Wednesday, April 13, 2011

Missed opportunities COST!

Alright, so it was decided that we wouldn’t fight on that last CR in March, and our leadership caved on the spending cuts deal to keep the government from shutting down Friday, so…now we’re going to FIGHT against raising the debt ceiling unless major concessions are met, right? Ummm…

Marc Thiessen, a former Bush speech writer, was on Hannity Monday talking about the shutdown fight and the coming debt ceiling fight:

“The difference between the government shutdown fight and the debt limit fight is that Obama has no leverage in the debt limit fight. Obama’s weapon in this fight was he could shut the government down. He would use his veto to veto a temporary spending measure. He will not veto a temporary increase in the debt limit. So he has no weapon.”

If Theissen is correct that this is Boehner’s strategy going into the debt ceiling battle to leverage “major spending reductions in the trillions or maybe the Balanced Budget amendment like the one Senate Republicans are backing, then I think people might be willing to overlook the failed promise of the 2011 budget” then good! But the way the leadership conducted the shutdown battle, my expectations are low that they’d even employ such strategy when faced with being blamed for defaulting, and the Democrats, as well as the media intelligentsia, bank on that. Boehner further arms the Democrats, and the media, the same way as before: then it was “we’re not going to allow a government shutdown”, and now it’s “we’re not going to risk defaulting on our debt obligations”. Stop showing them your hand, Speaker!

CNS News goes one step further, and informs us precisely how Friday night’s ‘deal’ has ensured an increase in the debt ceiling:

Last week, the Republican House leadership agreed to a deal with President Barack Obama and Senate Majority Leader Harry Reid (D.-Nev.) to spend $3.7555 trillion in this fiscal year--even though at the close of business Friday, as the deal was being struck, the Treasury reported that it could borrow only an additional $80.85 billion before hitting the $14.294-trillion debt limit Congress set last year.

In the first six months of this fiscal year (Oct-March), according to the Treasury, the debt increased $708.492 billion. Even if you subtract $38.5 billion from that number—to account for the $38.5 billion Republicans say the new spending deal will cut from the current annual federal spending level—the federal government would still be on a pace to increase the debt by about another $670 billion in the remaining six months of this fiscal year.

Simply put: To consummate the spending deal the Republican House leaders cut with Obama and Reid on Friday, the Republicans would need to lift the debt ceiling by hundreds of billions just to let the government borrow the money the Republicans have already agreed to let the government spend between now and Sept. 30.

Friday night’s deal teetered on much more than the differences between $38.5B and $61B, or even $100B for that matter! And as that fight was pushed to the 11th hour with much grandiose and fanfare, but with little reward, this battle will assuredly follow the same 11th hour path…let’s just hope the rewards are far better. When Speaker Boehner says, "Tax increases are unacceptable and a nonstarter…We don't have deficits because Americans are taxed too little, we have deficits because Washington spends too much," he’s correct. But simply agreeing not to raise taxes should go without saying and not be ‘the’ leverage.

Quite frankly, they should raise the stakes and kill two birds with one stone: Agree to raise the debt ceiling to cover this year’s deficits, if Ryan’s budget proposal can be passed and implemented! That’s much better than an empty promise of spending cuts that don’t materialize.

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