18 Oct 2013 Fourth and $17 Trillion – Let’s Punt
The barricades are down, the parks, monuments, and museums are open, the pandas are back on TV, licenses, passports, and IRS letters are being issued, and government workers can resume work and consuming. Headlines focus on the futility of the effort and disarray within the Republican Party, with some suggesting ‘civil war.’ Traditional backers from main street to Wall Street are furious with both the Tea Party and the leaders who allowed the derailment. And Democrats are doing their best not to gloat.
But here’s the thing. The legislation that saved America’s AAA Wednesday night represents no compromise and no way forward for our Congress or country. Unfortunately, the process only further hardened the resolve of the players. Mr. Obama, who famously told an aid during his first term that he would never negotiate with Republicans again over the debt ceiling now has a powerful precedent to wield the next time. Harry Reid, successfully shut down every attempt at negotiation in October and won a career victory this week by cornering Republicans in defeat at the debt ceiling’s 11th hour.
Republicans, on the other hand have done their fair share of blocking. The House continually rejected calls from Democrats to convene a conference to discuss their budget and Obamacare differences. Tea Party headliners blocked all attempts to shift tactics from a hopeless cause setting House and Senate leadership up for humiliation and their party for division and withering public opinion.
But just as winning breeds superiority, imperviousness, and commitment to the ways of winning, humiliating defeat steels resolve to do whatever it takes to avoid it the next time. However, weakened and divided, Republicans have few if any constructive options available.
On Thursday of last week, Republicans met with the president to hash out a deal. As reported in the NY Times, “about 45 minutes into the meeting, Republicans weren’t sure that the president believed they were making a serious offer. House Budget Chairman Paul Ryan told Mr. Obama if he failed to seize this moment, the president would have a hard time achieving the remaining goals of his second term. ‘You’re going to miss your moment,’ Mr. Ryan said.” Such a bitter defeat yesterday probably only strengthened the resolve of many Republicans.
We’ve learned from a closed-door breakfast meeting among Congressional negotiators yesterday, as reported by the Wall Street Journal, that in order to “improve the prospects for some success, [they] largely agreed that a deal involving significant new tax revenues and large-scale changes to Medicare, Medicaid and Social Security, whose growth in an aging population is driving long-term projections of growing debt, is not going to happen. Instead, they agreed, the talks will aim at a more modest, confidence-building measure to replace the sequestration cuts in 2014. Negotiators could aim higher, for a deal saving at least $1 trillion over the next nine years to substitute completely for the arbitrary sequestration cuts. But neither side was hopeful of that.”
Wednesday legislation keeps the government open through January 15th and extends the nation’s borrowing limit until February 7th. It was just another punt while our debt spirals out of control and our global reputation erodes. Republicans will not discuss taxes and Democrats refuse to cut spending and entitlements.
While optimism for progress remains low, the balance of power persists. Should negotiations fail, the next round of across-the-board spending cuts known as sequestration will hit automatically, even deeper than the first. Democrats do not want these to occur just as badly as Tea Party hardliners want to end the Affordable Care Act – Obamcare. And President Obama said when asked if the same thing would happen again next time, smiled and said “no” as he left the press room.
Maybe they’ll go for it this time?