Debt Celing Fight: Obama Has Made Himself Irrelevant

On Friday Evening an angry President Obama held a press conference to announce that, once again, debt ceiling negotiations had broken down.  Of course he blamed Republicans. 

Here’s an excerpt:

So here’s what we’re going to do.  We have now run out of time.  I told Speaker Boehner, I’ve told Democratic Leader Nancy Pelosi, I’ve told Harry Reid, and I’ve told Mitch McConnell I want them here at 11:00 a.m. tomorrow.

Under the Constitution the President doesn’t have the authority to order Congressmen and Senators to show up at the White House.  But this President seems to think Congress works for him and is obliged to do his bidding. Obama continued:

We have run out of time. And they are going to have to explain to me how it is that we are going to avoid default.  And they can come up with any plans that they want and bring them up here and we will work on them.  The only bottom line I have is that we have to extend this debt ceiling through the next election, into 2013.

Really!   We’ll consider the possibility that with these words Obama revealed more than he meant to and made himself irrelevant to the process.

But first, his use of the word default – failure to pay interest on the debt – is out of line.

As the table shows there would be more than enough tax revenue to pay interest on the debt plus the other payments Obama has threatened to cut off because, in his words, “there may not be enough money in the coffers.”  He mentioned only the most popular programs for possible non-payment.  He didn’t threaten to shut down subsidies to “green” companies or agribusiness or Ethanol or high speed rail.  Few of us would be alarmed and many of us would cheer.

Obama’s threat to not pay Social Security benefits was spectacularly dishonest.  The Social Security Trust Fund holds Trillions in government bonds.  While these bonds represent a fictional debt government supposedly owes itself their face value is included in the total debt under the ceiling.  The government can convert Social Security bonds to cash without breaching the debt ceiling by selling bonds of equal value to investors.  Indeed the law requires the Social Security Administration to liquidate bonds in this manner and pay benefits.  The President does not have legal authority to stop those payments.

We cynics have suspected all along that Obama’s “only bottom line” was a debt ceiling increase big enough to extend past the election.   But it was startling to hear him blurt it out, openly admitting that his concern is not the debt or financial stability or the government’s credit rating.  His goal is to minimize the impact of the government’s exploding debt on his reelection campaign.  Thus he will sign anything that passes the House and Senate as long as he doesn’t have to defend his big government ideology again, in another protracted debt ceiling dispute that would still be fresh in voters’ minds on election day.  He wants to kick this can down the road so he can campaign on the promised benefits of new spending initiatives he and the Democrats have waiting in the wings.

Republican sources who have been present in the debt ceiling talks say Obama is inconsistent.  He will agree to something specific on Monday only to take it back on Tuesday, making honest negotiation impossible.  Their claim seems credible because Obama refuses to put any proposed spending cut or even tax increase in writing for the press and the people to see.

If there is to be a “deal” the terms will have to be worked out in Congress without Obama’s input.  But that won’t stop him from taking credit for “bringing both sides together” if the polls show public approval.

6 Comments so far

  1. Antonia on July 24th, 2011

    Obama has made mistakes but he is the one who is being honest. We can’t solve the deficit without additional tax revenue. In fact, the Bush tax cuts caused the gynormous deficits in the first place! Bush turned trillions of dollars of surpluses into trillions in deficits.

  2. Ancient War Horse on July 24th, 2011

    Obama honest? You must be smokin’ something!

    The article is exactly right. Obama is trying to set up his reelection campaign. That’s all he cares about. Boehener and the others are trying to find a solution but Obama’s just playing games.

    When he says he cares about people who get government checks what he really means is he cares about their votes.

    For the record I’m one of those government check people. I earned it serving 28 years in the Army. I’m also a taxpayer because I’m still working. I’m disgusted with this President who is trying to get my vote by threatening to cut off veteran’s retirement benefits but blaming the Republicans. That’s what is on his mind instead of trying to fix this deficit mess he caused.

  3. FrankFirst on July 24th, 2011

    Maybe there would be more “revenues” if GE paid some tax…

    Oh wait! Imelt is Obama’s buddy. We can’t ask his company to pay any tax! That wouldn’t be friendly.

  4. AzTex on July 24th, 2011

    Republicans are slaves to the crazy teabagers. Their unwillingness to compromise even a little is unbelievably reckless and irresponsible.

    But the voters will get even next year.

  5. Drew on July 24th, 2011

    AzTex –

    You seem to be familiar with teabaggers. Do you use your tongue primarily on the round objects, or the cylinder shaped thingy??

  6. Paul Green on July 29th, 2011

    If you’re serious about making money with your website, watch this free video about getting free instant targeted traffic to your site