President Obama has a card in his hand, that is not getting much press, but it will make all the difference in the coming debt-ceiling negotiations: scheduled defense cuts. Obama said in today’s press conference that Republicans don’t get to extract “ransom” for raising the debt ceiling, adding, “The full faith and credit of the United States of America is not a bargaining chip.”
Here’s the thing: yes it is. In fact, it is likely that enough House Republicans would rather allow the U.S. to default on its loans (which is what happens if we don’t raise the debt ceiling) than accept a deal that raised the debt ceiling without providing substantial cuts. In fact, Politico quoted one Republicans operative who said that Republicans may need to shut down the government, “just to get it out of their system. I can understand that, sometimes I’ll shake out my shoulders, just because it feels good. So please, if shutting down the government is what it takes for you guys to feel right, I don’t see why not.
So why is Obama not acquiescing, at least a little to these guys? Two reasons. The first, a hard-earned lesson from the president’s first term, is that the sooner you offer concessions, the more concessions you end up giving. The second is the trump card Obama has been quietly holding this whole time: defense cuts.
It is thought that this time, Republicans have the leverage, because Obama must cajole them into doing two things that they are not keen on doing: raise the debt ceiling, and agree to hold off on major spending cuts (a.k.a. “the sequester cuts”) which are due to happen automatically. But spending cuts are Republicans whole M.O., why don’t they just let them happen? Because half of those cuts come from the defense department, and while Republicans scoff at “entitlement” programs like social security, Medicare and Medicaid, defense spending is a whole ‘nother matter. Most Republicans and many Democrats never saw an increase in defense spending that they didn’t like.
That defense cuts are included in the deal is enough to scare Republicans in to making a deal, and Obama has artfully cornered them on that issue, so that Republicans will have to redefine their position as anti-spending except when it comes to having military bases dotting the globe or, alternatively, if spending is such a problem, then defense ought to be among the first things cut.