Obama's Hard Line Remarks May Further Complicate Fiscal Talks

Published Sep 16, 2013. By John Shaw. In Market News International (MNI).

WASHINGTON (MNI) - For reasons that are not easy to discern, President Barack Obama has a penchant for making hard-line comments at sensitive times during fiscal deliberations - which seem to make it more difficult for moderate Republicans to sell compromises to their more conservative colleagues.

Late last year as talks were occurring on a possible fiscal cliff agreement, Obama gave a press conference in which he repeatedly chided Republicans for taking ill-advised positions on taxes and spending.

The president's remarks appeared to deepen the resolve of some Republicans to fiercely battle Obama during the fiscal cliff deliberations. The negotiations effectively collapsed and an ugly partial compromise was patched together by Vice President Joe Biden and Senate Minority Leader Mitch McConnell.

In remarks Monday on the fifth anniversary of the start of the financial crisis, Obama once again offered a hard-edged critique of the GOP.

His slashing comments come as important fiscal deadlines are approaching and congressional leaders are scrambling for a strategy to keep the government funded after October 1 and increase the statutory debt ceiling by the middle of October.

House Speaker John Boehner is still searching for a formula to keep the government funded while his conservative base wants to mount another attempt to defund the 2010 Affordable Care Act.

In his remarks, Obama said the GOP does not seem focused on boosting the economy and supporting the middle class, but added that he is "still hoping a light bulb goes off here."

Obama said the GOP is focused on cutting spending for key programs even as budget deficits fall. He said "one faction" of the GOP "promises economic chaos if it can't get 100% of what it wants. That has never happened before. But that's what's happening now."

The president repeated his insistence that he will not enter into talks with Republicans over debt ceiling legislation.

"I will not negotiate over whether or not America keeps its word and meets its obligations. I will not negotiate over the full faith and credit of the United States," Obama said.

He added: "Let's stop the threats. Let's stop the political posturing. Let's keep our government open. Let's pass a budget. Let's work together to do what the American people sent us here to do: create jobs; grow our economy; expand opportunity."

Bob Bixby, executive director of the Concord Coalition, said Obama sometimes has a tin political ear when it comes to his use of language during sensitive negotiations.

"President Obama does not always have the best bedside manner during these negotiations. Quiet phone calls and private meetings are almost always more productive than public pep rallies with members of your base," Bixby said.

"The goal is not to get the support of your supporters. Presumably you have that already. The goal should be to convince the other side and find areas of agreement. Public rallies aren't very helpful for this," he added.

Last week, House Republicans released an FY'14 stop-gap bill would fund the federal government at the level of $988 billion which assumes the sequester will stay in place. The FY'14 stop-gap would fund the government until the middle of December.

Boehner decided not to go forward with a vote last week because conservative Republicans were unimpressed with a proposal to pass a companion bill to defund the health care law.

Conservative Republicans assume Senate Democrats would brush aside this defunding bill and want a stronger measure.

As for debt ceiling legislation, it remains unclear if the House GOP will pass a short-term debt ceiling extension in the coming weeks or revive the debt limit suspension approach they adopted in January to line up the debate on FY'14 spending and the debt ceiling for mid-December.

Treasury has called on Congress to increase the debt ceiling by mid-October.

Boehner has said the House GOP will demand spending "cuts and reforms" in exchange for a longer term extension of the debt ceiling. Obama has said he will not negotiate over statutory debt ceiling legislation.