Wednesday :: Jan 9, 2013

Tying Themselves Into Knots

by Steve

Yesterday's news that the country will hit the debt ceiling two weeks earlier now, in mid-February is actually a good thing: it gives Obama two weeks less to screw things up worse than he already has.

I had thought over the last weekend that Obama would strike a grand bargain after all by the end of February, something along the lines of $900 billion in spending reductions (the amount he already offered Boehner which regrettably contained chained CPI) and $600 billion in new revenue from closing loopholes, for a total of $1.5 trillion over ten years. By doing this, he'd be getting $300 billion more in debt reduction than experts agree we need to stabilize our long term debt situation. This would come on top of the $1.5 trillion in debt reduction from 2011 and the nearly $600 billion in new revenue from the fiscal cliff deal, allowing Obama to show that he's worked to get well over $3 trillion in debt reduction towards the typical goal of $4 trillion cited by the bipartisan committees.

I was feeling pretty good that Obama would hit the road before and after the State of the Union (SOTU) to sell the country on a balanced approach that didn't place the wealthy and corporations ahead of seniors, to stack the deck against the GOP's end-game effort to extort entitlement cuts as the price for not sinking the country into default. But at the end of the weekend, that feeling dissipated when the GOP put out the word that they were now willing to let the sequester take effect at the end of February, with its cuts equally split between defense and non-defense spending over the next ten years. Boehner told the Wall Street Journal that the sequester gave them more leverage over the White House, which was reinforced over the last two days with more talk about a government shutdown and the sequester, and less talk about a debt ceiling default, presumably because the GOP's Wall Street backers have started reminding them where their bread is buttered.

But if your opposition is seemingly less likely to create a default but more likely two weeks later to shut the government down and let the sequester go through, what is the Democrats' best strategy? Let me suggest the following:

1. Use the SOTU to set the right narrative against the GOP.
2. Tell voters the GOP is ready to shut down the government to protect the one percent and hurt Main Street.
3. Lay out a $1.2 trillion plan of equal cuts and revenue and make the GOP reject it in February, threatening a default.
4. When the GOP talks up the sequester, tag the GOP for thrashing defense.
5. Ask voters why the GOP would want to thrash defense, and then still shut down the government.

Make no mistake, I think the sequester does the necessary dirty work on defense, work that Congress itself would never do. As for the bad spending cuts on non-defense spending and programs, Obama can get those back through additional revenue with loophole/haven closures.

But the White House can't let on that they'll willingly let the sequester happen; they need the GOP to think they have leverage, all the while they pound them for cutting defense. Then, at the end of February, hopefully after the GOP caved in some way on the debt ceiling, the White House calls the GOP bluff on the sequester, lets it happen, and hopes the GOP panics and compounds its problem by shutting down the government, destroying them

Steve :: 12:00 AM :: Comments (3) :: TrackBack (0) :: Digg It!