In the wake of a spate of polling and punditry suggesting Pres. Obama had gained the upper hand over Speaker Boehner and his tea bagger caucus in negotiations over the debt ceiling crisis, now comes word that the president intends to cede to a deal that favors Republicans.
In an editorial for USA Today published yesterday, the president said he agreed with a majority of voters, including a majority of Republicans, who want deficit reduction deal that includes tax increases as well as program cuts:
PRES. OBAMA: A balanced deficit deal that includes some new revenues isn’t just a Democratic position. It’s a position that has been taken by everyone from Warren Buffett to Bill O’Reilly. It’s a position that was taken this week by Democrats and Republicans in the Senate, who worked together on a promising plan of their own. And it’s been the position of every Democratic and Republican leader who has worked to reduce the deficit in their time, from Ronald Reagan to Bill Clinton.
What he did not say was that the only new revenue in the deal will come from allowing the Bush tax cuts on the wealthy to expire in December 2012, as they are set to do anyway. No loopholes for billionaires will be closed or corporate welfare reduced. Instead, the president will give in to Republican demands that the federal budget must be balanced on the backs of the middle class and the poor, including the gutting of Social Security and Medicare and trillions in cuts to federal programs.
All the tea baggers have to do is promise they won’t fight to extend the Bush tax cuts in December 2012. Of course, they won’t have to keep that promise if Mitt Romney or Rick Perry is elected president seven weeks earlier — an unhappy prospect that becomes much more likely if seniors, liberals and independents stay home on Election Day 2012 because Obama presided over the shredding of the nation’s safety net.
It’s not that entitlement programs don’t need to be reformed. They do — but the reforms should not be negotiated as part of a hostage deal, which is what is going on here. Republicans have been unequivocal from the start: If the president does not accede to their demands, they are ready and willing to bring the U.S. economy to its knees — again.
Never mind the fact that the reason the the debt ceiling must be raised is to accommodate the new levels of borrowing and spending in the budget these same Republicans passed. Never mind that Republicans in Congress voted to raise the debt ceiling seven times when George Bush was president — or that the ceiling has been raised over 70 times since the 1960s by both parties, without the other side resorting to extortion.
Never mind that this is a totally made-up crisis created by the tea baggers’ corporate sponsors for the express purpose of restructuring the U.S. economy to ensure that the middle class continues to become poorer while the super-rich get super-richer.
And never mind that in the 1980s, the tea baggers’ patron saint, Ronald Reagan warned that putting the United States into default “threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the Federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility – two things that set us apart from much of the world.”
Yesterday, the hostage takers added a new demand: They are now threatening to kneecap the economy unless the president agrees to kill the individual mandate, the key component of the Affordable Healthcare Act, also known as “Obamacare.” (Never mind that the mandate itself was originally a Republican policy developed at the right-wing Heritage Foundation.)
Meanwhile, two polls released on Thursday “>indicated support for a remedy that includes both cuts and revenues — and both suggested the public would blame Republicans if the deal falls through:
A CNN/ORC International poll found 64 percent of those surveyed would prefer to trim the deficit by both spending cuts and tax increases, while a Washington Post-ABC News poll put that proportion at 62 percent, up from 57 percent in June….
Over three-quarters of the Washington Post-ABC News poll felt the Republican Party had not been willing enough to compromise with Obama for a deal, up from 71 percent n March.
More than half of those surveyed by CNN/ORC said Republicans should be blamed if the debt ceiling was not raised, compared to 30 percent who felt Obama would be responsible.
And yet, even with the backing of public opinion, reports from Washington today indicate that Pres. Obama is ready to give into the hostage takers’ demands — a development that would defy credulity if there was not an unbroken line of precedents going back to Pres. Obama’s inauguration.
Since taking office in January 2009, Pres. Obama has sided with Republicans against his own party on every significant deal: He watered down the Stimulus (which caused it to produce fewer jobs, thus allowing Republicans to say it did not work), weakened provisions in the health-care reform law (which did nothing to stop their carping) and caved on Republican demands that the Bush tax cuts not be allowed to expire in December, thus further starving the Treasury and needlessly adding billions more to the deficit this year. (One wonders whether Osama bin Laden would still be alive, if that was the outcome Republicans had preferred.)
Here is the report from New York Times, followed by reaction and commentary:
Hours before the Congressional Democrats met with Mr. Obama, they had expressed alarm publicly to reporters that the emerging proposal seemed too reliant on deep spending cuts compared to new revenue. In private, some vented their criticism at Mr. Obama’s budget director, Jacob J. Lew, during a heated party lunch of Senate Democrats on Thursday.
“The president always talked about balance: there had to be some fairness in this, this can’t be all cuts,” said Senator Harry Reid, the Senate majority leader, as he left the meeting with Mr. Lew. “The caucus agrees with that. I hope the president agrees with that, and I’m confident he will.”
But the president and Mr. Boehner were moving ahead with their plan, aides said, trying to agree on matters like how much new revenue would be raised, how much would go to deficit reduction, how much to lower tax rates and, perhaps most critical, how to enforce the requirement for new tax revenue through painful consequences for both parties should they be unable to overhaul the tax code in 2012.
The White House wants a trigger that would raise taxes on the wealthy; Mr. Boehner wants the potential penalty for inaction to include repeal of the Obama health care law’s mandate that all individuals purchase health insurance after 2014.
The Bush tax cuts on the wealthy are set to expire anyway in 2012. If Congress does nothing, that’s what will happen by itself. So for that to be the big penalty hovering over the GOP seems pretty weak.
Weak, but at least it kind of makes sense. It means that one way or another, whether through an overhaul of the tax code or the triggering of the trigger, more tax revenues will be raised, ultimately giving debt reform a modicum of balance.
What makes no sense at all is that Boehner wants the trigger to be the repeal of the individual mandate, a vital component of the health-reform law passed last year. In other words, in Boehner’s proposal, if the GOP fails to agree to new tax revenues, it gets to destroy Obamacare. What the hell kind of incentive is that?…
Obama has a reputation for caving in as readily as a poorly built snow fort, but even he couldn’t accept such a counterproductive, undermining, and outright bizarre proposal … right?
Okay, let’s review here. Boehner is getting Obama to give him cover for extremely unpopular cuts to Medicare and Social Security that Republicans have no chance of enacting otherwise. Obama is getting Boehner to agree to higher taxes on the rich, which are wildly popular and scheduled to occur anyway. On top of that, Obama is agreeing to get this revenue not by restoring Clinton-era tax rates but by reforming the tax code, something Republicans claim to favor anyway.
And then, on top of that, Boehner is demanding that the penalty for failing to institute this reform include a completely unrelated demand to repeal the individual mandate. What kind of incentive is that?
I would say that Boehner is throwing out maximalist demands he knows will never be accepted in order to make his other extreme demands appear comparatively reasonable. But it’s getting harder and harder to identify a demand so extreme Obama can be assured of ruling it out of hand.
In their negotiations, both the White House and Speaker Boehner have played politics with their supporters by floating ideas meant to outrage their respective bases to see who howls the loudest. Boehner’s suggestion that loopholes on corporate jets might closed and that hedge fund gamblers might have to pay the same tax rate on their winnings that other investors do (35 percent instead of 15 percent) sent tea baggers into a full-on tizzy.
Conversely, when the president put cuts to Social Security and Medicare on the table both Democrats and independents reacted with shock and disbelief.
If the contest is to see which side howls the loudest, let’s hope the outcry from the left and middle America today is heard around the world — or at least inside the sound-proof walls of the Oval Office.
