The first principle of poker is not to give any indication that you’re bluffing. President Barack Obama violated it at one of the increasingly farcical White House meetings on the debt ceiling. He reportedly left the confab with a warning to Republicans: “Don’t call my bluff.”
This is not a man who will ever be found expressionless, wearing sunglasses and a baseball cap, at a table at the World Series of Poker. Obama’s self-styled bluff is his threat to veto any stopgap increase in the debt ceiling. Such short-term legislating is unworthy of our country, according to Obama, and so he’ll reject it out of hand.
Given the devastation that the administration predicts will be visited on the country in the absence of an increase, Obama’s threat to veto a place-holding hike in the limit is probably just what he called it — a bluff.
True to the dyspeptic spirit of the talks, a squabble quickly broke out between Republicans and Democrats about whether Obama had left the meeting in a huff or had coolly ended it with the steely resolve of a man determined to make his opposition eat peas.
President Obama shouldn’t feel testy. He has dramatically transformed the debate over the debt limit to his advantage. He has posed as the advocate of the biggest deficit-reduction deal and used the threat of post–August 2 turmoil to paint the Republicans as reckless and unreasonable.
The GOP position deteriorated so rapidly that Senate Minority Leader Mitch McConnell proposed a convoluted scheme to give the president essentially a clean debt-limit increase in exchange for letting Republicans wash their hands of it. McConnell’s plan had a clear political message to his fellow Republicans: “We’re losing, and there’s no good way out.”
Figuring into his calculation is that no increase can currently get 218 votes in the House. If House Republicans were voting to cut spending by $10 trillion and raise the debt ceiling by $10, they still might not be able to get a majority. Too many of their members are opposed in principle. Never mind that none of them has a plan to cut federal spending by roughly 40 percent in two weeks’ time, which is what running up against the debt limit entails.
The paralysis in the House means Obama can beat nothing with nothing. His nothing is made up of phantom spending cuts that he’s never compelled to reveal but that he takes credit for proposing in negotiations. Free of any obligation to put them on paper, let alone get them scored by the Congressional Budget Office, he can pose as the most regal of fiscal hawks.
The House Republicans’ nothing is much more literal. Republican leaders don’t know their next move. To extend the poker analogy, they are all-in with no hand to play. If the worst comes on August 2, they will take much of the blame without having achieved any tactical or strategic aim. President Obama could receive his greatest undeserved political windfall since the financial turmoil of September 2008.
If a bipartisan deal doesn’t come together quickly, House Republicans at the very least should pass a 90-day extension and force President Obama to make good on his “bluff.” More ambitiously, they should pass a debt-limit increase with spending cuts equal to or greater than the increase in the debt ceiling. They could draw on the $6 trillion in cuts over the next ten years that they’ve already passed in the Ryan budget, or the roughly $1.4 trillion in cuts currently on the table in the White House talks.
Then they can wait for a serious counteroffer. The president still needs a deal, both to get some cover for his years-long spending binge and to signal to the markets that Washington can trim the debt. But if House Republicans continue to have nothing, the game may simply fall into his lap. The last thing Republicans should want is to make President Obama fortunate in his adversaries.