The government could teeter into default after Oct. 17, but President Obama and House Speaker John Boehner did little to settle their budgetary grudge match on Tuesday.
Instead, both men played the blame game, using public appearances to convince the public that the fault for a potential default—the first in U.S. history—rests entirely with the other side.
This is the current state of the play as the government shutdown lumbers into its second week. Obama and Boehner are openly fear mongering about the dreadful consequences—stock market meltdown, layoffs, a massive drop in home values—of the next crisis over the debt ceiling.
Just the possibility that the government’s $16.7 trillion borrowing authority will not be increased by the middle of this month was enough to cause Gallup’s consumer confidence index to plunge and the S&P 500 index to drop 1 percent on Tuesday.
Obama compared the GOP to extortionists. He argues that by refusing to reopen the government and raise the debt ceiling—unless Obamacare gets delayed or other concessions are made—the House Republicans are taking the world economy hostage.
“We can’t make extortion routine as part of our democracy. This also isn’t just for me, this is for my successors in office,” the president said at a news conference. “We’ve got to put a stop to it.”
The president stressed that no negotiations can occur unless the government reopens and the “economic chaos” of a potential default is averted, even if only for a few months. Obama pledged that he would come to the bargaining table—even to tweak the 2010 Affordable Care Act—if these two issues were settled.
"I'm willing to head up to the Hill and try,” Obama said. “I'll even spring for dinner again."
The president conveyed these thoughts to the speaker in a phone call on Tuesday morning. He suggested that “extreme parts” of the Republican Party are “forcing” Boehner and other moderates to risk a default.
The unmistakable subtext of his remarks—easily parroted by supporters—is this: Crazy Tea Party Republicans, emboldened by gerrymandered congressional districts, are poised to blow-up the entire global economy.
That’s a message that plays well with Democrats. Not so much for the Republicans with whom Obama must cooperate.
This was a tongue lashing when many Americans still hope for an olive branch. An enraged Boehner responded on Tuesday afternoon, noting that concessions have frequently been part of debt ceiling talks.
The Ohio congressman and his entire leadership team have again and again portrayed Obama as entitled and unreasonable, stubbornly refusing to honor the will of Americans who awarded the GOP a majority in the House three years ago.
“At times like this, the American people expect their leaders to sit down and have a conversation,” said Boehner, who called Obama’s request that the GOP back down to be an “unconditional surrender.
“That’s not the way our government works,” the speaker said.
Neither Obama nor Boehner said anything new on Tuesday. These are attempts to harness voter anger, should the worst-case scenario unfold. During the nadir of talks over the fiscal cliff last year—with the nation staring down a crippling tax hike—both politicians resorted to playing the blame game.
So this is an expression of two harsh realities for these politicians. Both are frustrated by the lack of progress. And both understand the severity of the impending disaster without a deal in place.
But the trouble with such posturing is that the clock is running out. The Treasury Department estimates that the government will be down to $30 billion in cash on-hand by Oct. 17.
According to a Bipartisan Policy Center analysis, the government needs to make a $12 billion Social Security benefit payment on Oct. 23. And by the start of November, it must make $18 billion in Medicare payments, $25 billion in additional Social Security payments, $6 billion in interest payments, and $12 billion to the military and veterans.
Put simply, the country begins to veer toward default on Oct. 17, as each new payment depletes what little cash reserves remain.
The problem is damning enough that Obama—willing to portray Republicans as criminal felons—said he needed to be careful and precise with his words. After saying that he would not unilaterally raise the debt ceiling on his own or have a trillion dollar coin minted, Obama said that Treasury Secretary Jack Lew would spell out the fine print in congressional testimony on Thursday because “details count.
If “there's legal controversy about the U.S. Treasury's authority to issue debt, the damage will have been done even if that were constitutional, because people wouldn't be sure,” Obama said. “It'd be tied up in litigation for a long time. That's going to make people nervous.”
The two things that Obama and Boehner individually agree on are that Congress holds control over raising the debt ceiling and that the fallout from any failure to do so would be devastating.
It’s not much for forging a deal, but, for the moment, it’s all we’ve got.