Second guessing is oh so easy, and I always looked askance at those outside the negotiating room who had wisdom after the fact. But having said that …
Why did the president agree to a deal without the debt ceiling being lifted? Didn’t we play this script out once before? And didn’t the president, since he needs to be reasonable, in the end cave to Republicans who used the debt ceiling to extract concessions that shouldn’t have been granted?
This was the president’s moment of greatest leverage. The White House could have said to the House: Take us over the fiscal cliff, go ahead and have all taxes go up. You will suffer the wrath of the public—and for what? All we are demanding is that you eliminate a negotiation that will do enormous harm to the nation, a negotiation about the debt ceiling that merely authorizes us to borrow to pay for the expenditures you have voted for.
Having won the rhetorical debate about raising taxes on the wealthy, the president could have framed the debt-ceiling argument in an equally compelling way. All eyes would have been on the House of Representatives.
Now we will face a much tougher moment. The House will demand a series of deep entitlement cuts in return for lifting the debt ceiling, and the president will have little to offer or demand in return. It is hard to imagine that even he thinks he will get the House to raise taxes again.
So what did we get that was worth leaving the debt-ceiling issue unresolved? Very little. Thin soup at best: little revenue, no grand bargain sufficient to calm demands for deeper cuts in entitlements, and a payroll tax increase that will still lead to a net increase in taxes for the middle class.
We should savor the brief moment of perceived victory that the cliff deal has created, because there is going to be much pain in the coming weeks over the debt ceiling.