WASHINGTON -- One of the President’s top advisers opened the door on Wednesday to adding deficit-reduction elements to a bill that would raise the country’s debt ceiling.
On a conference call with online reporters and bloggers, senior aide David Plouffe predicted that Congress would ultimately not “play chicken with the full faith a credit of the United States” and pass a bill to allow the Treasury to borrow money past the current limit. But while Plouffe and others insisted that the deficit should be reduced separately from that vehicle, they were not as firm as in previous days in demanding that the bill be “clean” of any such legislation.
“We need to do the responsible thing in the coming weeks, which is passing the debt limit. But that doesn’t mean we shouldn’t strive to make progress in reducing the deficit in a smart way,” said Plouffe. “We are at the point now where it is not just the leadership… but a lot of rank and file members of Congress in both parties, everyone has been clear, we are not going to play chicken with the full faith and credit of the United States and risk an economic catastrophe, particularly as we are recovering from the last economic catastrophe. So the debt ceiling is going to pass. Exactly when and what the process is will be fully revealed.”
The remarks from Plouffe reflect those made earlier in the day by House Speaker John Boehner (R-Ohio), who relayed that the president himself had opened the door to amending a debt-limit-raising bill during a closed-door meeting Wednesday morning.
What type of amendments or legislative language get added could turn a historical mundane political exercise into something a bit more dramatic. The debt ceiling, which currently sits at $14.294 trillion, is likely to be reached in May or early June. The Treasury Department has various accounting gimmicks at its disposal to ensure that the government can continue to make payments even if it lacks the capacity to borrow more money. But the financial markets, it seems, won’t have an appetite for a protracted debt-limit standoff.
On Wednesday morning it was reported that Boehner had huddled with Wall Street executives to chart out what would happen if the debt ceiling was reached (or came close to being reached). Democrats pounced on the news of the discussion. But hours later, they were touting their own work with the Street, with Sen. Chuck Schumer’s (D-N.Y.) top spokesperson sending out a Financial Times article that read: “The Obama administration is trying to enlist Wall Street executives in debate over increasing the debt ceiling.”
Certainly, there is a solid chunk of the Republican Party -- mainly members of the Tea Party -- that would like to see spending cuts or other deficit reduction measures attached to any vote to raise the debt ceiling. But in this debate, the White House has the luxury of not just Wall Street’s lobbying power, but also simple Google searches, to make its case. President Obama and his aides can point to the fact that Boehner has not backed off the assessment he offered in late January, when he said that failure to raise the debt ceiling would spell “financial disaster” for the country.
“Our view on this has always been the fact that the debt ceiling is going to get raised,” White House Communications Director Dan Pfeiffer said on the same conference call. “Every leader in Congress has discussed this. They say they are going to raise the ceiling."
"It is our belief that they do not want to play chicken with the economy on this because it will have calamitous effects," he added. "You do not need the debt ceiling to deal with deficits. Deficits can be done separately and that’s our hope.”