Obama's Debt Limit Move Was a Smart Play

Obama's Debt Limit Move Was a Smart Play

By Mark Salter - July 13, 2011

It must surely be infuriating for Republican members of Congress to be criticized by President Obama for their lack of political courage. The grown-up in the White House who compares their work habits unfavorably to his daughters' homework practices and admonishes them to eat their peas in negotiations to raise the debt ceiling and reduce the national debt had earlier sent Congress a laughably unserious budget, and had been until very recently mostly absent from those negotiations while he traveled the country blasting Republican plans to balance the budget.

The president who now boasts of his courage in supporting deep discretionary spending cuts and serious cost-saving reforms of Social Security and Medicare -- ardently opposed by his base -- if only Republicans would agree to some tax increases, is the same commander in chief who devised a troop-withdrawal plan for Afghanistan that appears timed to improve his re-election prospects rather than the prospects that our mission in Afghanistan will end in success.

Yes, it is galling to watch this president claim the high ground. On issues from immigration reform to campaign finance law, his claims to have attained some heavenly altitude far above the grubby maneuverings of Washington's self-interested schemers turn out, upon closer inspection, to invariably serve his own political interests rather than actually advance the goals he advocates.

It is all the more galling when his claim appears justified, and the high ground that he occupies wasn't so much taken from Republicans as it was ceded by them. If the "grand bargain" he proposed to John Boehner, and which the speaker seemed briefly inclined to consider seriously, is even close to what has been leaked to the press then it was a deal worth taking seriously. Three trillion dollars in spending cuts, entitlement reforms that include changing the formula used to calculate Social Security cost-of-living increases, and raising the eligibility age for Medicare are a fair exchange for a tax reform deal that reduces the corporate income tax rate and makes other pro-growth changes to the tax code while also closing loopholes, raising "user fees" and other tax increases that would result in increased revenues of some $1 trillion to the depleted U.S. Treasury.

Yes, Republicans campaigned successfully in the 2010 elections on a no-tax-increase pledge. They also promised to save the country from the ruinous debt-accumulating fiscal policies embraced by both parties over the last dozen years. And in a divided government, which is more or less a constant feature of modern American politics, you will not succeed in balancing the budget and reducing the debt -- and you will surely not get Democrats to sign off on real Social Security and Medicare reforms -- without some concession on taxes.

As a political gambit, the president can't lose whether Republicans take the deal or not. If Republicans did embrace a grand bargain along the lines Obama has proposed, he would benefit politically. But so would Republicans by showing Americans that, contrary to expectations, the White House and Republicans can actually address very difficult problems with situational competence. That's why congressional Democrats persist in grumbling about the purported entitlement reforms Obama was prepared to accept even though Republicans have rejected the deal. They're worried a deal would undermine the demagoguery about Republican plans for Social Security and Medicare that Democrats hope will protect their Senate majority and help them retake control of the House.

If Republicans persuade Democrats to take a smaller deal, they will still suffer attacks on their proposed Medicare reforms while at same time appearing less serious about the national debt than the Democrats. And if -- and I don't for a second believe they will -- Republicans refuse to raise the debt ceiling because Obama still insists on some tax increases as a part of a smaller deal, they could destroy their own chances of victory in the 2012 election. Polls showing at least half of the public reluctant to raise the debt limit would change overnight if we actually defaulted on our national debt. The ensuing chaos would quite likely panic every household in America that didn't have large reserves of gold bullion buried in their backyards.

We can complain all we want about Barack Obama's audacity and hypocrisy. But, in this instance, he has audaciously outmaneuvered Republicans, and claimed, without effective resistance, the high ground on a core Republican issue -- fiscal responsibility. Obama has, or at least appears to have, put on the table a proposal that seems practical, reasonable and bold -- and which made Republicans appear truculent and small. He has, as the saying goes, done well by doing good. Now it's the Republicans' turn to do the same.

Mark Salter is the former chief of staff to Sen. John McCain and was a senior adviser to the McCain for President campaign.

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