The Debt Limit

By Richard Baehr

I am pretty certain that in the current debate over the debt ceiling and the attempt to reduce the deficit, the President will come out on top. The reason for this is simple- he is the leader of his Party and his side in the debate. What Nancy Pelosi and Harry Reid think is irrelevant.  Other than demagoguery about Eric Cantor, they have largely kept their mouths shut.  Obama has the big megaphone, and gets all the networks to break away for his speeches and press conferences. So he can shade every substantive debate his way, and get a large audience for his attempt to frame his side as one that wants to compromise,  behave responsibly,  achieve balance between tax increases on those who can afford to pay more and cutting programs for the needy (in reality, mostly the middle class). 

On the GOP side, you have a fight for the nomination going on, so the leaders of the Party are those in the Senate and House.  Here real ideological battles are playing out publicly. 
I just watched a bit of the Obama press conference, and as usual, he lied.  Obama argued that America is not Greece or Portugal and our deficit problems only need a little tweaking. That is patently false.  The Obama budget for the next ten years, relies on optimistic growth forecasts for the economy, optimistic forecasts for interest rates on federal debt (very low), and absurd estimates of the cost of the health care reform act -- now scored as a deficit reducer, when in reality, once many companies drop coverage , pay the small penalties, and allow their employees to enter the subsidized exchanges, the cost will skyrocket. The federal deficit of $14 trillion could easily double in the next ten years.  Greece is taking some medicine. We have not.  As usual, we will defer the problem. 
We have a gridlock in Washington because one party, the Democrats, does not trust  the results of the private economy, and wants to insure the results it desires. They need larger government to achieve more redistribution.  For that they need more tax money.  The GOP is more sensible about the size of government and the excess of regulation (and its job killing impact).  They understand that almost all "cuts"  in government spending are really not cuts at all,  but merely cuts in the rate of growth of government.  The debate over changing the inflation adjustment for Social Security  by a few tenths of one percent per year going forward, brought out all the predictable "granny will freeze, starve and fall over a cliff" baloney.

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