White House Gets Debt Ceiling Victory As Government Shutdown Threat Lessens

WASHINGTON -- The White House appears to have achieved one of its primary goals following the debt ceiling deal, with congressional Republicans showing little interest in extending budget fights through the fall.

In meeting after meeting with liberal and labor constituency groups following the protracted debt debate, Obama administration officials offered three specific reasons as to why the resulting deal was not the cataclysm that progressives believed it to be.

For starters, it protected the Democratic Party's sacred cows: there were no cuts to Medicaid or Social Security or to Medicare benefits. Secondly, by averting default, the White House had escaped a hostage-taking situation bruised but intact. In meetings with progressive and labor organizations, White House director of public engagement Jon Carson and top economic adviser Gene Sperling stressed that the debt ceiling debate had been the one "brutal" battle that stood between the 2010 and 2012 elections. The administration's chief objective, they said, had been to lessen the bitterness of the pill the Democratic Party had to swallow.

"There was agreement in the room that House Republicans were willing to push us overboard to make their agenda happen," said one labor source briefed on the pitch President Obama made to the AFL-CIO's Executive Council days after the deal was reached. "No one wants to focus on the deal that was made. They want to focus on what we can do to make the economy work going forward."

Both of these defenses have their flaws, as was pointed out in various forums that administration officials attended. Entitlement programs may not have been in the final debt ceiling deal, but the super committee established under the final agreement will almost certainly pursue elements of entitlement reform -- and cuts to Medicare suppliers are part of the trigger that would kick in if the committee finds itself deadlocked. The notion of the debt ceiling debate being a poison pill, meanwhile, doesn't excuse what many stakeholders viewed as an uninspired negotiation strategy from the White House.

As for the third arm of the administration's pushback against critics, however, the president and his team do appear to be on a path to vindication. The spending levels set under the final agreement seem likely to preclude budgetary fights for the remainder of the fiscal year, despite being substantially higher than the alternative levels House Republicans proposed.

Under the debt ceiling deal, the budget cap set for 2012 is $1.043 trillion. For 2013, it is roughly $1.047 trillion. Adding in the additional Pell Grant funding included in the deal, those numbers rise to $1.053 trillion and $1.054 trillion, respectively. Under the budget passed by House Republicans this past spring, spending levels for 2012 are set at $1.019 trillion -- approximately $44 billion less than the debt ceiling cap.

There had been general concern among elected and non-elected Democrats alike that when the continuing resolution funding the government runs out at the end of September, congressional Republicans would make a push for even more dramatic cuts. The debt ceiling deal, after all, set caps on spending, not baselines. If GOP lawmakers wanted to force the issue further, they could do so. But Republican leadership has thus far appeared content to treat the debt deal as the final word -- thereby dramatically lessening the threat of a government shutdown at the end of September.

“While all of us would like to have seen a lower discretionary appropriations ceiling for the upcoming fiscal year, the debt limit agreement did set a level of spending that is a real cut from the current year level,” House Majority Leader Eric Cantor (R-Va.) said in a recent memorandum to his colleagues. “I believe it is in our interest to enact into law full-year appropriations bills at this new lower level.”

As Rep. Chris Van Hollen (D-Md.), the senior Democrat on the Budget Committee, told The New York Times about the debt deal: “It substantially reduces the risk of a shutdown fight."

To those Democrats -- and there were many -- who believed that the debt ceiling bill should have been "clean" and should not have contained spending cuts, the fact that those cuts may have preemptively resolved a possible government shutdown fight likely provides little solace. House Republicans, after all, got reduced spending (about $7 billion below current levels) at a time when public opinion polls and macroeconomic models alike suggested the government had a greater role to play in turning around the economy.

Still, the absence of a government shutdown debate in September is welcome news, both for Congress at large (the public clearly recoiled at the messy standoff over the debt ceiling, given polls that show historically low approval ratings for lawmakers) and for the White House, which can now try and shape the political narrative without a major, domestic political crisis intervening.

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