Obama’s Debt Ceiling U-Turn

Barak Obama was full of sanctimony yesterday when he spanked congressional Republicans for threatening to tip the economy “into recession” if they fail to pass a clean debt ceiling extension. He insisted that he would never pay a GOP “ransom” to raise the debt ceiling and that to hold up a debt bill would be “irresponsible” and “absurd” because “the full faith and credit of the United States of America is not a bargaining chip.”

At least that is what he is saying now. What he proclaimed when he was a U.S. senator and George W. Bush was president was quite different. “Increasing America’s debt weakens us domestically and internationally,” Senator Obama said in 2006. Leadership means that ”the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren.” The future president wasn’t done, adding that raising the debt ceiling would constitute a “failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.”

When the president has been asked about his past opposition to raising the debt ceiling, he has said that circumstances change and he was mistaken back then. But the circumstances that have since changed included the fact that the debt is about $6 trillion higher now. So the case for not raising the debt ceiling in 2013 is about twice as strong as it was in 2006.

It all goes to show that for all the sermonizing, where you stand on raising the debt ceiling depends on where you sit. Sounding much like the Illinois senator in 2006, House Speaker John Boehner responded to Mr. Obama’s current moralizing by noting that “the consequences of failing to raise the debt ceiling are real, but so too are the consequences of allowing our spending problem to go unresolved.” Mr. Boehner is demanding a dollar in promised spending cuts over 10 years in exchange for every dollar extension on the borrowing limit. Mr. Obama insisted that he favors $4 trillion of deficit reduction over the next decade, but that must include tax increases, a “balanced plan,” and so the political wheel turns.

Meanwhile, the federal government has already technically exceeded its legal debt ceiling and is relying on accounting gimmicks to keep operating. On Monday Treasury Secretary Timothy Geithner informed Senate Minority Leader Mitch McConnell that the Treasury will run out of these “extraordinary measures” sometime between mid-February and early March. The clock is ticking, and Mr. Obama’s press conference/lecture on Monday did nothing to bridge the gap.