The Debt Ceiling: Caught Between Barack and a Hard Place

COMMENTARY | The debt ceiling deadline is Aug. 2. Although "amused" by the idea of being involved, Obama said last Friday that he was ready to roll up his sleeves. By the following Wednesday, Obama stormed out of the meeting. I guess he never realized that sleeve rolling is the predecessor, not the definition of actual hard work.

In May, Tim 'I forgot to pay my taxes' Geithner said that, because of the higher-than-anticipated tax revenues - which curiously followed the extension of those evil Bush tax cuts - he was able to move the debt ceiling deadline from July 8 to Aug. 2 the Washington Post reported. This decision rock has been hanging from the debt ceiling since before January. However, the Wall Street Journal reported that Barack Obama didn't "thrust himself into the center of the deficit-reduction talks for the first time" until the very end of June.

Obama's sticking point? He wants to raise taxes.

Obama is angry that Republicans are refusing to allow any tax hikes in the deal, including provisions that again attack the wealthiest taxpayers, which Democrats like Nancy Pelosi fiercely wanted to exclude from the Bush tax cut extension. Republicans also insist that, to receive their blessing on raising the debt limit, Obama must agree to an equal amount of existing deficit reductions. According to The Hill, Obama said no Democrat would be willing to sign on to a plan that cuts $1.5 trillion.

The simmering impasse reached its boiling point on Wednesday and while the details of the exchange vary according to which side of the political fence tells the story, one thing is clear; Obama walked out.

Politico reported that one Democratic aide insists Obama's abrupt exit was the fault of Republican House Majority Leader Eric Cantor. "Cantor rudely interrupted the president three times to advocate for short-term debt ceiling increases" while Obama was trying to adjourn the meeting. As one Texas reporter knows all too well, you just "don't interrupt" Obama when he is speaking. "This is just more juvenile behavior from him," the aide whined, "and Boehner needs to rein him in, and let the grown-ups get to work."

By Thursday, Senate Majority Leader Harry Reid (D-Nev.) picked up on the Democratic aide's talking point saying that Eric Cantor was acting "childish" and "he shouldn't even be at the table," AP reported. Harry's idea of successful negotiations is to make the opposition shut up.

From the perspective of a Republican aide, Agence France-Presse reported that Obama got "heated" when Cantor proposed raising the US debt ceiling in increments rather than the big one-timer Obama wants. Furthermore, the aid said Obama threatened to veto Cantor's idea and "defend it to the American people" if he had to.

"Don't call my bluff," Obama warned Cantor, inadvertently admitting he held a weak hand. "This may bring my presidency down, but I will not yield on this."

Actually, Mr. President, through every existing poll the majority of American voters are telling you repeatedly that if you don't yield on this, it will bring down your presidency as well as the seats of any representatives who stand with you.

So, as the world witnesses Obama's bold yet embarrassing display of incompetence, one must ask; where is he getting all of this bad advice? The answer to that question rests in who was in the White House the last time this debt ceiling debacle happened. Bill Clinton.

According to The Atlantic, it's former President Bill Clinton who is urging President Obama to stand his ground and not to "blink" at Republican demands to exclude tax increases from any agreement to extend the government's debt ceiling. Bill has personal experience in this matter.

Bloomberg recalls that in late 1995, during Clinton's second year in office, the government was shut down for five days. A second shut-down lasted 22 days and carried into early 1996. In both cases, Clinton clashed with Republicans in Congress over eerily similar circumstances regarding the debt ceiling. Most notable was the Republican objective of cutting $270 billion from Medicare and, just as Obama has threatened to withhold Social Security checks from seniors, Clinton used Medicare as a political scare tactic of choice.

"I can't believe anyone would willingly, damage the seniors of this country," CNN reported Clinton saying back then.

Incidentally, regarding Obama's empty threat to hold Social Security checks by implying there will be no money, consider this. The government will take is $172 billion dollars in tax revenue in August. Of course, Reuters joined in Obama's Chicken-Little game by saying that the U.S. is "obligated" to make $306 billion in payments out of that sum -- "meaning it cannot pay about 45 percent of its bills without borrowing more money."

That's a lie.

News Busters dispels the fear-mongering by reminding (or educating) those who are worried that the only must-pay total in August will be the interest on the $306 billion, not the total of the debts, which is estimated to be less than $35 billion. That leaves around $88 billion left over to pay Social Security, the military and whatever else the president would care to deem necessary. Like those mythical, secret-decoder-ring figures Obama used to calculate those "jobs saved/created" numbers, the empty coffer theory is just another example of Obama Fuzzy Math intended to provoke fear in order to shove another mistake down America's throat.

Furthermore, during Clinton's debt ceiling chaos, Republicans wanted to cut $270 billion - roughly 14 percent - from Medicare over the course of seven years. Today, in part by raising the retirement age, Republicans want to cut $600 billion in Medicare spending over the next decade. However, while Obama likes to demonize Republicans for this effort he forgets to remind Americans that with one stroke of his presidential pen he cut $818 billion from Medicare during the first 10 years of Obamacare's full implementation with $3.2 trillion cut over 20 years.

While $600 billion in Medicare cuts sounds egregious at first, remember that Republicans also vowed to unwind the trillions in Medicare cuts that Obama has signed into law by repealing Obamacare.

In the meantime, Bill Clinton has convinced Obama that, just as he used his senior entitlement scare tactics to win a second term, Obama can make the GOP pay a political price for maintaining their similar position in the Debt Ceiling Battle Redux. The problem with this prediction is twofold. 1) This is not 1995 and 2) Barack Obama is not Bill Clinton.

The world was different back in 1995. Americans, for the most part, felt more confident about the economy. Even though the debt ceiling was an issue then as it is now, employment was high and people didn't go to sleep at night worried about losing their homes to foreclosure and 9-11 was just another day in September. Americans didn't feel the need to pay such close attention to what their politicians were really doing in Washington.

Whether you agreed with his policies or not, Bill Clinton had naturally what Obama couldn't find with a map; an almost boyish irresistible charm and the capacity to understand when it was time to play the role of centrist and to at least appear to be considerate of the Republican perspective. Clinton understood that, whether Republican, Democrat or Independent, the majority of Americans leaned conservative. Clinton lived and breathed by the latest poll results on issues that trended important to Americans. By listening with his keen ear to the volume and pitch of American sentiment Bill knew precisely when to bend and when to stand firm.

Obama, on the other hand, is either; a) completely tone deaf, b) simply not listening at all or c) honestly does believe we aren't paying attention.

Obamacare is a perfect example of Obama's oblivion or utter lack of interest in public sentiment. Where Clinton backed off of Hillarycare due to strong voter opposition, Obama shoved it down America's throat. He did it again with the stimulus. He's doing it again by trying to force congress to raise the debt ceiling and taxes even though the majority of Americans are strongly opposed.

When Clinton dug in his heels he looked "presidential". When Obama tries it he simply looks like a bully or a spoiled brat who resorts to throwing a tantrum when he doesn't get his way.

Another difference between Obama and Clinton is that Clinton adored the press and could play them at a moment's notice like a Master with a Stradivarius. Obama, on the other hand, loathes the press corps - that's pronounced "core" as in the center of an apple or a military "corpsman", not "corps" as in a dead body - and, unless they are willing to stick to approved questions to which the answers have been loaded into his teleprompter, Obama refuses to sing. He couldn't carry a spontaneous press conference tune if it had handles and a shoulder strap.

While we know who is giving Obama bad counsel, the question remains; why would he take bad advice? The answer to that is equally simple. Obama doesn't know what he's doing. He is a community organizer with no experience in managing a budget. Obama only knows how to roll up his sleeves. He relies on others to do the work. So now what? As Alexander Cintron of Associated Content stated, "The answer is blaringly clear to anyone paying attention, President Obama, the man who should be working for the interest of the American people," is doing the only thing he knows how to do. He is "campaigning."

Then there is this. The naive president also forgets that he insulted Bill Clinton with his charges of racism and actively humiliated Hillary during the 2008 presidential campaign. Obama, who once encouraged his followers to "punish" their enemies, seems to be perilously underestimating Bill Clinton who has a wicked long memory and an uncanny level of calculated patience when it comes to exacting both personal and political revenge.

And there is another clock ticking in the debt negotiations background.

Back in April, Standard & Poor (S&P) put the U.S. government on notice. Our triple-A rating on U.S. treasury bonds could be lost unless the budget deficit was reduced or the economy grew more vigorously than expected. When ABC's Jake Tapper asked if the U.S. was indeed at risk, Treasury Secretary Timothy Geithner said, "Absolutely not. And that will never happen to this country."

In June, Bloomberg's Business Week reported of Moody's Investors Service warning. Unless there was progress in solving the debt problem, the U.S. government's AAA credit rating would be reviewed.

On Wednesday, Bloomberg said Moody's upgraded their threat. Find a solution or face a Double-A rating with no assurance that the Triple-A could be reclaimed even if a default is cured quickly.

Thursday - the Washington Post reported S&P laid down 50 percent odds that the downgrade would come in the next three months.

Obama is losing his cool. He's about to go down in history as the first president to cause America's official financial fall from grace.

On Friday, Obama lied to the American public by saying"the American people are sold" on his plan and that 80 percent of us agree with him, The Hill reported. Every poll disagrees with him. When asked if he had hope that an agreement could be reached, Obama said, "I always have hope," AP reported from his third press conference on this topic. "Don't you remember my campaign?"

Yes, we do, it's been going on since 2008. But there is a difference between "hope" and "action," between campaigning for the presidency and being the president.

"Enough is enough," Obama said when he stormed out of the meeting. "I'll see you all tomorrow."

Indeed, Mr. President. The American people think "enough is enough" as well -- and we'll see you in 2012.

Sources:

Zachary A. Goldfarb, "Deadline to raise U.S. debt ceiling pushed to Aug. 2, Geithner says", Washington Post/Bloomberg

Janet Hook and Carol Lee, "Obama Joins Tense Debt Talks" Wall Street Journal

Sam Youngman and Erik Wasson, "Debt-ceiling talks hit brick wall as President Obama, GOP trade jabs" The Hill

Jonathan Allan and Jake Sherman, "President Obama abruptly walks out of debt ceiling talks" Politico

Laurie Kellman, "Reid: Cantor should not be in debt limit talks", Associated Press

Mandel Ngan, "Obama storms out of debt talks: Republican aide", AFP

Saul Loeb, "Clinton Calls on Obama Not to 'Blink' on Debt-Ceiling Deal", The Atlantic

John Detrixhe, "Moody's Places U.S. on Review for Downgrade As Debt Talks Stall", Bloomberg

Carl Rochelle, "Battle lines drawn on Medicare", CNN

Richard Cowan, "Exclusive: Treasury secretly weighs options to avert default", Reuters

Noel Sheppard, "Media's Debt Ceiling Hysteria Ignores how Bonds, Budgets and Taxes Work", News Busters

Peter Ferrara and Larry Hunter, "How ObamaCare Guts Medicare" Wall Street Journal

Glenn Thrush and Matt Negrin, "No yelling at Obama today", Politico

Rebecca Christie and Ian Katz "U.S. Credit Rating May Be Cut by S&P Unless Lawmakers Agree to Reduce Debt", Bloomberg

Jake Tapper, "Geithner: U.S. Will Not Lose AAA Bond Rating", ABC News

John Detrixhe and Heidi Pryzbyla, "Moody's Says U.S. May Be Cut If No Progress on Debt Limit", Bloomberg Businessweek

John Detrixhe and Daniel Kruger, "U.S. Debt Rating Placed on Review for Downgrade by Moody's as Talks Stall", Bloomberg

Jim Kuhnhenn, "Obama; Chance for 'something big' to calm economy", Associated Press

Alexander Cintron, "President Obama Plays Politics with Debt Ceiling", Associated Content

Sam Youngman and Alecia M. Cohn, "Obama; public is 'sold' on tax increases in a debt-ceiling deal", The Hill

Jim Kuhnhenn, "'Enough is enough,' Obama says, calling for deal", Associated Press