Sunday, July 24, 2011

The politics of the debt ceiling crisis: How it's still Obama's issue to lose

The debt ceiling crisis has become more about politics than policy. Actually, it's become a game of chicken -- all thanks to the Republicans. The only question is, which side will swerve out of the way first.

Well, sort of.

President Obama and the Democrats have proven again and again that they're serious about averting imminent economic catastrophe by reaching across the aisle in search of compromise. To that end, they've been willing to give up a lot. The same has obviously not been true of Republicans.

Indeed, while Republicans refuse to budge on taxes, on sufficient revenue increases to make getting America's fiscal house in order possible, the president -- the adult in the room -- has indicated that he's willing to agree to massive spending cuts, including to Social Security and Medicare, much to the frustration (to put it mildly) of progressives and much of the Democratic base.

On the policy, in my view, Obama has been less than admirable. On the politics, though, he has been typically awesome, successfully turning the tables on the Republicans and backing them into a corner. Polls show that the American people blame the Republicans far more than they do the president for the debt ceiling fiasco, and I suspect Obama has been willing to give up so much largely because he has realized all along that he'd never actually be able to get a deal done. In this sense, he has successfully positioned himself as the sort of centrist, the sort of serious deficit-fighter, independents, not to mention the Beltway media, like (and want to vote for). Meanwhile, the Republicans look like a gang of extremists wielding unreasonable demands and petulantly threatening to pull the country into the abyss if they don't get their unreasonable way.

This is all happening quickly, but what's clear is that the Republicans have gotten desperate, hurling smears at Obama that bear no resemblance to reality whatsoever. He a tax-happy socialist, they scream. Well, no, he's willing to agree to a deal that would slash trillions in spending with only minimal revenue increases. He's not at all serious about cutting spending, they shriek. Wrong again. Look at what he's been proposing. The facts are clear.

Ultimately, Obama will find some way to increase the debt ceiling. He has to. And the Republicans know it, not least because their corporate, Wall Street backers are demanding that it be done, just as it's always been done. But that doesn't mean they won't try to win the issue politically, and that's what's going on now. They're trying to turn the tables back on Obama, trying to back him into a corner, trying to make him take the fall if a deal doesn't get done.

Speaker Boehner is now saying he wants a deal done by today. Okay, but where's he been all along? Clearly, this is posturing. And it would appear that what he wants is a two-stage deal:

House Speaker John Boehner (R-Ohio) is set to call the Democratic Party's bluff on the debt ceiling. The Ohio Republican, in a briefing with his conference on Saturday, announced that he would press for a short-term deal, with major spending cuts paired with longer-term deficit-reduction strategies, as a way around the current impasse.

That strategy puts the speaker directly at odds with the White House and allied Democrats, who have insisted for weeks that they would not support a short-term extension of the debt ceiling. The president went so far as to dare House Majority Leader Eric Cantor (R-Va.) to test his opposition to a temporary deal during a tense meeting more than a week ago.

Whether that rigidity will fade as the Aug. 2 deadline to raise the debt ceiling nears is a big gamble on Boehner's part. 

Now, it's possible that, faced with that deadline (and with the possibility of economic catastrophe), Obama and the Democrats will cave. But thus far they've been firm in their staunch opposition to a short-term deal. As Senate Majority Leader Harry Reid clarified yesterday:

I want to reaffirm my statement from last night. I will not support any short-term agreement, and neither will President Obama nor Leader Pelosi. We seek an extension of the debt ceiling through at least the end of 2012. We will not send a message of uncertainty to the world.

The Republicans are obviously hoping they can pin the blame on Obama and the Democrats for the collective failure to get something done. Whether or not they sign on to Boehner's plan, Republicans can and will accuse them of being the real obstacles to a more substantive deal. In other words, they hope they can win the spin. It may be entirely dishonest, but you know they'll do it. Because it's pretty much all they've got left.

In my view, Obama and the Democrats need to stand firm. If Boehner is calling Obama's bluff, then Obama needs to call Boehner's. The president has public opinion on his side and can go with the constitutional option to raise the debt ceiling. And, of course, he has the bully pulpit, not to mention his own phenomenal political skills, and can make his case far better than the Republicans can theirs. (And, what's more, Republicans are still deeply divided on the issue, with the Tea Party right opposed to compromise and the establishment, with the party's financial backers behind it, understanding that a debt ceiling increase is absolutely necessary. The president should exploit this division as much as possible.)

In other words, don't let the Republicans define the issue and get their way. It's as simple as that. I'm not sure I have all that much confidence that Obama and the Democrats will actually stand their ground, but they'd be crazy not to take advantage of their current position and keep up the pressure on the Republicans. The issue, politically speaking, is theirs to lose.

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