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Friday, October 21, 2016

Why Obama Has Already Won the Debt-Limit Fight

July 15 (Bloomberg) — I get the feeling that it’s all over but the shouting. We may look back and say that Senate Minority Leader Mitch McConnell’s convoluted parliamentary “backup plan” marked the effective end of the 2011 debt-ceiling crisis. The winner? President Barack Obama.

Sure, an agreement this month on reducing the deficit would be preferable for restoring confidence in the economy and for the president’s legacy. Obama has told lawmakers they need to decide by Friday if a bargain is possible. But even if the parties miraculously strike a deal in the Cabinet Room, the votes aren’t there on Capitol Hill to pass it.

The plan offered by McConnell this week does what Obama and the Republicans claimed they want to avoid: It kicks the can down the road again. Republicans in both houses — not to mention online and on the airwaves — were furious about his proposal, and McConnell even backpedaled from it a bit. But they have nothing else to fall back on.

If you went into the congressional kitchen to cook up the perfect Washington fudge, this is what you’d get. Instead of “doing something big” about the deficit, McConnell is proposing to do nothing — then blame the other side.

It’s a sign of how ungovernable the country has become that something resembling this scheme is now the most practical way forward.

Best Political Outcome

Yet politically, an elaborate fudge is the best possible outcome both for Republicans who talked themselves onto a ledge and for a president facing an imminent disaster and recalcitrant opposition that spits on the word “compromise.”

McConnell concluded that his party needed cover for a strategic retreat. Under his Rube Goldberg meets Robert’s Rules of Order scenario, Congress would give the president the authority to raise the debt ceiling in three increments, then disapprove of his action, then sustain his veto of the disapproval with few if any Republican votes. (McConnell acknowledged that Republicans wouldn’t have the two-thirds required to override Obama’s veto.)

His little maneuver — hard for even wonks to follow in detail — wouldn’t make Obama “own” the deficit, as McConnell hopes. But it would allow Republicans to say they voted against an increase in the debt ceiling while sparing them blame for causing a catastrophic default.

You can see why the idea might also appeal to the president, though he will accept only one vote, not the prolonged torture of three that McConnell proposes. It’s not a bad way out for him. The “Big Fudge” would let him frost his cake and eat it, too.

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Copyright 2011 The National Memo
  • jtmiller562

    I seldom agree with George Will on anything but he’s right when he says we need a moratorium on the kicking-the-can metaphor. There are cans all over Washington. Enough already.

  • OneoftheAlfreds

    O’Bama won the debt limit fight? That hardly seems the case at all.

    Neither side of the debt limit debate wins anything when the protagonist is never in the room. The reality is that the entire trajectory of the national debt is up and up, with no possible way to pay it down. It is not because taxes are not high enough, it is because there is no logical way to payoff debt with more debt.

    All of our money is debt, the wellspring is the Federal Reserve who only issues debt based currency. If the debate is to be won at all, the FED has to step up, buy all the Federal debt, and forgive it all. It never lent anything in the first place except for a checkbook entry from an empty account.

    The FED should begin to unwind itself as the nation’s central bank. Congress has to stop borrowing worthless currency from the FED in order to pretend to fund the nation’s financial needs.

    Worldwide the dollar is no longer reserve currency despite its official status. The United States is going to sooner or later have to end the use of the dollar while transitioning into a sound equity based money supply.

  • Stephen Chasko

    Insightful article except for one thing: McConnell’s proposal was dead on arrival. It never had any chance of passage. Mr. Alter’s statement that the “Republican’s have nothing else [but the McConnell plan] to fall back on” is wishful thinking, unsupported by anything but Mr. Alter’s prolific Left Wing fantasies. The fact of the matter is that the Democrats control one half of Congress and the Presidency. They are the ones responsible for any budget that results in a default.

  • great4u


    Give reality a break. Everyone knows there would be no crisis right now if House Republicans held a vote to raise the debt ceiling, something they did without the slightest bit of complaint numerous (aka many, a lot) times when the presidency and BOTH houses of congress were under Republican control during the disastrous Bush years. Now that voters freely and lawfully chose to put someone else in charge the Republicans have taken it upon themselves to hold the country hostage to get what they want. The Republican party’s commitment to democracy is seriously in question and we should not be surprised considering that they are completely beholden to corporations for their positions and corporations are the most authoritarian, anti-democratic organizations on the planet. That is why Thomas Jefferson treated them with contempt and suspicion in his writings. Maybe if you took the time to learn some history your comments might someday resemble reality.

  • Dr BobbyG

    Despite Republican protestations that the public voted for no new taxes and to reduce the deficit, it is clear that they voted for more and better paying jobs — they had it exactly right. Currently our federal deficit of $1.4 trillion dollars is paying for 10% of the $14 trillion dollars of goods and services we produce each year. Take that away without commensurate increases in worker wages will place our economy in a death spiral with reduced demand, more workers out of work, even less demand etc.

    If we are to restore the worker purchasing power lost over the past four decades, we need to address the causes — outsourcing, automation and dependence on imported oil by raising import tariffs, reducing the work week and converting to natural gas and renewables respectively.

    We have all of the historical markers of an empire on the brink of failure — overextended financially and militarily, destruction of our middle class, failure to address the depletion of our primary energy source and a dysfunctional federal government. We need to listen to the voters and act quickly if our democracy is to survive.