The Debt Crisis and President Obama

"When (President Obama) speaks on the debt negotiations, he is not only extremely boring, with airy and bromidic language—really they are soul-killing, his talking points—but he never seems to be playing it straight. He always seems to be finagling, playing the angles in some higher game that only he gets. In two and a half years he has reached the point that took George W. Bush five years to reach: People aren't listening anymore. ...... He's like a walking headache. He's probably triggering Michele Bachmann's migraines”. Peggy Noonan

The debt crisis deepens, as talks between the President and the House Speaker have broken off. Is this really a crisis, or it simply political brinksmanship? Probably both.

In an overly simplified way, most Republicans want to see deep spending cuts coupled with raising the debt limit, and they want this without any increase in taxes. Most Democrats want to solve the deficit/debt problem by increasing revenue ( increased taxes) without deep cuts to cherished programs. The retooling of expensive entitlement programs like Medicare and Social Security are part of the conversation.

Compromise, or some combination of the above, is immediately met with angry opposition from each party’s base. The old days of enforcing party discipline (think Lyndon Johnson) do not fit Speaker Boehner’s style. And as Peggy Noonan makes clear, the Presidents narcissistic need to be front and center is only making things worse.

The “gang of six”, a group of three responsible liberal Democrats and three responsible conservative Republicans have worked on a compromise deal for several months. It has been called “flawed”, but it will not be possible to get some kind of deal that is not so labeled. The greatest virtue of the plan is that it bypasses ideological differences, and removes class-warfare resentment

So where are we today?

The President insists on tax increases; this difference over tax revenue has resulted in the breakdown in negotiations, in which Speaker Boehner broke off talks with the President and will now deal with the Senate.

Both sides are engaged in cataclysmic language, sometimes bordering on the demagogic. Regarding Republican House leader Eric Cantor, Ruth Marcus says "To understand Cantor, think Macbeth with all the vaulting ambition and none of the accompanying guilt." Cantor as the murderous King?

For his part the President has been warning our.senior citizens that “he couldn't guarantee that $20 billion in Social Security checks will go out on Aug. 3, the day after the government would go into default if it doesn't raise the debt ceiling. There may simply not be the money in the coffers to do it,"

As Thomas Saving has pointed out, “This statement completely overlooks the existence of the Social Security Trust Fund. Moreover, government redemption of the bonds in that trust fund does not breach the debt ceiling”.

However, the President sees this as an opportunity to present himself as a moderate, a centrist who favors spending cuts (in addition to tax increases) over the objections of his party. This way he hopes to appeal to both sides, great preparation for his reelection campaign in 2012.

But George Neumayr, writing in the American Spectator, says that the President “ plays the innocent bystander who strolls up to a crash he caused and asks to help. " According to Neumayr, and to most Republicans, the crisis was created by Obama's overspending. However, the same crisis is now being used as a pretext for new taxes

And to further complicate things for the President, Republican Senator Mitch McConnell has proposed a plan that gives Obama the authority to lift the debt ceiling without having to work out any compromise. This would prevent a default, but would also result in Obama owning the problem. He would be held responsible for all the factors that caused a need to raise the debt limit. Further, with this plan, no tax increases would need to be accepted

The deadline to raise the U.S. $14.3 trillion debt ceiling is just 10 days away President Obama is summoning the leaders of both parties to the White House in a last ditch effort to solve this problem. Speaker Boehner is speaking to the Senate. And Peggy Noonan says the President needs to get out of the way. Her piece is required reading.

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