It is not widely known outside Washington, D.C., that the debt limit negotiation was successfully completed over the weekend, until President Obama backed away from it. House and Senate leaders had successfully crafted a plan that would allow the President to take on new debt to pay the nation’s bills, but Obama balked at it because it did not provide him enough credit to last until after November 2012. In so doing, the President showed his hand to Congressional leaders, and they saw that he has no plan — he simply wants to avoid debating what is clearly a losing issue right before his vulnerable Democratic Senate majority faces off against fiscally conservative challengers. The problem for the President is that he forgot to bring Harry Reid into the conversation early enough, and hung him out to dry. Now a slighted Harry Reid and Speaker Boehner are working their own angles as Obama stands marginalized on the side.
Its no wonder President Obama entered Illinois politics, where winners are decided by powerful political bosses whose support can be bought. Cause he certainly would not have done well as a lawyer. Just look at his failed negotiation track record on this one issue. He wanted a clean debt limit increase – and wasn’t able to convince Congress to pass it. He demanded tax hikes – and failed to get them. He wanted to end subsidies to certain industries and eliminate certain deductions for wealthy individuals – he didn’t get them. He wanted one dollar of increased revenue for every three in cuts – and the deal now includes no revenue. In the end, when President Obama arbitrarily set a limit on the amount of spending cuts he would accept without a tax increase, he almost ensured that a short-term deal below that level would be on the table, which he didn’t want. Should the Boehner plan make it to Obama’s desk, it will be the ultimate victory of principles over rhetoric.
The Boehner plan implements $7 billion in immediate spending cuts, below the already reduced levels passed by the House in the Ryan budget. It places firm caps on discretionary spending, which will save taxpayers around $1 trillion over the next ten years. In exchange, the debt limit will be increased by a trillion dollars. At that level, President Obama will have to procure another increase by mid-summer next year. The Boehner plan forms a joint committee in Congress to identify savings in the amount of $1.7 – 2 trillion, most likely from reforms to entitlement programs and reducing wasteful government spending. The second debt limit increase is dependent upon the implementation of the committee’s suggestions, and their ability to find the required amount of savings. All in all, the Boehner plan embodies all of the principles of Cut, Cap, and Balance, without taking the name.
The fact that the Boehner plan was negotiated in concert with Harry Reid lends it strong credibility. Reid’s alternative plan, a $2.7 trillion dollar cut with a $2.4 trillion dollar increase in the debt limit, and NO REVENUE, is itself a major victory for the GOP. But even this plan is a symbolic gesture of resistance on Reid’s part, since he has already agreed to the substance of the Boehner plan, which was negotiated with his support. In the end, Boehner and House Republicans firm adherence to their principles, and to the taxpaying public, was victorious over the political showmanship of the White House. Obama’s presidency, while ideologically liberal, has been highly pragmatic, trying to move with the electoral waters to stay ahead of the GOP field. Now Obama is finding out what happens when campaign rhetoric collides with real principles. The Boehner deal is the culmination of a victory that was inevitable from the outset, because the House GOP was standing on solid conservative principles, while the President was slipping in the sand.
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