Why Obama Owns the Debt-Ceiling Disaster
By Karl Rove
Published July 14, 2011
| The Wall Street Journal
President Obama and Congress face a mess if the federal government hits the debt ceiling Aug. 2. The Bipartisan Policy Center, a Washington think tank, projects that the government will receive $172 billion in revenues between August 3 and August 31, but it is on the hook to spend $306 billion, leaving a shortfall of $134 billion.
On Tuesday, Mr. Obama told Scott Pelley of CBS News that "there may simply not be the money in the coffers" to issue Social Security, veterans and disability checks after August 3.
Not so. The $172 billion in revenues collected over the rest of the month can pay the $29 billion interest charges on the national debt, Social Security benefits ($49 billion), Medicaid and Medicare ($50 billion), active duty military pay ($2.9 billion), Department of Defense vendors ($31.7 billion), IRS refunds ($3.9 billion), and about a quarter of the $12.8 billion in unemployment checks due that month.
There will, however, be no cash for highway construction, no checks for federal workers or retirees, no agriculture payments, no open national parks. Interest rates are also likely to rise if U.S. debt is downgraded, adding massively to the deficit and further damaging the economy. This would be a disaster with no political winners.
The president wants a $2.4 trillion debt-ceiling increase to get him past next year's election—and the deal he's proposing is based on promised future cuts paired with substantial tax increases on households earning more than $250,000 a year.
House Speaker John Boehner proposed matching a debt-ceiling hike with substantial spending cuts. The Congressional Budget Office estimates federal spending at $46.1 trillion over the next 10 years, a dramatic escalation from projections before Mr. Obama took office. Mr. Boehner's modest proposal was to trim that back 5.2% over the decade, but the president balked.
Yet the $4 trillion in deficit reduction that Mr. Obama talks about is shy on details. No one who's attended his frequent negotiating sessions knows what his proposal really is.
The president has made a bipartisan agreement even more difficult by declaring certain spending off-limits to cuts. Mr. Obama's "untouchable" list includes his $1 trillion health-care reform, $128 billion in unspent stimulus funds, education and training outlays, his $53 billion high-speed rail proposal, spending on "green" jobs and student loans, and virtually any structural changes to en lements except further squeezing payments to doctors, hospitals and health-care professionals.
Mr. Obama has offered no evidence since becoming president that he wants to restrain the upward trajectory of government spending. He does want higher taxes to pay for significantly higher federal spending. But he wants Republicans to deliver the tax increases, since Democrats couldn't pass them last year despite controlling both chambers of Congress.
Republicans have wisely declined. Demanding the GOP vote for immediate tax increases that would be offset by vague, future tax cuts conjures up images of Charlie Brown, Lucy and the football. The tax increases would be real—the future tax rate cuts would be imaginary. And Mr. Obama has opposed any serious spending enforcement mechanisms, such as a balanced budget amendment or hard caps on spending...
http://online.wsj.com/article/SB1000...pinion_LEADTop
Last edited by spursncowboys; 07-14-2011 at 03:56 PM.
(Obama's) tone also hasn't helped achieve a comprehensive agreement. The president's two most recent press conferences, in which he accused the GOP of foot-dragging, convinced Republicans that he was interested in scoring political points and attracting independents, not facilitating a deal.
lol Karl Rove
Obama actually called out Boehner and said he was ready to negotiate on that $4 trillion deal. Meaning, if the GOP wanted to make changes to it, that could be arranged. But Boehner walked away from it. What Obama wants is a long term solution until the elections.
What the GOP wants is to have this pop up every 6 months to play more politics.
ready to negotiate on what? Has he given what he wants to cut 4 trillion on? or is it just a number he threw out there?
He had private negotiations with Boehner, and Boehner himself said the number was there, and the reason he wasn't going to take it is because of tax increases, and that he would rather take the $2.1 trillion Biden deal instead. The problem is that he can't get his caucus to agree.
Catch up, this was on the news last week.
You might want to cut him some slack considering he's in a war zone. Just sayin.
Oh, yeah, Karl Rove. There's an unbiased source.
Try reading The Economist editorial that (I think it was) Random Guy posted in the thread on 60 republicans refusing any deal whatsoever.
That source is at least knowledgeable.
If I were Karl Rove, I'd try to sell what he's trying to sell, too.
Come to think of it, if I were Karl Rove, ... it's just too ugly to think about.
lol disaster
lol Rove
lol Murdoch
lol Toros Janitor
lol my biggest fan
I know, that's why I'm telling him to catch up if he can. This stuff was news last week.
Is there a good source with what obama was willing to cut?
You should ask Boehner. He did say he was willing to make cuts and rework both Social Security and Medicare if necessary to get it done. Boehner didn't bite. Just google 'Boehner 4 trillion'.
Oh, and Biden has been in negotiations on a $2.1 billion spending cut with Cantor for months.
No
The deal was "agree to raise taxes now" and "we promise to cut a bunch of in the future after the election".
Anyone that says that wasn't the deal needs to post the specific cuts that were proposed by Obama to take effect immediately
Be careful how you spell that!
My understanding was that the whole thing was going to be one single bill that raised the debt-limit, include the modifications to the different plans to accommodate the cuts, and also stipulate the tax increases starting in 2014.
That cut figure was the calculated savings over a decade.
It was supposed to be an all-in-one package. According to Boehner, he stopped the negotiations when the WH wouldn't agree to bigger cuts than in the Biden deal without increasing taxes.
if fanaticism is enjoying a fool make a fool of himself, signed.
All I could find is what they wouldn't allow to be cut. Which was everything
Not exactly in this case, but your signature is accepted nonetheless, fanboy.
I stopped at karl rove
WSJ is a pitiful Murdoch rag, given huge credibility by running a Rove screed full of bull and lies.
Too bad for Rove the polls say Repugs will get the blame from most Americans if the U.S. defaults.
This. The WSJ, like every other Murdoch rag, isn't even fit to wipe your ass with anymore. My sister and bro-in-law have been subscribers for 15 years. They just canceled and went with Bloomberg.
The only "owner" of the debt ceiling issue is Congress, and more specifically, the GOP controlled House of Representatives. They initiate all bills about matters fiscal. If this goes south, Obama will hang it around the GOP's necks with ease.
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