That Time When Refusing to Negotiate With Hostage-Takers Worked

In our 24/7 news cycle, major political stories come and go with lightening speed. When the result of those stories surface later, most of the mainstream media starts from scratch, failing to provide the historical context - and so voters don't connect the dots about how issues unfold. 

That is happening right now as Republicans hold the debt ceiling hostage and threaten to blow up the economy if their demands aren't met. Most news outlets are simply reporting that Biden has refused to negotiate with Republicans. But we've been here before and what happened in the past is important for understanding that position. So let's examine the recent history that led us to this place.

Soon after Republicans gained a House majority in the 2010 midterms, Republicans threatened to blow up the economy by refusing to raise the debt limit unless Democrats agreed to massive spending cuts. As a reminder, here's the essence of the threat:

When Congress raises the debt ceiling, it does not authorize any new spending; it permits the Treasury to pay the debts the U.S. has incurred from earlier fiscal-policy decisions. A failure to raise the debt ceiling would lead to the federal government defaulting, something that has never happened, and which could crater the stock market, spike interest rates, and disrupt payments to the millions of Americans who rely on federal checks.

President Obama entered into negotiations for a "grand bargain," seeking tax increases along with budget cuts to reduce the deficit. Ron Brownstein documented what happened.

Only days before August 2, when the nation would face an unprecedented default, Obama, Biden and the congressional leaders in both parties gathered in the White House for a frantic final weekend of negotiations. The two sides were trying to avoid calamity in an environment of “pure acrimony,” Furman told me. “I think if you look at the photographs that [the White House photographer] Pete Souza took over the course of that weekend, you can look at our faces and you don’t need to hear any words,” Lew said. “If you ask President Obama about the two or three most gut-wrenching moments as president I have no doubt this would be on the list.”

The sticking point was that Republicans wouldn't agree to raise taxes, but a deal was reached at the last moment. 

The deal linked as much as another $1.5 trillion increase in debt to the creation of a congressional “super committee” that would be guaranteed a floor vote on a plan to cut the deficit an equivalent amount. If the committee deadlocked, automatic spending cuts in defense and non-defense discretionary spending—what became known as sequestration—would be triggered.

Republicans on the "super committee" refused to raise taxes, so the disastrous sequestration cuts went into effect. 

What most news outlets are missing is what happened next. First of all, everyone from the Obama administration that was involved in the 2011 process said "never again." But in 2013, Republicans went back to the drawing board and refused to raise the debt ceiling unless Democrats agreed to their demands. That's when Obama made his position perfectly clear.

In recent weeks, Obama has been taking almost every opportunity to step in front of cameras and say, as clearly as possible, that he will not negotiate over the debt ceiling. On Dec. 5, he went to the Business Roundtable and said: "We are not going to play that game again next year. We've got to break that habit before it starts." On the 19th, he held a news conference where he was no less emphatic. "I’ve put forward a very clear principle: I will not negotiate around the debt ceiling."

On Jan.1, he gave a statement on the fiscal cliff deal. "While I will negotiate over many things," he said, "I will not have another debate with this Congress over whether or not they should pay the bills."

On the 4th, he gave a radio address in which he repeated the message. "One thing I will not compromise over is whether or not Congress should pay the tab for a bill they’ve already racked up," he said.

Then there was today's news conference, which was almost solely devoted to the debt ceiling. "To even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible," Obama said in his prepared remarks. "It’s absurd. As the speaker said two years ago, it would be, and I’m quoting Speaker Boehner now, 'a financial disaster, not only for us, but for the worldwide economy.' "

After Republicans added a government shutdown to the mix, here's how that one ended:

That campaign succeeded mainly in undermining popular support for the Republican Party, however. By late Wednesday, dozens of anxious GOP lawmakers were ready to give President Obama almost exactly what he requested months ago: a bill to fund the government and increase the Treasury Department’s borrowing power with no strings attached.

Of course, during Trump's presidency the debt ceiling was raised three times with no threats of default, even as the deficit ballooned. But as soon as Republicans regained a House majority during the Biden administration, they're at it once again. 

President Biden had a front-row seat for both approaches to Republican hostage-taking during Obama's presidency. With that recent history in mind, the call about what to do this time is not a difficult one to make. Negotiating with hostage-takers failed and refusing to do so succeeded. 

However, there is one way that things are different this time around. I suspect that the current lunatic caucus on the right would actually welcome a collapse of our economy - assuming it would damage the Democrats. But that means that negotiations are even less likely to succeed than they were in 2011. 

So we're in for a bumpy ride over the next few months. I'm placing my bets on the possibility that, when it comes to Republicans taking our economy hostage, perhaps the third time around is the charm. Maybe this time Biden will do something like use the 14th Amendment and end this nonsense once and for all.