Obama’s Big Mistake

In May President Obama should have made a forceful, definitive statement:

“There is some talk about making an increase in the debt ceiling a partisan fight.    That is unacceptable.   The debt ceiling is not about authorizing new spending, but about paying for what Congress already authorized.   If Congress doesn’t want the money spent, they should not put it in their budget — they cannot have their cake and eat it too.     The debt ceiling has been routinely raised whenever we need to borrow more to pay the bills run up by Congress.   President George W. Bush raised it seven times; President Reagan raised it 17 times.

So let me be clear.   I will only accept a clean increase in the debt ceiling.  I will not negotiate on this point, and I will veto any bill that attempts to connect the debt ceiling to other issues.   That would be playing Russian roulette with the American economy, allowing partisan bickering to put at risk our low interest rates, good credit rating and economic recovery.   However, this summer I call on Republicans to join me for a serious discussion on the future of the budget, with the goal of serious deficit reduction as soon as possible.   However, I will not tie that to the debt ceiling, or accept any legislation which does.”

Such a statement, clear and forthright early on in the process could have altered the way in which this discussion has played itself out.   First, real talk on budget cuts could be proceeding without an arbitrary deadline that does not leave time to really think about the implications of perhaps trillions of dollars of cuts in coming years.  Second, America’s economy would be safe from the severe consequences of default.   Finally, the US would not be in a position where the party in the majority in one of the chambers of Congress could use the potential for economic crisis as a way to ram its narrow agenda through.    The Republicans in the House are literally holding the US economy hostage.  It should never have come to this.

President Obama, by deciding he could negotiate and perhaps use this issue to pressure Democrats into accepting cuts, walked into a trap.   It is a trap that goes beyond him personally.   This sets the precedent for a party that does not have the votes to get something done through the usual process to find a way to use threat of real disaster to dictate their agenda to the rest of government.   Rather than trying to win in 2012 (both the Presidency and the Senate will be in play), they want to put a gun to the nation’s head and dare the Senate and President not to give in to their demands.

I’d expect that in a third world state or an emerging democracy in the former Soviet Union, but not in the US.  If politics sinks to this level, then the US is truly in severe decline.    Former Presidential standard barrier for the GOP John McCain lashed out at the House “tea party” Republicans, claiming they were irresponsible and in his words “bizarro.”  Other Republicans have also expressed horror at the events unfolding.   As Senate Majority Leader Harry Reid said, the GOP needs to go back to being the party of Ronald Reagan.   Reagan was an optimist who worked with people to convince them to go along with him.   The current gang in the House are bitter and angry, and want to use threats to get their way.

Speaker Boehner is an enigma.    The most friendly read on his tactics is he simply wants to strengthen his hand and show the tea party brigade that he’s fighting to get the most he can get.   Then when a compromise comes, enough Republicans will join with Democrats to pass it, even if the tea party folk demur.    But to do so in this manner and with this level of incompetence (you don’t announce a plan on national TV when you aren’t sure you have the votes) not only damages the country but hurts his own party — and his chance at keeping his majority.    He may really think he can ram this through, in which case he’s putting the dreams of the American people on the line.

It would be irresponsible for President Obama to give in on this, even if it means default.   The President simply cannot allow the House to dictate policy under threat of disaster.   If he gives in, then the political game sinks to a new low and could get much uglier down the line.   He should have never let it get to this point.

It’s probably too late to demand a “clean” debt ceiling vote.   He’s publicly urged compromise and it would seem erratic to shift now.   But it’s not too late to draw a new line in the sand and mean it.   Compromise that is bi-partisan means something that gets significant support from both parties.   That can happen, and I suspect will — though one gets the sense that process is getting a bit out of control and the principles aren’t really sure where its going.

When a compromise is finally reached, on signing President Obama must harshly condemn the whole spectacle as being an embarrassment to the American people.    He must take his share of the blame, and state that never again will he be party to some negotiation tied to an issue like the debt ceiling.   He must say in late July or early August what he should have said in May.    The US economy cannot be held hostage so that one group can get its way.    That is a threat to the very foundation of our democracy.   They should go through the normal legislative process, including making it an issue in the next election.

President Obama made a mistake opening the door to allow the issue to be used this way.  He must slam it shut, and refuse to open it again, not even a crack.

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  1. #1 by classicliberal2 on July 29, 2011 - 18:37

    “I’d expect that in a third world state or an emerging democracy in the former Soviet Union, but not in the US. If politics sinks to this level, then the US is truly in severe decline.”

    Politics have been at this level for years; it’s just that it’s only now starting to be noticed. The word-count on all the writing I’ve done on this over time must be astronomical. What’s happening now is merely a continuation of what’s been happening with, for example, the filibuster. Since 2006, when Republicans lost congress, they’ve used the filibuster against almost everything the Democrats have put before them. That “almost everything” isn’t hyperbole–it’s literal. With the exceptions of some stories in the print press and the yowlings of nobody bloggers like me, it has just been allowed to continue. The corporate press refuses to scandalize this behavior, or even to mention it. Republicans filibuster everything, won’t confirm Obama’s executive or judicial nominees, repeatedly try to defund government offices they don’t like but don’t have the votes to abolish, and on and on and on. Over in the House, they have spent most of their time on vacation, and, when at work, trying to pass what is kindly described as “symbolic” legislation–legislation which has absolutely no chance of either making it through the Senate or ever being signed into law, and is just a complete waste of time. Even in the midst of this debt “crisis”–a crisis they, themselves, have manufactured, and can end at any moment–they’ve been wasting their time with one “symbolic” bill after another, rather than trying to reach any “compromise,” because, of course, they aren’t interested in a compromise. They’re interested in destroying Obama and the Democrats, and in getting their way, whether America likes their way or not.

    And then the wonderful U.S. corporate press, instead of explaining this or scandalizing it, blames the “partisan rancor” of both sides for the “crisis” (that’s what I was writing about over on my blog the other day, in fact).

    “Former Presidential standard barrier for the GOP John McCain lashed out at the House ‘tea party’ Republicans, claiming they were irresponsible and in his words ‘bizarro.’”

    Yes, but the far right–which is the proper label, not “tea party”–holds such sway over the party that McCain did a 180 on that almost immediately, backtracking on every criticism he’d offered.

    “It would be irresponsible for President Obama to give in on this, even if it means default. The President simply cannot allow the House to dictate policy under threat of disaster.”

    It’s good to see you’ve come to this conclusion, Scott. Everything you said in this vein is pretty much dead-on (and I don’t just say that because it’s what I’VE been saying all along, either). The Obama should have never allowed Republicans to pull this. And, as much as I despise the Obama–“despise” is the right word for it–and as much as he is to blame for allowing things to get this far, I think the corporate press is even more responsible.

  2. #2 by Ron Rouintree on July 29, 2011 - 19:20

    I agree that should have been the opening and closing position. However, we have now learned and confirmed that there is no negotiating with a certain segment in the House. The House leadership must now consult directly with the Senate leadership and go for a straight up or down vote, if it goes down. The President will have to take a path now one wants, invoke the 14th.
    The downside is the credit rating will take a heavy hit. The blame will fall on all, the Tea Party will be declared heroes for standing on “principle”, and their seats will be safer than ever.

    • #3 by classicliberal2 on July 29, 2011 - 21:48

      “However, we have now learned and confirmed that there is no negotiating with a certain segment in the House.”

      That’s not a new revelation. I switched my Left Hook site over to a blog in the immediate aftermath of Obama’s election, and, rereading the early entries now is a rather depressing exercise. Before the Obama had even been sworn in, I had already mapped the likely course of his administration and its relationship with the Republicans, and one would think I’d had the assistance, in the task, of a crystal ball possessed of genuine magical properties. Some nobody on the internet can see these things, but none of the alleged professionals in this administration could.

      “The blame will fall on all, the Tea Party will be declared heroes for standing on ‘principle’, and their seats will be safer than ever.”

      If there was a genuine default, the far right–and that’s the proper designation, not “Tea Party”–would be crucified for what happens after. I still don’t think there’s any chance the Big Money that controls both parties will allow for a default, though (unless they come up with some way to make it profitable).

  3. #4 by Black Flag® on July 29, 2011 - 20:44

    10 points for anyone who knows who said these words:

    The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure.

    It is a sign that the U.S. Government can’t pay its own bills.

    It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

  4. #5 by Black Flag® on July 29, 2011 - 20:45

    On March 16, 2006, the day of the vote, Senator Obama gave a speech against raising the debt ceiling

    But the Grand Pragmatist Scott will flick this hypocrisy away with the words “that was then, this is now and no principle can stand in the way of political progress!”

    • #6 by classicliberal2 on July 29, 2011 - 21:17

      Politically posturing over the debt ceiling in that empty manner is standard operating procedure for both parties. The context in which it always happens is one in which raising the debt ceiling is a foregone conclusion. IOW, it has no bearing on the present situation.

      • #7 by Scott Erb on July 29, 2011 - 21:42

        True — yet he does say he regrets that vote. In any event, argumentum ad hominem (which remains a logical fallacy) is irrelevant to the point at hand.

  5. #8 by brucetheeconomist on July 30, 2011 - 03:37

    I wonder if Obama, if he cares more about the country than himself, will have go ahead and borrow, and set off a constitutional crisis. It seems to me Congress has given a set of laws that he can’t fully execute: pay for abc; don’t tax for abc; don’t borrow for abc. As such he has to not carry out some laws. No???

  6. #9 by mikey on July 31, 2011 - 07:00

    No. It means he has to get rid of all the parasites sucking money out of the system under the table – starting with POTUS and everyone in Washington making constant trips and vacations all around the world with their families, on the taxpayer’s dime….

    Aside from that, if Obama ‘cares more about the country than himself’ he never would have ran for president, since it’s been obvious from the start that he’s totally unqualifed for the job.

    • #10 by Scott Erb on July 31, 2011 - 10:11

      Well, compared to the last President, Obama has done pretty well! I admit, that’s setting the bar low. Still, it’s interesting that debt and deficits ultimately went up the most under Reagan (from 30% of GDP to 60% of GDP) and Bush (most increases now are still due to Bush era policies – Bush the younger), while ultimately Clinton got the budget balanced and made cuts, and Obama is talking about historic cuts. I have a feeling you’re going to be proven wrong by history.

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