Thursday, July 14, 2011

On the debt ceiling, Obama turns tables on Republicans

Photo from The New York Times

Something has to get done. Whatever sort of deal, or whether or not a deal at all, the debt ceiling must be raised. It's as simple as that, even if the process of getting there is mired in complication.

The Democrats know this, and they're pretty much all on board. But Republicans... oh, they're not quite as unified. John Boehner has lost control (and so is lashing out at the White House, because there's nothing left for him to do), to the extent that he ever had any, over the House, where Eric Cantor is angling for the top spot and most Republicans, Tea Party or otherwise, don't think there's any problem with not raising the debt ceiling. More than that, they object to raising it unless they can get something out of it, like a balanced budget amendment. Even a deal that would give Republicans so much of what they want, major spending cuts, including to hated entitlement programs like Social Security, offset by only a mild revenue increase, isn't enough, as Boehner has learned. House Republicans are right-wing extremists. They loathe compromise, refuse to agree to anything short of the absolute implementation of their extremist agenda, and aren't about to give in even to the corporate interests who fund the party.

Mitch McConnell has floated the idea -- his contingency plan -- of allowing for a debt ceiling raise in return for nothing, as Democrats are the ones who vote for it and hence the ones whom voters will blame for it. Conservatives reject this as well, as it would allow Obama to get what he wants, and what the country desperately needs. And I'm not sure McConnell is right that voters would blame Democrats for it. Ultimately, Obama would be able to make the case that it simply had to be done, and I'm really not sure this issue has political legs. What McConnell's idea reflects is the enormity of the pressure on the Republican leadership, at least in the Senate (there is pressure on Boehner in the House, to be sure, but, again, he is pretty much on his own now), to get something done, pressure coming from the GOP's corporate, Wall Street constituency. TNR's Jonathan Cohn explains:

Is Mitch McConnell panicking? It sure looks that way. The debt ceiling proposal he released yesterday afternoon confused pretty much everybody, including yours truly. But stripped to its bare essence it’s actually quite simple: Congress would give President Obama the authority to make good on the country’s debts, without imposing any binding policy constraints. This is, more or less, what Obama wanted originally and what Republicans have been saying they wouldn’t give him.

Perhaps McConnell is listening to business leaders nervous that Congress will leave the current debt ceiling in place, causing the U.S. to delay some government payments and potentially causing a financial crisis that could quickly spread around the world. Perhaps McConnell is watching the polls and noticing that voters don’t share his party’s aversion to taxes on the wealthy. Or perhaps it’s some combination of those and other factors. Whatever the reason, he’s clearly very worried. Otherwise he wouldn’t have made such an offer in the first place.

Of course, McConnell has designed his proposal so that it will inflict maximum political pain, or what he thinks will be maximum political pain, on the Democrats – by, among other things, forcing those who serve in Congress to vote to raise the debt ceiling. And who knows, it might work: Gaming out the possibilities is too complicated for me. But first McConnell must convince the rest of his party, particularly those who serve in the House of Representatives, to go along. And as of this writing that seems like it will be awfully difficult.

Yes, it might work, but I doubt it. And I also doubt that he'll be able to get the House on board. Boehner yes, the rest of the Republican caucus not so much, particularly with Cantor looming.

But the panic is understandable. Business is terrified. No one quite knows for sure what would happen were America to begin go into default and be unable to pay its bills, but it wouldn't be good and could potentially be apocalyptic. And, make no mistake, there's no way around it. Moody's has already put the country on notice. And that's far more worrisome (and far less funny) than when, say, Stephen Colbert puts someone or something on notice.

Republicans -- or at least the McConnells and Boehners of the party -- are in a tough spot, pretty much a no-win situation. Basically, Obama has skillfully, and amazingly, backed them into a corner. As TNR's Jonathan Chait explains:

If you told me last week that we might get a debt ceiling hike without Obama making policy concessions to Republicans, I wouldn't have believed you. What happened since then? Well, Obama called the Republicans' bluff. He turned the debate from a generalized question of cutting spending, where the public sides with Republicans, into a debate over specific policy priorities, where the public overwhelmingly supports the Democrats. Most people want a balanced package of revenue increases and spending cuts, in contradiction to the GOP's all-cuts-or-die stance. The public strongly favors higher taxes on the rich and strongly opposes entitlement cuts. Obama smoked out the GOP's actual policy choices. And he smoked out the Republicans' refusal to compromise on its unpopular priorities, establishing himself as the one party who was willing to make the kind of compromise that was the only plausible avenue to deficit reduction.

More recently, Obama said that if the debt ceiling is not lifted, he won't be able to send out Social Security checks. Imagine how that one would play out for Republicans. In general, he demonstrated yet again that it's very hard for Congress to win a public relations fight against the president. Meanwhile, the business lobby was no doubt pushing hard behind the scenes, and the business lobby usually wins.


I've been lambasting Obama's strategy pretty much on a daily basis. It appeared that Obama blundered into a hostage crisis he didn't need, and then wound up offering Republicans an absurdly generous deal, trading away major entitlement cuts in return for a pittance of revenue -- no higher than what will be raised if the Bush tax cuts expire on schedule.

So those were the options as of last week: A massive policy giveaway that won Obama some centrist credibility at immense substantive cost, or else let the economy get killed. Instead, Obama has reestablished credibility on the deficit at zero substantive cost. (He can always cut a deal without a gun to the economy's head.) Either the administration is run by pure political geniuses, or they're the luckiest sons of guns who ever lived.

Yes, the "worm" has indeed turned. I admire and respect the president's political skills enough to know that this was always a possibility, and I have thought it was throughout this whole process, but I didn't actually think it would turn out this way. Just a couple of days ago I was wondering why Obama was willing to give up so much to get a deal done, and I objected strenuously to his putting Social Security, Medicare, and Medicaid on the table -- again, pretty much willing to give Republicans what they wanted in exchange for a debt ceiling raise and possibly a relatively small revenue increase. I wondered why Obama wasn't calling the Republicans' bluff, why he continued to allow them to determine the narrative and set the parameters for a deal.

But then... we knew this was all politics, right? Here's what I wrote, sending that things, it seemed, were changing:

I do see what Obama's doing here. It's what he's done all along, from issue to issue. He's agreeing to concessions in the name of compromise and then taking the high road while Republicans dither over whether to make any concessions of their own. If they do, Obama can present himself as the guy who got it done, as a non-partisan leader who brought both sides to the table and put country before partisanship or ideology. Voters, and especially independents, seem to like that. If they don't, he can present them as extremist and obstructionist. This is what happened on health-care reform and it's what's happening now on the debt ceiling.


Obama has handled this whole issue badly and is now in a position of having to give up a lot just to get anything done. It didn't have to be this way. I call bullshit on much of what he's saying, but I really do hope he knows what he's doing.

Does he? Or has it just worked out that way? Well, nothing is worked out yet, and I still object to giving away so much, or to being willing to give away so much, but it looks like Obama may just triumph yet again over an opposition that, while generally extremist and obstructionist, is divided so deeply internally that it's almost about to cave in on itself.

No, no, I'm not getting ahead of myself. It's still possible that nothing gets done. Obama walked out of talks with Cantor et al. yesterday, perhaps more theater than anything else (he's the adult here, after all, and was probably just making a statement), and Alan Simpson is saying there's "no hope" of getting a deal done. But, politically, Obama now appears to have the upper hand -- he's winning, in other words, and you can tell that just from the way Republicans are acting, a mixture of resignation, frustration, and exaggerated outrage. They know they're losing, you see, and they don't quite know what to do.

Quite the turn of events.

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  • During the last Presidential election, CSpan2 Book TV aired a program where the author discussed the results of his or her research, which suggested that something like 5-10% of Democrats , and 5-10% of Republicans, essentially debated and defined the ideological constructs of each party. The point was that the vast, vast, vast majority of the citizens of this country have their lives dictated by the most active and vocal members of society, who also happen to be more privileged .

    I strongly suspect that the same thing is occurring with the debt ceiling debate. The debate is not really about the debt ceiling per se, but rather a very deep, long-standing debate about the role and size of government. It’s never been resolved, and never will be resolved in our representative democracy. However, in the mean time, the regular folks in our society run the risk of being irreparably damaged. The elites (the upper and upper middle socio-economic classes) on each side of the fence have theirs, their corporate contributions, decent jobs and income, and will fare just fine economically. It’s the ordinary citizens (lower middle socio-economic class) who will most likely get screwed, no matter which side ultimately prevails in the short term.

    By Blogger Inspector Clouseau, at 9:58 AM  

  • Republicans are losing the Independents. Their "my way or the highway approach" will cost them the house next election. The public does not like this radical teabag influence. Our government works because of compromise and will not work with one side refusing to ad-hear to that principle. Their plan for Medicare/SS is absurd. We should be trying to shore up the problems with our safety nets not tear them down. Congress should put both in a lock box where it cannot be used for for foreign aid, wars and occupations. Clean up the fraud by healthcare providers and lift the cap on all taxable income so SS/Medicare gets is fair share. Levy a 1% increase on both and employees/employer temporarily due to the baby boomer crisis.We only have this crisis because politicians misused the money. As an Independent I call on all to vote the tea baggers and radical right out next November.

    By Anonymous Anonymous, at 5:57 PM  

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