The debt limit denouement

The deal is much better than I expected for Democrats, and much worse for Republicans (preliminary summaries by Dayen and Stein).  Of course, the whole thing was destructive and pointless and the deal is bad in the way one would expect – it includes work requirements for some food stamp and TANF recipients.  On the plus side, these requirements are crafted to limit the number of people affected while letting the Republicans claim a “win”.

Over the past few weeks many observers and congressional Democrats criticized Biden for his relatively quiet approach to negotiations.  I was sympathetic to this criticism.  I initially thought the administration should keep attention focused on Social Security, Medicare, Medicaid, and after that ship sailed I thought they should insist that compromise and bipartisanship required revenue increases as well as spending cuts.  And I generally think the administration falls short on communications.  Nonetheless, I tried not to criticize the administration too directly for its communications strategy, because sometimes it is best to negotiate quietly rather than in public and I thought this might be one of those times.  Matt Yglesias offers this related observation:

If I may venture a general observation about the Biden Era, I don’t think it’s a coincidence that this process has felt much more humiliating to the White House than the Obama Era equivalent and yet the substantive outcome is a lot better. Biden frustrated a lot of his allies on the Hill over the past month by not having more of a communications strategy, but the best insight the president has brought to all his bipartisan legislating is that the less said the better in order to negotiate in private around real demands rather than in public around positions. Case in point, part of this deal is a modest trim to Democrats’ plans to fund the tax police. That’s borderline absurd — of all the spending to cut, why one that increases the deficit? But the reason is Republicans love rich tax cheats! You could call them out on their hypocrisy or you can give them a win that matters a lot to them and that is compatible with Biden’s main priorities.

Yglesias makes the following point about Biden’s negotiating strategy:

In the short-term, dismissing the viability of the strategies around the 14th Amendment, the platinum coin, and premium bonds was a huge mistake. The spin that this wouldn’t work because of judicial uncertainty won’t hunt. The president could — and should! — have said that his preference was to avoid using those options because of his limited confidence in the courts and because the financial system doesn’t like wackiness. But he still should have preserved them as options he would prefer to use rather than signing a terrible deal. In any kind of negotiation, you need a Best Alternative to a Negotiated Agreement (BATNA) and “I’m going to sell premium bonds and fight it out in court” is a much better BATNA than “there’s going to be a default.”

I am not sure this is right.  Emphasizing the availability of these work-arounds could have increased the risk of a breach by reducing the pressure to compromise.  And a breach could have been very bad for both the country and for Biden’s re-election prospects (which would also have been very bad for the country).  If Biden advertised these work-arounds and then they failed and led to a financial crisis he might have ended up taking the blame.  In addition, the best play for Biden in the event we hit the debt ceiling may well have been prioritization of interest payments and trying to turn the debt ceiling into a kind of government shut down – slow building pain rather than financial catastrophe.