Debt Limit Dangers
A tricky negotiation for House Republicans.
Jun 20, 2011, Vol. 16, No. 38 • By FRED BARNES
Even as they bask in good political news—Weinergate, President Obama’s ineptitude on the economy—Republicans are headed for trouble. The reason is the gap between what grassroots Republicans want and what Republicans in Washington can deliver.
Tom Williams / Roll Call Photos / Newscom
The gap will come into play once an agreement on raising the debt limit, now being negotiated by congressional Republicans and the White House, is reached this summer. Republicans insist the increase must be accompanied by spending cuts and budget caps, and it will.
But here’s the problem: Republicans may force Obama to accept cuts that by the standards of Washington and history are unprecedented, yet in doing so won’t satisfy a multitude of conservatives, Tea Party people, Republican presidential candidates, and talk radio hosts, all of them outside the Beltway.
Many oppose any hike in the debt limit, regardless of what is attached to it in spending reductions. Others are likely to be unsettled by a compromise that includes concessions to Obama, perhaps even a tax increase. In short, the debt limit agreement is a recipe for exacerbating the division among Republicans.
Once the deal is done, Obama is bound to claim he got the upper hand, just as he did after the compromise with Republicans on taxes and spending in the lame duck session of Congress in December. Though he hadn’t truly prevailed back then, the mainstream media insisted he was the winner. Now, whatever the outcome in the debt limit talks, the media are poised to give Obama credit again.
Not only that, they’ll play up a split between Republicans on Capitol Hill and the party’s grass roots. If indeed there is a rupture, it will come at an unfortunate time, as Republicans begin to gear up to defeat Obama, capture the Senate, and hold the House in 2012.
To put it another way, Republicans may achieve the best possible deal under the circumstances—that is, when confronted with Democratic control of the White House and Senate. But the deal is likely to fall short of satisfying Republicans excited by the political potential from the 2010 election.
This situation may be unavoidable. To get spending cuts equal to an increase in the debt limit in excess of $2 trillion, as House speaker John Boehner has proposed, Republicans would have to concede something to Obama in return. And it’s clear what Obama wants. He told House Democrats he is committed to a tax increase in exchange for spending cuts.
The White House envisions a debt limit compromise as a repeat of the lame duck agreement that gave the president a boost in the polls. For that to happen, Obama will have to make concessions serious enough for the agreement to pass the Republican-controlled House.
So far in the negotiations under the direction of Vice President Biden, the White House has offered practically none. Obama’s representatives are allergic to cuts (or reforms) in entitlements, while eager to cut defense spending. They want any caps that, if unmet, allow for tax increases to curtail the deficit. Given their intransigence, an agreement is nowhere in sight.
In fact, the White House doesn’t appear to understand why the December agreement gave Obama a lift. For one thing, he not only gave up on a tax increase, but he also said tax cuts would spur the economic recovery. (Since then, Obama has renewed his call to end tax cuts for “billionaires and millionaires.”)
It was Obama’s willingness to yield on taxes and reach a compromise with Republicans that appealed to independents, the critical voting bloc that supported him in 2008 before overwhelmingly backing Republicans in 2010. To attract independents again, Obama has to go along with many Republican demands.
“It’s like Nixon going to China,” a Republican involved in the negotiations says. “It’s like the Sister Souljah moment for Clinton.” The point is that Obama would benefit from doing things he has routinely opposed and moving to the right.
It’s reasonable to assume this is where Obama aims to go. But first he has to oppose Republicans to show liberal Democrats—his political base—that concessions to Republicans were made only grudgingly and then only to secure an increase in the debt limit and avert a default.
You can imagine what Obama or his minions will say about an agreement that reduces spending significantly and trims the deficit. They’ll claim the president has come to grips with the debt problem. They’ll brag about spending cuts. They’ll say he protected entitlements from major damage.
The actual agreement, however, will be far less to Obama’s liking. A compromise overloaded with concessions to the president wouldn’t stand a chance in the House, even with Treasury secretary Tim Geithner screaming about an imminent default and economic debacle. This strengthens the hand of the chief Republican negotiators, Senate whip Jon Kyl and House majority leader Eric Cantor.
But one stone hard fact remains: There will be an increase in the debt limit. True, Obama needs it more than Republicans do. But they don’t want to risk an economic plunge either. Republicans can pass a short-term increase (with a dollop of spending cuts) if Obama resists. What they’ll never get is outright surrender by the White House.
That takes us back to the trouble ahead. I suspect the Republican base, stiffened by the Tea Parties, isn’t attuned to the necessities of a divided Washington. Polls have shown conservatives, young and old, rich and middle-class, strongly preferred a government shutdown to the stopgap spending bills, with cuts, enacted earlier this year.
A hike in the debt limit—even with cuts, curbs, and caps to which Obama has agreed—will be harder still for conservative Republicans to swallow. And dreams and reality will clash.
Fred Barnes is executive editor of The Weekly Standard.
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