Economy & Budget

Obama’s Brinkmanship?

Obama’s Brinkmanship?

We all remember the term “brinkmanship” from the Cold War, coined by President Eisenhower’s Secretary of State, John Foster Dulles. In an interview in Life magazine, Dulles defined it thus: “The ability to get to the verge without getting into the war is the necessary art.” On a charitable reading, this appears to be President Obama’s strategy in the battles over government funding and the debt limit. And there are indeed several similarities between the Cold War strategy and Obama’s current stance. But there is one vitally important difference.

The first similarity is the clash of ideologies. Just as the Cold War was a clash between Western democracy and Soviet oligarchy, the current battles are a clash between two different views of size and role of government. One side believes that government should spend at the same levels it has always done or less, while the other believes in spending much more than it has always done. This is not at heart a debate about living within your means—the pro-spending side wants to raise taxes to cover its spending, while the anti-spending side appears willing to repudiate its past debts—but about two radically divergent views of the nature of government.

The second similarity is the massive threat looming over both sides. During the Cold War, it was Mutually Assured Destruction—the idea that neither side would risk a nuclear exchange because it would kill millions and leave both sides in ruins. Today’s equivalent is a government shutdown that is harming both the reputations of the president and Congressional Republicans, but that is just a prelude to the disaster that would engulf both sides in the event of a default on American debt. Defaults always and everywhere cause immediate, significant economic hardship, with job losses and companies going under. Neither side can hope to escape at least some share of the blame were a default to occur.

Brinkmanship worked because in any given confrontation, it forced the side with the lesser resolve to step down. The Soviets blinked in the face of President Kennedy’s resolve during the Cuban missile crisis. Jimmy Carter’s dithering approach to foreign policy may have led the Kremlin to believe that it could invade Afghanistan without repercussion.

On the other hand, the Soviets genuinely believed that Ronald Reagan was willing to use military force against them. And we all know that story’s happy ending—“Tear down this wall,” and all that.

Given brinkmanship’s track record of effectiveness, it would be unsurprising for President Obama to use the strategy. Yet there is a clear difference in its application here. The president is exercising it against his own people. He is not just a leader of a party, but the head of state—leader not just of Democrats, but also of Republicans, Libertarians and all other political beliefs spread around this country. When it comes to internal politics, it is in many ways incumbent on him to seek to compromise, not engage in brinkmanship.

There is another possibility, however—that the president is not engaged in brinkmanship at all. Perhaps he believes he and his party will benefit politically from the Republicans being seen to push the Republic into a disastrous default. Such a strategy would be unconscionable—just as it would be if the GOP tried it—so we must charitably assume brinkmanship.

If this is the case, then we can comfortably predict that the issue will not be resolved until nearly the moment the government runs out of borrowing authority, on Oct. 17. Given that Treasury Secretary Jack Lew has some room to maneuver in prioritizing interest payments, the moment of default may be slightly later than that. Indeed, if he does exercise those powers, then that might be a clear sign of brinkmanship in action on the administration’s part.

The question then will be who blinks first on Oct. 17. Those of us hoping for some form of constitutional decorum from the Executive Branch hope it is the president.

Iain Murray is vice president for strategy at the Competitive Enterprise Institute (cei.org), a Washington, D.C. free-market policy organization. 

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