Monday, January 31, 2011

Should Be Easy

First, it was John Boehner, who on January 6 said

that any move to increase the United States' $14.3 trillion debt limit must be accompanied by spending cuts.

"The American people will not stand for such an increase unless it is accompanied by meaningful action by the President and Congress to cut spending and end the job-killing spending binge in Washington," Boehner said in a prepared statement.

Later that day, House Budget Committee chairman Paul Ryan of Wisconsin acknowleged the same. MSNBC reported

Some conservative Republicans have urged their GOP colleagues to resist raising the ceiling -- which currently clocks in at $14.3 trillion -- under any circumstances. Rep. Michele Bachmann of Minnesota is collecting signatures on her PAC's website "to force our elected officials to stop spending cold turkey," and Sen. Jim DeMint of South Carolina has advocated for a "big showdown" with Democrats by blocking the raise.

But House Budget Chairman Rep. Paul Ryan says that tactic isn't viable. "Just refusing to vote for it, I don't think that's really a strategy," he said, noting that a failure to raise the ceiling could result in the nation defaulting on its debts to investors.

"Will the debt ceiling be raised? Does it have to be raised? Yes," he said at an event sponsored by economics21 and the Manhattan Institute at the National Press Club Thursday.

Sunday, Speaker Boehner told Chris Wallace on GOP News Sunday that defaulting on the debt

would be a financial disaster not only for our country, but for the worldwide economy. Remember, the American people on Election Day said we want to cut spending and we want to create jobs. You can't create jobs if you default on the federal debt.

Listen, there has been a spending spree going on in Washington these last couple of years that is beyond control, and if the president is going to ask us to increase the debt limit, then he's going to have to be willing to cut up the credit cards. We've got to work together by listening to the American people and reducing these obligations that we have.

Asked by Wallace whether "defaulting on the full faith and credit is unacceptable," Boehner replied "I don't think -- I don't think it's a question that is even on the table."

Boehner and Ryan, inarguably the two most important Republicans in the chamber their party controls, have made it clear that, in the end, they would support raising the debt ceiling. They advocate doing so as spending is cut, but evidently would not balk at raising the ceiling even if it is not accompanied by spending cuts.

No doubt the President also fears defaulting on the debt. Still, in his State of the Union message (transcript here), the President who decided to jack up the deficit by $900 billion over the next two years declared his allegiance to cutting that deficit by cutting spending:

Now, most of the cuts and savings I've proposed only address annual domestic spending, which represents a little more than 12 percent of our budget. To make further progress, we have to stop pretending that cutting this kind of spending alone will be enough. It won't. (Applause.)

The bipartisan fiscal commission I created last year made this crystal clear. I don't agree with all their proposals, but they made important progress. And their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it -- in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes. (Applause.)

This means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. The health insurance law we passed last year will slow these rising costs, which is part of the reason that nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit. Still, I'm willing to look at other ideas to bring down costs, including one that Republicans suggested last year -- medical malpractice reform to rein in frivolous lawsuits. (Applause.)

To put us on solid ground, we should also find a bipartisan solution to strengthen Social Security for future generations. (Applause.)

The GOP is determined- short of opposing raising the debt ceiling- to cut spending and starve government, thereby "drowning it in the bathtub," as Grover Norquist once put it. Obama, meanwhile, is committed, at least rhetorically, to trim the deficit in the short-term, notwithstanding the disastrous impact that could have on the economic recovery. And he is not hesitant to link Social Security, in the black with its dedicated source of funding, to the deficit, to the delight of the GOP and the mainstream media. All this is being done as Americans paid the lowest level of (state,federal, and local) taxes in 2009 (the last year for which full figures are available) than we have since the Truman presidency.

Late in 2010, President Obama engineered a deal that extended the Bush tax cuts on upper-incomes, arguing, generally, "the devil made me do it," that had he not gotten an extension of unemployment benefits, the Republicans in the next Congress would have extended the tax cuts without aid to the unemployed. No argument here about the devil, though Obama's failure to rein in budget-busting breaks for the wealthy while enjoying a Democratic-controlled House and Senate seemed a little too convenient.

Or maybe, to be generous, it was the best deal he could get. Now however, we know the best deal President Obama can get, and one he can get: the debt limit goes up, thereby assuring world markets and keeping government from shutting down. And he can get it with no cuts in spending. None. I could tell you whether he's going to achieve this or instead pull the rug out from under his own party, but then in early autumn, I thought the Baltimore Ravens would win the Super Bowl. So we can only wait.

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