The debt limit: wheeling and dealing in Washington

Don't be in too much of a hurry to condemn Senator McConnell and others on the Republican side of the aisle for what many are seeing as a 'cave-in' to President Obama and/or the Democratic Party agenda. Things are a lot - a whole lot - more complicated than that, as the Wall Street Journal explained today.

Republican Senate leader Mitch McConnell said yesterday he's concluded that no deal to raise the debt ceiling in return for serious spending restraint is possible with President Obama, and who can blame him? We've never thought the debt ceiling was the best leverage for a showdown over the entitlement state, and now it looks like Mr. Obama is trying to use it as a way to blame the GOP for the lousy economy.

This may have been the President's strategy all along: Take the debt-limit talks behind closed doors, make major spending cuts seem possible in the early days, but then hammer Republicans publicly as the deadline nears for refusing to raise taxes on business and "the rich."

. . .

The reality is that Mr. Obama is trying to present Republicans with a Hobson's choice: Either repudiate their campaign pledge by raising taxes, or take the blame for any economic turmoil and government shutdown as the U.S. nears a debt default. In the former case Mr. Obama takes the tax issue off the table and demoralizes the tea party for 2012, and in the latter he makes Republicans share the blame for 9.2% unemployment.

This is the political context in which to understand Mr. McConnell's proposal yesterday to force Mr. Obama to take ownership of any debt-limit increase. If the President still insists on a tax increase, then Republicans will walk away from the talks.

There's more at the link. Very interesting and recommended reading if you want to understand the present situation in Washington.

Let's be real clear on what's happening right now. It can be summed up in three short points.

1. President Obama and the Democratic Party have boosted state expenditure from 19-20% of GDP to 24-25% of GDP, solely on the basis of borrowing.
2. They now want to 'institutionalize' that level of spending, by raising taxes to a level that (they hope) will support it in future.
3. They're using the debt as an excuse to raise taxes, but in reality, once raised, they intend to ensure that those tax levels never go down again, so that they can fund their socialist-wet-dream welfare state.

That's the fight currently being waged in Washington. I don't think the Republican Party can hold the line on the debt limit, solely because they don't have the votes to do so in the Senate, and they can't override a Presidential veto of a minority position. That may change in 2012 - at least, let's hope so. On the other hand, if they vote for any tax increase, the Republicans will have shown clearly that they're as untrustworthy as the Democrats in that regard. In that case, it'll be time for the rest of us to throw out everybody in power, and elect new Representatives and Senators who'll be more attentive - and obedient - to the will of their constituents.

Here's what the inimitable Peggy Noonan had to say about the negotiations.

Politicians! Grrr!

Peter