Friday, November 18, 2011

How Obama and the Democrats outsmarted Republicans on the debt ceiling deal

Just a few months ago as the debt ceiling crisis created by Republicans mounted, tensions were high. Most economists (and otherwise sane people) knew that if the US faulted on its debt it would likely create a global financial crisis. And yet the Republicans seemed willing to let that happen if their demands weren't met. President Obama had crafted a "Grand Bargain" that would cut the deficit by $4 trillion in a balanced way - cutting spending and raising revenues. But Republicans would have none of it.

At that point, President Obama and the Democrats had three choices:

1. Let the economy collapse (unthinkable)
2. Send the country into a constitutional crisis by invoking the 14th amendment - thereby probably contributing to an economic collapse
3. Outsmart the Republicans in creating a deal

We all know that they chose #3 - but too many folks didn't think through the strategy of the deal and simply bought into Speaker Boehner's bluster when he said he'd gotten 98% of what he wanted. Some of us actually took a moment to analyze it and noticed how well the Democrats had done. But with an assist from the MSM and the poutragers, the meme of "weak Democrats" prevailed once again.

Just to review, the deal set up a Super Committee in Congress that was tasked with finding $1.2 trillion in deficit reductions over the next 10 years. They had to agree on a plan by Nov. 23rd (next Wednesday) and if so, it would be expedited through Congress without amendments or the possibility of a filibuster (therefore it would only need 50 votes in the Senate). If they failed, automatic cuts would be "triggered" to happen January 1, 2013 - half coming in across-the-board cuts to domestic programs and half from defense. However, Democrats were able to exempt Social Security, Medicaid, unemployment insurance, programs for low-income families, and civilian and military retirement from the triggered cuts and limit Medicare cuts to 2% for providers. Since none of that guaranteed an increase in revenue, President Obama said that absent a "balanced approach," he would veto any extension of the Bush tax cuts, which are also set to expire January 1, 2013.

As of today, we are 5 days away from the deadline and there doesn't seem to be any deal from the Super Committee in sight. Some people are starting to recognize what I said over a month ago...failure to reach a deal will change the entire dynamic of the 2012 election. Here's Brian Buetler.

Failure is very much an option. And if failure happens, Capitol Hill politics will take a severe turn heading into the 2012 election....

After Wednesday, the panel will no longer have the power to submit amendment- and filibuster-proof legislation to the Congress for a guaranteed vote. That means cleaning up the mess will have to happen in the regular order, setting the stage for the biggest election year legislative food fight in decades.

What President Obama and the Democrats did with this deal was to not only rescue the hostage of the global economy, but completely change the dynamics of negotiations to give themselves all the leverage. With the looming defense cuts and the expiration of the Bush tax cuts, they will be the one's who can walk away from the table if their demands aren't met. As I've said before, Republicans have been stripped of their ability to simply obstruct and will have to proactively work to get something done.

Just how desperate are the Republicans these days? Its gotten so bad that they're crying for Daddy Obama to come home and fix the mess they've created.

Republicans are calling for President Obama to jump into the deficit-reduction talks gripping Washington, reflecting the widespread view that the congressional supercommittee is now headed for a failure.

Lawmakers and congressional aides familiar with the deliberations say the talks have reached a hard impasse, with Republicans locked in an internal struggle over whether to agree to higher tax hikes to cut a deal.

“It’s hard to see us getting a deal unless he comes in at the last minute,” Sen. Dan Coats (R-Ind.) said of Obama, who is on a nine-day trip to the Pacific and not scheduled to return to Washington until Sunday...

“Unless the leadership, including the president, steps in and saves this thing, I think the consensus is, in terms of coming up with a credible package, all is lost,” Coats added.

Today is one of those days when I'm proud of our Democratic Party and our "only adult in the room" President who had the courage to play the long game on this one for the win.


  1. Hi SP
    I've been offline for awhile re: moving. So happy to be able to catch some more of your brilliant analysis on the budget deal. I am so proud of your rock-solid support for PBO,I am with you on that one.

    I think the repug/slug/traitor trap is brilliant. I also like that Patty Murray (tennis shoe Mom) presents that soft face of the steel hand in the pig skin glove ala Roselyn Carter.

    We all wished but dared not believe that PBO had many aces up his sleeve as in 11-dimensional chess. Repugs always play checkers!
    Ya gotta love this man!

  2. Good to see you back Smilingl8dy!!

    One of the things that makes me proud of the Democratic leadership is how they all seem to be working together on this one. I'm sure there'll be a few defectors. But the leadership are all playing from the same handbook at this point. That's lovely to see!

  3. I love how the Repubs are trying to pull this 'PBO must save the day' crap - don't think he will fall for this b.s.


  4. Yes and notice how timely his visit to Asia was laid out. He is finished saving them. I knew after the Debt Ceiling fight went down that he was in killer mood. Anyone who saw his face should have known the repug/traitors were going to face Hell and its face would be PBO.

    He and FLOTUS tried to tell us during the campaign "under-estimate him at your peril. He is from Chicago". Repugs did not listen, too bad.

  5. Yep, we put a smart one in office this time and we need to do it again,he's brilliant!

  6. After all the obstructionism the Repugs have engaged in, having the tables turned and them hearing "No" is music to my ears. I love it!

  7. Love this analysis,SmartyPants!

  8. Love it. Randi Rhodes explained it on her radio show awhile ago but I'm very happy to see your analysis in print.

    President Obama is one very smart politician, isn't he?

  9. I'm scatching my head right now. Do you think it had something to do with Obama being a Constitutional Law professor or something. Hmmm LOL

  10. The President has been very adroit at showing just how naked the ambition and rampant the self-interest is on the other side of the aisle... and in those Democrats who take the largesse of the party where election funding is concerned, but obstruct the best interests of the country, subsuming it to their re-election prospects.

    SO glad to have an intelligent, thoughtful President.

  11. Man, you people are dumb!

  12. Not only did God give us a smart President, but a believer of Him. People who are creating lies against him will not enter that kingdom. Rev. 21:8

  13. ‎" half coming in across-the-board cuts to domestic programs and half from defense. However, Democrats were able to exempt Social Security, Medicaid"

    This guy nailed it. The Bloated wasteful military needs to have a cut (look at the waste before you attack please)

    All the Democrats have to do is let the Bush tax cuts for the top half expire at the end of the year(Remember that deal? yes for over $250,000 will lose their break at the end of the year)

    Doing NOTHING has never sounded like a great option before now.

    Smartypants: How Obama and the Democra

  14. But when The Bush tax cuts expire in Dec. 2012, won't the Republicans again threaten to not reinact the middle class tax cuts if the tax cuts for the wealthy are not reinacted, too. And won't it be the same thing happen all over again? Or will it be taken to the election, or just left that the Republicans raised taxes on the middle class?

  15. To take it a step further, check out M.S. Bellows' post from this summer that outlines exactly the kind of power contained in the "cop out" deal.

    I said all along that President Obama is the shrewedest muthafucka on the planet! :)

  16. You people are insane if you are serious about your thinking. Please, Please keep a copy of your statements shown here. I will not attempt to change your warped view of Obama and what he has destroyed. When you grow up you will be embarrased that you publicized and proved your
    innocence. Even the Germans can't believe how they were so duped!! This must have something to do with George Soros. Deficient in worldly wisdom says it best...


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