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Divide and Conquer

The president’s real agenda.

Jul 25, 2011, Vol. 16, No. 42 • By FRED BARNES
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Soon after Mitch McConnell joined the debt limit talks, his suspicions grew. An agreement with President Obama on raising the limit by $2.4 trillion​—​and tied to serious spending cuts​—​looked impossible. The more he heard from Obama and his aides in the private sessions at the White House, the more he felt that no good could come from the talks. They would lead to a bad deal, harm to Republicans, or both.

Politics Poker Picture

Thomas Fluharty

McConnell, the Senate minority leader, did not participate in the earlier negotiations, seven weeks of them, guided by Vice President Biden. Senate Republican whip Jon Kyl had taken part in those talks, which were friendlier and far more productive than the meetings run by Obama. Biden, despite his reputation as Washington’s premier windbag, had restrained himself. The president hasn’t. He’s talked incessantly and for so long that others often gave up trying to get a word in. Obama dominated one session so completely that only one of the four Republicans spoke and then only in short spurts.

What appalled McConnell was Obama’s insistence that even relatively small spending cuts be accompanied by tax increases. These were “little stuff,” one Republican says, and not particularly controversial. That wasn’t the only rollback from the Biden talks. Obama’s aides had reduced the size of the cuts.

They were also eager for Republicans to accede to precisely the tax increases​—​on corporate jet owners, the oil and gas industry, hedge funds​—​that buttress Obama’s reelection ploy of positioning himself as foe of the rich and defender of everyone else. These tax increases were presented as offsets to a specific spending reduction, but they didn’t come close.

Nor was the schedule of spending curbs offered by Obama credible. Only $2 billion would occur in 2012, with “empty promises of more to follow,” McConnell said. 

After several rounds of Obama-led talks, Senate majority leader Harry Reid noted the obvious: Republicans simply aren’t going to agree to tax increases. The president was undeterred. He continued to toss out ideas Republicans were sure to find unacceptable. At the fifth of the daily White House talks, economic adviser Gene Sperling outlined a plan for a deficit cap. It had one problem. If the cap were breached, it would trigger an automatic tax hike (as well as spending cuts). Kyl, the only Republican to speak during the meeting, rejected it.

Obama hasn’t made compromise any easier for Republicans. He’s made it harder, perhaps on purpose. He’s operated as if he’s in full command of the situation. And Republicans have no option but to go along or be blamed for blocking an increase in the debt limit. Eighty percent of Americans want a “balanced” deal, Obama declared at his press conference at the end of the week. In the president’s lexicon, “balanced” is the same as “shared sacrifice” and “trade-offs” and “tough choices.” They all mean higher taxes. 

After sitting through two days of talks, McConnell was ready to bolt. He delivered a sharply worded speech on the Senate floor. “I have little question that as long as this president is in the Oval Office, a real solution is unattainable,” he said. “In my view the president has presented us with three choices: smoke and mirrors, tax hikes, or default. Republicans choose none of the above.”

The next day, McConnell proposed an escape hatch, a jerrybuilt scheme to allow the debt ceiling to rise without Republicans voting for it. And it would keep them from becoming, in McConnell’s phrase, “co-owners” of the Obama economy.

House Republicans aren’t ready to escape so cleanly. They may affix $1 trillion in cuts in spending​—​cuts agreed to by both sides in the Biden talks​—​to McConnell’s legislative device. But that assumes they’ll ultimately embrace it, which is anything but certain.

The state of things after two months of negotiations suggests Republicans made three mistakes. One, their leverage in a fight over a debt limit increase turns out to be far less than McConnell, among others, had figured. Two, by agreeing to secret talks, they let Obama and Democrats pretend to support deep spending cuts without offering any public evidence, like a budget. And three, they played into Obama’s hands by walking out of the Biden talks and calling on the president to take over.

With Obama in charge, he and Republicans are farther apart than ever on a deal. And Obama thinks he has Republicans right where he wants them​—​divided. Indeed, Republicans are split on whether to persist in rejecting a tax increase in further talks, adopt the McConnell approach, or leapfrog the debt limit debate and try to enact spending cuts and a balanced budget amendment. The leapfroggers are in the majority.

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