White House debt-ceiling negotiations have collapsed into a public relations duel, as each political coalition tries to harness the public’s simultaneous fears of defaults and runaway budgets.
Obama administration officials want swing voters to pressure Republicans to agree to a tax increase in advance of the 2012 elections. Republicans want the same voters to pressure Democrats to accept budget cuts.
White House officials believe they have a winning hand. Republicans, meanwhile, view themselves as better positioned in the current debt-ceiling fight than they were in mid-1990s budget showdowns with President Bill Clinton.
“That’s really the nub of it — each side thinks they’re making progress, otherwise they would not be holding out,“ said Tevi Troy, a senior fellow at the Hudson Institute and a former senior official in the George W. Bush administration.
“The Democrats continually look back to the 1995, 1996, Clinton playbook, but we are in a different era with a much greater sense of reality [among the public] about the financial crisis we’re facing,” Troy said.
“The difference [now] is that you can turn on the TV and see riots in Europe, Moody’s and Standard & Poor’s threatening to downgrade our credit rating,” said Michael Franc, the Heritage Foundation’s vice president for political outreach. (Optimism for good deal on debt limit at all-time low)
On Monday, President Barack Obama announced that he would accept nothing less than a major tax increase, and that federal job-creation spending should increase once the deal is signed.
On Tuesday afternoon, the president increased the political pressure on Republicans when he refused to shield federal check-writing operations from an Aug. 2 budget shutdown. Each month those automated operations distribute more than 70 million Social Security, disability and veterans’ checks.
“Democrats see gaining a tax increase from the Republicans would be a huge political win for them,” said Troy. “They would pound Republicans just as they did with President George H. Bush” after he signed a tax deal in 1990.
On Monday, Sen. Charles Schumer, a New York Democrat, predicted that Republicans would cave.
“When we get close, when the bond markets start to get a little jittery, God forbid, the pressure is going to fall much greater on them than us, and I think that will bring us to the table for a larger deal,” Schumer said in an interview on MSNBC.
There’s some evidence that poll numbers are moving in the administration’s favor.
A July poll released Monday, conducted by the Pew Research Center for the People & the Press and The Washington Post, showed that 45 percent of swing-voting independents were more concerned about an economic default than they were about greater spending and debt. That’s up from 34 percent in mid-May.
Democrats have won these crisis showdowns many times before. (House members propose bill to ensure military checks if debt ceiling not raised)
In April, for example, Obama used the threat of a government shutdown to pressure Republicans for a deal which did not significantly reduce the federal budget.
Democrats also were victorious over House Speaker Newt Gingrich in 1995 and 1996, when the speaker wanted to cut spending and reform many discretionary and entitlement programs.