Top Econ Adviser: 'The Era of Threatening Default Is Over'
Gene Sperling, President Obama’s top economic adviser, sketched out a hopeful scenario on Thursday for the next round of budget negotiations.
Not only is there the possibility of passing a budget to fund the government through the normal congressional process rather than lurching from crisis to crisis with stopgap measures, but Sperling also sees a “building of trust” over the dinners Obama has hosted with groups of lawmakers in recent weeks.
“Trust at least that there can be conversations that can be kept quiet. Trust that the president is willing to compromise, that he’s willing to—as we’ve seen—even take some disagreement from his own supporters,” Sperling, who is director of the White House National Economic Council, said at an event hosted by Allstate, The Atlantic and National Journal.
That's a positive outlook for a process that has been thoroughly twisted in recent years--and, asNational Journal recently reported, for which the path forward is anything but clear.
Sperling offered one place where there won’t be any friendly, quiet talks hosted by the White House. Earlier this year, Congress voted to suspend the U.S. debt ceiling until May 18, at which point the Treasury Department is expected to take so-called “extraordinary measures” to push back the date for a few months when the country exceeds its borrowing limit and goes into default. Then, it will be up to lawmakers to raise the ceiling.
In the summer of 2011, the debate over raising the nation’s debt limit became a looming crisis as Republicans tried to use the talks to demand spending cuts the White House refused to make. The dragged-out negotiations ultimately hit confidence, caused markets to tank and ultimately cost the U.S. its top, triple-A credit rank from ratings agency Standard & Poor’s. It is not remembered by most as a shining example of Washington at work.
This time, Sperling said, “We just have to be very clear: The era of threatening default as a budget [negotiating] tactic is over,” Sperling said. “The president is not going to negotiate on this.”
Suspending rather than raising the debt ceiling this winter allowed Republicans to sidestep a politically thorny issue. But negotiations this summer could heat up again, although it's not clear to what degree. Earlier this month, analysts at political risk research and consulting firm Eurasia Group wrote that "early signals indicate that this summer's debt ceiling fight will present less risk and less opportunity for fiscal reform than that of 2011." Some House Republicans have proposed prioritizing the nation’s payments in the event lawmakers can’t agree to raise the U.S. borrowing limit before it is reached. Sperling rejected that idea. “It is default by any other name,” he said Thursday.
And although Sperling sounded a hopeful note about negotiations occuring through regular processes and growing trust among lawmakers, he acknowledged that any negotiations over the budget could be derailed by intransigence. “I think we have to recognize that… if people, you know, particularly in the House, are completely unwilling to compromise, there’s nothing any of us can do,” he said.