Tick, tick. August 2nd is the Debt Limit Armageddon. Or Not.

GOP wants Obama's unconditional surrender

Washington (CNN) -- In this debt-ceiling fight, I'm having horrible flashbacks to the Republican debacle over health care.

Then as now, what could have been a negotiated deal turned into all-out political war.

Then as now, Republicans rejected all concessions by the president as pathetically inadequate.

Then as now, Republicans refused any concessions of their own, instead demanding that the president yield totally to their way of thinking.

Then as now, Republicans convinced themselves that they had the clout to force the president to yield.

With health care, Republicans calculated spectacularly wrong. They pursued an all or nothing strategy and got -- nothing. They neither shaped the bill, nor did they stop it.

Will they make the same mistake again on the debt ceiling?

We don't know the exact shape of the offers President Obama has made inside the negotiating rooms. Republicans tell friendly journalists that the president has been highhanded and long-winded.

Perhaps.

But the president has gone on television to declare himself willing to consider some startling moves: alterations to Social Security cost-of-living formulas, raising the age at which retirees qualify for Medicare, and large dollar figures for deficit reduction over the next decade.

On background, administration briefers have talked about a package consisting of 85% spending cuts and 15% revenue increases. And, they said, they wanted only the kinds of revenue increases least obnoxious to Republicans: changes in deductions and tax credits -- not increases in overall tax rates.

Republican briefers say that the Democrats are exaggerating their offer. They say the Democrats were less conciliatory inside the room than outside.

Again: perhaps.

But it would be remarkable, wouldn't it, for a president to say on TV that he was willing to do something as unpopular as raise the Medicare age -- and then say in secret: Nah, I'll do the popular thing instead. Wouldn't you expect the behavior to be the other way around?

I think we have enough information to draw a very different picture of what happened.

Obama offered Republicans a lot of spending cuts if only they would move even slightly to meet him. But Republicans took the view that any change in current tax rules must be offset by an equal or greater cut in some other tax. Republicans would not agree to alter even the silliest parts of the tax code in ways that raised more revenue. The only deal they would contemplate is one that was 100% spending cuts, 0% tax increases -- that is, all their own way, total surrender by the president.

Unconditional surrender was the Republican demand in the health care debate. That demand led to an unmitigated defeat.

Unconditional surrender has become the Republican demand in the debt demand.

The original Republican plan was to threaten to tip the country into default unless the GOP got everything it wanted. That threat is proving empty, as Republicans' business constituencies mutiny against their party's dangerous tactics.

If blackmail won't work -- and negotiation is not allowed by the party's own taboos -- then the party that asked for everything is on its way to becoming the party that got nothing. Only it's not just the GOP that is the loser. It's the whole country.

As described by McConnell at a news conference last week, his legislation would authorize the president to request of Congress debt ceiling increases in three increments between now and the end of next year. The first would boost the debt limit by $700 billion and the next two by $900 billion each.

Along with each request, the president would be required to submit a list of recommended spending cuts -- in an amount higher than the ceiling increase request -- but those cuts would not need to be enacted for the debt limit to go up.

Congress would then vote on -- and probably pass -- "resolutions of disapproval" of those requests. The president probably then would veto those resolutions. Unless Congress overrode those vetoes, which is unlikely, the debt ceiling would increase.
The purpose of this convoluted plan is to allow most Republicans and some Democrats to vote against the politically unpopular debt ceiling increase while simultaneously clearing it.

For Congress, it is the legislative equivalent of time travel: a kind of law that allows lawmakers to reach into the future, and force decisions on the Congresses yet to come.

On Tuesday, the GOP-led House will vote on such a measure, part of a broader plan to reduce the deficit that has been nicknamed “cut, cap and balance.” For the next 10 years, the bill would set caps on the money available for later lawmakers to spend.

But, as with all stories about time travel, there’s a catch. In Congress, giving orders to the future rarely works; lawmakers simply ignore or repeal them.

So why would the current plan to “cap” spending work?

It turns out that even supporters have their doubts that it would.

“They have tried doing all these things in the past, but what future Congresses do is, they ignore it,” said Rep. Raul R. Labrador (R), a freshman legislator from Idaho.

Should we Cut, Cap, and Balance?

According to the website cutcapbalancepledge.com, 8 Republican presidential candidates, 4 Governors, 12 senators, and 29 house members have signed the pledge to cut spending, cap spending at a fixed percent of GDP, and pass a balance budget amendment. In theory I have to admit that this looks appealing. But the specifics on how this is to be accomplished present some challenges.


Let's start with cutting spending. The pledge says that $380 billion of spending cuts are needed in the 2012 fiscal year. That's a 10% cut in total spending. It's deep, but it's probably also necessary. One of the things I fear about the current budget negotiations is that it will involve cutting spending in years 5-10, and not 1-5, which means that nothing will actually change in the short term and probably not in the long term because future politicians will just override the cuts. I say we go for this one.

The most controversial proposal is capping spending at 18% of GDP. To give you some context, in 2011 spending is projected to be 25.3% of GDP. In 2007, the year before the recession took hold, spending was 19.6% of GDP. In 2000, the year before the tech bubble burst when we had a budget surplus an everything was rosie in the economy, spending was 18.5% of GDP. In fact, you have to go back to 1966 to find the last year that spending was below 18% of GDP at 17.8%. Listen, it's a worthy goal and one we should hope for over the next 10 or so years, but it's a goal that requires strong GDP growth - you can't cut your way to those numbers and not destroy the economy. A more realistic and achievable goal is probably closer to 20%.

Finally, we have the balance budget amendment, which will be the most difficult to pass. It would include the 18% cap, would require the government to have a balanced budget each year, and would require a supermajority for tax increases. Passing a constitutional amendment requires a two-thirds majority in both houses of Congress and for two-thirds of state legislatures to pass the ammendment. This process can take years and is not a solution to our short term problems.

There's consistently 27-28% of our country who are dead ******* stupid.

Cycloptichorn wrote:

There's consistently 27-28% of our country who are dead ******* stupid.

Count me as one of them. Defaulting on America's debt is bad, but some deals for avoiding default have terms that are worse. Especially when you consider the incentives they set for future blackmail.

I'm sorry, but you're just incorrect on this one, Thomas.

Cycloptichorn wrote:

I'm sorry, but you're just incorrect on this one, Thomas.

It happens with us dead ******* stupid people. You'll have to indulge me.

You're saying that it would be better for Obama to just tell them to **** off, and let the country go into default - than to take a deal that he wants to take? I cannot understand your reasoning on this.