative" Republicans to keep fück!ng with the full faith and credit of the United States government.

bryanfred1
bryanfred1

@jmac I didn't see Barton's suggestions, but what he says is true under the law.  Creditors (i.e. holders of Treasury bonds) are at the front of the line to be paid before the government addresses everyday expenses.  Without authorization to increase the debt limit we can't issue more, but we can keep paying the interest and rolling over what is currently outstanding.

bl
bl

@Hollywooddeed The Republicans have explicitly stated they will accept concessions.
The Wall Street Journal has a list of possible concessions the Republicans would accept.

bl
bl

@j45ashton 
You're confusing the Daily News and the Post.

Really.    The Daily News is owned by Mort Zuckerman, who also owns the Atlantic, and is CLEARLY far liberal (he appears on MSNBC!) while the POST is a Rupert Murdoch paper.

Absorb that you are in fact, incorrect.  Allow yourself to consider that you may be equally incorrect elsewhere.


jmac
jmac

@OzarkGranny - Granny - it's simple.  We pay our debts with taxes.   Republicans don't believe in taxes.   They have yet to suggest another way to bring in income.    We could just not have a government and let our country be every man for himself  - but then every Republican would no longer have a job and wouldn't be able to walk on my sidewalk.  

barneydidit
barneydidit

@OzarkGranny Too bad most people don't realize McCain was talking about the Republicans with that statement Granny. 

JimStarowicz
JimStarowicz

The media, and they still call themselves a journalism profession, should stop with the FOX spin, the bill not being voted on by the House has Already been 'negotiated' and come to consensus, that's why it went to the senate and they voted for,  any questions on are not on the executive branch but the branches of congress and have nothing to do with the ACA, Exclamation Point!!!!!!!!!!!

PerryWhite1
PerryWhite1

@barneydidit Exactly. Another way to look at it is that they've run up the debt on the things THEY want, and now say we have no money for the things Democrats want. And, amazingly, blame this on the Democrats.

PerryWhite1
PerryWhite1

@kinolurtz I keep hearing on TeeVee how hard Boehner's job is, and how the talking heads all feel sorry for him.

Geez, how hard is it to surrender to the Tea Party? Newsflash, people: Boehner has picked his team, and it's not the one that helps America. He's decided his job is more important than the 800,000 jobs that have been furloughed, and he's all-in with the Tea Party.

ThomasHall
ThomasHall

@bl @ThomasHall Yeah, well, watch it go down again. I also did not want to be constantly thinking about my money like the Republicans. I lost no money in 2007-2009 thanks to the GOP deregulated banks and the GOP-Phil Gramm legislation that enabled the subprime mortgage bankster fraud. I have no debts, no obligations and lively cheaply ($1,500 per year) aboard a motor yacht while helping pool inner-city people

jmac
jmac

@bryanfred1 @jmac AND we can destroy our credit rating even more AND let the world markets go down with us.  Republican's aren't in power.  They have 17 measly seats in the House and they act like they own the world.  THey also have no memory of what it costs us the last time they did this.  it costs us money - money that could be going to pay our bills.  The bills we owe as they destroy our reputation and wreck our economy.  

But that's the point.  They want the economy to crash and burn.  They think it will win them seats.  

weevolved
weevolved

@bl @j45ashton Reality, then, is very left leaning.  All we ever get from conservative apologists are nebulous lobs.  Are you now denying that TeaPublicans are so screwed up, that they have no idea what they are really trying to do, that they are now re-purposing their grand hostage scene? Or are you in fact denying that threatening the country's well being--on purpose--in order to carve a law--a fully congressionally mature law of the land--out of existence because they could not do it through the normal constructs of our governmental design is an absolutely maniacal example of depravity?

j45ashton
j45ashton

@bl @j45ashton Mort Zuckerman is a moderate Republican.  I've seen him on the McLaughlin show many times.  You're confused because anyone who's moderate anything seems like a liberal to you.  Anyone who knows NYC know that the Daily News has been a right of center paper for years.  Try to absorb that you are in fact incorrect.

bl
bl

@jmac 
It would ruin our credit rating.
But maybe, as addicted to debt as we are, that's a much needed intervention.  Sooner or later, we all know it's going to fall.  Later means worse.  We have to get back in balance, somehow.    

j45ashton
j45ashton

@bl @j45ashton Nothing like looking at the record.  A moderate like Zuckerman could give to both sides.  Here are some contributions from 2012;

ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS, INC. POLITICAL ACTION COMMITTEE 

CANTOR VICTORY FUND - Republican

CITIZENS FOR JOSH MANDEL INC - Republican

NEBRASKA SENATE VICTORY FUND - Democrat
BERKLEY FOR SENATE - Democrat

DEMOCRATIC CONGRESSIONAL CAMPAIGN COMMITTEE - Democrat 

Wow...the Cantor Victory fund.  Dig that.  Zuckerman's record doesn't matter much although it does reflect on how you would like to distort the facts.  What does matter is that people like you can't believe, don't want to believe that Republicans will turn on other Republicans.  But Republican moderates are growing to hate radical conservatives like you.  And that;s the truth.

bl
bl

@j45ashton @bl 
Of course you realize his federal campaign donations are public record, right?
Moderate Republican?  Try again.  Strike Two.  
But you're a lib, you'll keep trying. You'll probably tell me next that his political contributions- again, public record- don't reflect his actual leanings.
The Daily News is right wing perhaps compared to the village voice, or NY Blade.  That's it.