Reading the apologias for the bad bargaining by Democrats, I've come to the point that I can see only two alternatives: (1) either Bill Clinton was the greatest political bargainer in recent memory, or (2) a lot of people do not understand bargaining. Consider this Matt Yglesias post:
I’ve been in a few conversations with various people this week citing one strategy or another that they claim could have produced a “clean” debt ceiling increase and avoided the current legislative crisis. I basically agree with all these theories. Obama could have gotten a debt ceiling increase built into the December 2010 tax deal [. . .] But I’m not sure this is a case of bad negotiating strategy or good negotiating strategy.
We’ve seen so much mockery of “11-dimensional chess” that I think people have gotten unduly reluctant to credit the idea that there’s a bit of regular old chess happening here where you have to think one or two moves ahead. [. . . R]easonable people can disagree as to whether having the fight now is better than having the fight then, but I don’t think it’s by any means crazy for the White House to suppose that the current timing is more favorable to the progressive side or crazy to believe that they did, in fact, see two moves ahead and decide they preferred this outcome.
I do not know how a reasonable person could see it Yglesias' way. Not raising the debt ceiling is the most dramatic doomsday point that could be imagined. Failure to raise the debt ceiling would be catastrophic in the short and medium term, and likely the long term. Indeed, the President will end up by caving at the end, and rightly so. This is not the moment for brinksmanship.
The budget negotiations are an entirely different proposition. First, Republicans will never truly shut the government down - there will always be money going out for defense and other "essential services." Second, the President and Democrats would be able to fight on very favorable turf. Instead of the debate being about the "profligate federal government" it would be about whether Social Security checks would go out, whether people can see their doctor with the Medicare, whether rich people should pay more in taxes, whether the VA should remain open, etc.
There is a reason the debt ceiling discussions have been about nothing but spending cuts, because no one has to think about WHAT spending cuts. When the government shuts down, people see what they are not getting.
In short, the President and the Dems would have their maximum moment of leverage (short of tax cuts expiring.)
You want to negotiate a deal when your bargaining leverage is at its maximum, not at its minimum. This is basic bargaining.
It amazes me how few people understand this point.
In 1995, Bill Clinton searched for moments of maximum leverage to bargain with the Republicans. Luckily for Clinton, the GOP never played the debt ceiling card on him. But Obama should have known the GOP would with him. A good bargainer would have known not to give up his best chip (tax cuts) without making the other side take theirs (the debt ceiling) off the table.