Beware Grand Budget Deals

Jonathon Chiat at the liberal New Republic is scratching his head.  How can President Barack Obama so quickly concede to Republicans that a debt ceiling increase will be accompanied by budget concessions? 

Chiat writes:

... I don't understand what President Obama is thinking here. First, he's allowed Republicans to turn the debt ceiling into an opportunity to wrench policy concessions, something that has never happened before. If he announced from the outset that debt ceiling votes have never been bargaining chips for policy changes, and that he would only sign a clean debt ceiling hike, and any failure to raise the debt ceiling is the GOP's responsibility, do you think Republicans could stand up to pressure from business? I don't. But we'll never know because Obama gave up that leverage immediately.

Is the president bungling politically?  Might be.  However, the president could simply be making an unwelcome but necessary nod to political reality.  Even Chiat acknowledges that a strong plurality of voters oppose raising the debt ceiling on the simple premise that politicians -- like bad credit risks -- tend to spend up to the higher limits every time.  And as Mark Steyn writes at National Review Online, when do consumers get to set their own borrowing ceilings?  Isn't that the prerogative of lenders?  Voters are becoming savvier about the debt ceiling scam.   

President Obama and his political team see how the winds are blowing on the debt ceiling issue and are making adjustments politically.  The president has also taken the measure of congressional Republicans, calculating that GOP leaders talk hard but negotiate soft. 

In other words, if the 2011 budget agreement is any indication -- and let's hope not -- Speaker Boehner and Minority Leader McConnell will give much away in the name of some bipartisan agreement to clean up the Democrats' fiscal mess.  Mr. Obama benefits politically from the perception that he's cooperating in paring down the federal budget and tightening spending while doing very little of either.  It would be a ruse for witless Republicans that gives Mr. Obama political cover going into 2012. 

In fact, Chiat quotes Mitch McConnell from a Washington Post story

McConnell said he views the debt-limit debate as a critical opportunity for the parties to work together to accomplish something that would otherwise be impossible politically.

"If there is a grand bargain of some kind with the president of the United States, none of it will be usable for either side in next year's election - none of it," McConnell said. "We can do something important for the country together, and this is the opportunity."

It could be that Mr. McConnell is just throwing some rhetorical chafe in the name of a "grand bargain" to cover GOP aims to push significant reforms and budget cuts, as Chiat fears.  But it could also be that McConnell means what he says, which should make taxpayers reach for their wallets. 

Republican Senators Tom Coburn (Oklahoma) and Saxby Chambliss (Georgia) are part of the "Gang of Six" effort in the Senate to reach a comprehensive budget deal with Democrat counterparts.  Any deal is all but sure to include revenue enhancements -- known to most plain-talking Americans as tax hikes.

A grand bargain between Democrats and Republicans that falls short of significant policy reforms, hefty budget cuts, and no new or increased taxes is a loss for hardworking Americans -- and a pretty dumb political fumble by Republicans.
Jonathon Chiat at the liberal New Republic is scratching his head.  How can President Barack Obama so quickly concede to Republicans that a debt ceiling increase will be accompanied by budget concessions? 

Chiat writes:

... I don't understand what President Obama is thinking here. First, he's allowed Republicans to turn the debt ceiling into an opportunity to wrench policy concessions, something that has never happened before. If he announced from the outset that debt ceiling votes have never been bargaining chips for policy changes, and that he would only sign a clean debt ceiling hike, and any failure to raise the debt ceiling is the GOP's responsibility, do you think Republicans could stand up to pressure from business? I don't. But we'll never know because Obama gave up that leverage immediately.

Is the president bungling politically?  Might be.  However, the president could simply be making an unwelcome but necessary nod to political reality.  Even Chiat acknowledges that a strong plurality of voters oppose raising the debt ceiling on the simple premise that politicians -- like bad credit risks -- tend to spend up to the higher limits every time.  And as Mark Steyn writes at National Review Online, when do consumers get to set their own borrowing ceilings?  Isn't that the prerogative of lenders?  Voters are becoming savvier about the debt ceiling scam.   

President Obama and his political team see how the winds are blowing on the debt ceiling issue and are making adjustments politically.  The president has also taken the measure of congressional Republicans, calculating that GOP leaders talk hard but negotiate soft. 

In other words, if the 2011 budget agreement is any indication -- and let's hope not -- Speaker Boehner and Minority Leader McConnell will give much away in the name of some bipartisan agreement to clean up the Democrats' fiscal mess.  Mr. Obama benefits politically from the perception that he's cooperating in paring down the federal budget and tightening spending while doing very little of either.  It would be a ruse for witless Republicans that gives Mr. Obama political cover going into 2012. 

In fact, Chiat quotes Mitch McConnell from a Washington Post story

McConnell said he views the debt-limit debate as a critical opportunity for the parties to work together to accomplish something that would otherwise be impossible politically.

"If there is a grand bargain of some kind with the president of the United States, none of it will be usable for either side in next year's election - none of it," McConnell said. "We can do something important for the country together, and this is the opportunity."

It could be that Mr. McConnell is just throwing some rhetorical chafe in the name of a "grand bargain" to cover GOP aims to push significant reforms and budget cuts, as Chiat fears.  But it could also be that McConnell means what he says, which should make taxpayers reach for their wallets. 

Republican Senators Tom Coburn (Oklahoma) and Saxby Chambliss (Georgia) are part of the "Gang of Six" effort in the Senate to reach a comprehensive budget deal with Democrat counterparts.  Any deal is all but sure to include revenue enhancements -- known to most plain-talking Americans as tax hikes.

A grand bargain between Democrats and Republicans that falls short of significant policy reforms, hefty budget cuts, and no new or increased taxes is a loss for hardworking Americans -- and a pretty dumb political fumble by Republicans.

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