Obama seeks GOP col­lapse, not so­lu­tion to fed­eral debt

Austin American-Statesman - - BALANCED VIEWS - From the right Mon­day Tues­day Wed­nes­day Thurs­day Krautham­mer writes forthe Washington Post; let­ters@charleskrautham­mer.com. Fri­day Satur­day Sun­day


un­der­stand Pres­i­dent Barack Obama’s strat­egy in the “fis­cal cliff” ne­go­ti­a­tions.

It has noth­ing to do with eco­nom­ics or real fis­cal re­form. This is en­tirely about pol­i­tics. It’s Phase 2 of the 2012 cam­paign.

The elec­tion re­turned to him to of­fice. The fis­cal cliff ne­go­ti­a­tions are de­signed to break the Repub­li­can op­po­si­tion and grant him po­lit­i­cal supremacy, some­thing he thinks he earned with his land­slide 2.8-point vic­tory mar­gin on Elec­tion Day.

This is why he sent Trea­sury Sec­re­tary Tim Gei­th­ner to the Repub­li­cans to con­vey not a ne­go­ti­at­ing of­fer but a de­mand for un­con­di­tional sur­ren­der. House Speaker John Boehner had made a peace of­fer­ing of $800 bil­lion in new rev­enues. Gei­th­ner pock­eted Boehner’s $800 bil­lion, dou­bled it to $1.6 tril­lion, of­fered ris­i­ble cuts that in 2013 would ac­tu­ally be ex­ceeded by new stim­u­lus spend­ing, and then de­manded that Congress turn over to the pres­i­dent all power over the debt ceil­ing.

Boehner was stunned. Mitch McCon­nell laughed out loud. In no­bler days, they’d have of­fered Gei­th­ner a pis­tol and an early-morn­ing ap­point­ment at Wee­hawken. Alas, Boehner gave again, coming back a week later with spend­ing-cut sug­ges­tions — as de­manded by Gei­th­ner — only to have them dis­missed with a wave of the hand.

What’s go­ing on here? Hav­ing taken Boehner’s sword, and then his shirt, Obama sent Gei­th­ner to de­mand Boehner’s trousers. Per­haps this is what Obama means by a balanced ap­proach.

He pre­tends that Boehner’s of­fer to raise rev­enues by elim­i­nat­ing de­duc­tions rather than by rais­ing rates is fis­cally im­pos­si­ble. But on July 22, 2011, Obama had said that “$1.2 tril­lion in ad­di­tional rev­enues ... could be ac­com­plished with­out hik­ing tax rates, but could sim­ply be ac­com­plished by elim­i­nat­ing loop­holes, elim­i­nat­ing some de­duc­tions and en­gag­ing in a tax re­form process.” Which is ex­actly what the Repub­li­cans are of­fer­ing to­day.

As for the al­leged cu­ra­tive ef­fect on debt of Obama’s tax-rate de­mand — the full rate hike on the “rich” would have re­duced the 2012 deficit from $1.10 tril­lion to $1.02 tril­lion.

Such non­sense abounds be­cause Obama’s ob­jec­tive in th­ese ne­go­ti­a­tions is not eco­nomic but po­lit­i­cal: not to solve the debt cri­sis but to frac­ture the Repub­li­can ma­jor­ity in the House. Get Boehner to cave, pass the tax hike

Kath­leen Parker

David Brooks

Ross Douthat

Ramesh Ponnuru with Demo­cratic votes pro­vided by Mi­nor­ity Leader Nancy Pelosi, and let the Repub­li­can civil war be­gin.

It doesn’t even mat­ter whether Boehner gets de­posed as speaker. Ei­ther way, the Repub­li­can House would be neutered, giv­ing Obama a free hand to dom­i­nate Washington and fash­ion the en­ti­tle­ment state of his lik­ing.

This is par­ti­san zero-sum pol­i­tics. Noth­ing more. Obama has never shown in­ter­est in gen­uine debt re­duc­tion. He does noth­ing for two years, then spends the next two ig­nor­ing his own debt-re­duc­tion com­mis­sion. In less than four years, he has in­creased U.S. pub­lic debt by a stag­ger­ing 83 per­cent. As a per­cent­age of GDP, the real marker of na­tional sol­vency, it has spiked from 45 per­cent to 70 per­cent.

Obama has never once pub­licly sug­gested a struc­tural cut in en­ti­tle­ments. On the con­trary, he cre­ated an en­tirely new en­ti­tle­ment — Oba­macare — that, ac­cord­ing to the CBO, will in­crease spend­ing by $1.7 tril­lion.

What’s he think­ing? Doesn’t Obama see loom­ing ahead the real eco­nomic cliff — a Euro­pean-like col­lapse un­der the bur­den of un­sus­tain­able debt? Per­haps, but he wants to com­plete his avowedly trans­for­ma­tional so­cial-demo­cratic agenda first, and let his suc­ces­sors — likely Repub­li­can — act as tax col­lec­tors on the mid­dle class (where the real money is) and tak­ers of sub­si­dies from the mouths of babes.

Or pos­si­bly Obama will un­der­take tax and en­ti­tle­ment re­form in his sec­ond term — but only af­ter hav­ing de­stroyed the Repub­li­can op­po­si­tion so that he can carry out the ref­or­ma­tion on his own ide­o­log­i­cal terms.

What should Repub­li­cans do? Stop giv­ing stuff away. If Obama re­mains in­tran­si­gent, let him be the one to take us over the cliff. And then let the new House, which is sworn in weeks be­fore the pres­i­dent, im­me­di­ately in­tro­duce and pass a full across-the-board restora­tion of the Bush tax cuts.

Obama will counter with the usual all-but-the-rich tax cut — as the mar­kets gy­rate and the econ­omy be­gins to wob­ble un­der his feet.

Re­sult? We’re back to square one, but with a more level play­ing field. The risk to Obama will be ris­ing and the debt ceil­ing will be loom­ing. Most im­por­tant of all, how­ever, Repub­li­cans will still be in pos­ses­sion of their unity, their self-re­spect — and their trousers.

Amity Shlaes Charles Krautham­mer

Ge­orge Will

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