In the end, the president accepted the debt ceiling deal forced on him by the Congress, bitterly swallowing the policy changes packaged with it. "To play around with the debt limit this way means really that you're playing with dynamite," his treasury secretary said on a "Today" show appearance, adding, "There is a gun at [the president's] head, if you will." The president himself complained "the choice is for the United States to default on its debts for the first time … or to accept a bill that has been cluttered up. This is just another example of Congress trying to force my hand."
The president was Ronald Reagan; the treasury secretary was James Baker, and the year was 1987.
President Obama has argued that the demand for him to negotiate over the debt ceiling is unprecedented, while House Speaker John Boehner says it's routine. As the Reagan example indicates, Boehner has a point about the history – but just because he is correct, it doesn't mean that he's also right on the larger point.
Take the 1987 debt ceiling law, for example. The differences are as important as the parallels, starting with the fact that it wasn't a partisan fight. The bill Reagan signed had passed with bipartisan majorities, with GOP congressional leaders going to the White House to lobby the president to sign it. And as New York Times conservative columnist Ross Douthat pointed out this week, unlike the 2013 GOP, the 1987 Democrats controlled both the House and the Senate and were pressing a modest bill: "They were operating from a position of political strength, making policy demands that attracted bipartisan support."
That was the classic pattern of debt ceiling negotiations. "The kinds of concessions that got attached … were fairly marginal things that the president really wouldn't be willing to go to the mat for," says Philip Wallach, a fellow in governance studies at the Brookings Institution.
Everything started to change in 1995 when House Speaker Newt Gingrich made the startling assertion that he would not schedule a vote on raising the limit until President Bill Clinton had signed on to a GOP balanced budget plan. "I don't care what the price is," Gingrich told a bond dealers association. "I don't care if we have no executive offices and no bonds for 60 days – not this time."
Clinton vetoed a debt ceiling bill which the GOP had festooned with their agenda items, and the debt ceiling fight dragged on for months as Treasury Secretary Robert Rubin engaged in the now-familiar extreme measures to stave off default. In the meantime, overreach and government shutdowns took their toll on congressional Republicans, and at the beginning of February – with default still weeks away – chastened GOP leaders wrote to Clinton promising to pass a debt ceiling law "in a manner acceptable to both you and the Congress." In the end Clinton signed an increase with a handful of extra provisions he had signed off on, including a (unconstitutional, it turned out) line item veto.
So what has changed? "We've never seen this type of concerted effort where one party says that default is completely reasonable and has a multi-year strategy of repeatedly trying to push the country to the brink of default to extract its ransom," Jason Furman, the chairman of Obama's Council of Economic Advisers, said Thursday. "It is the scale and the intensity and the degree to which it is happening."
The current showdown, the GOP offer to postpone it for six weeks notwithstanding, has a dangerous, new tenor, calling into question whether a debt ceiling increase will pass at all. The GOP now openly holds out the prospect of default, characterizing the idea of negotiating after raising the debt ceiling – when the immediate danger has been eased – as "unconditional surrender," as if their only leverage lies in their ability to intentionally harm the country. Consider the contradiction: Boehner says he wants to reopen the government and raise the debt ceiling but simultaneously behaves as if doing either would be an accommodation for which the president should pay. Raising the debt ceiling and reopening the government can be things the GOP wants or they can be concessions for which Republicans want a price, but they can't be both.