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Obama, Not GOP, Retreats on Debt Ceiling

Posted By Tom Blumer On January 24, 2013 @ 12:39 am In Daily Mailer,FrontPage | 8 Comments

If it’s so obvious that the President and Democrats in Congress have the upper hand in discussions about raising the nation’s debt ceiling, why did Barack Obama and his administration backpedal on a threat he made just ten days ago?

At his first term-ending victory lap news conference on January 14, Obama told reporter Major Garrett that he would not accept a short-term extension of three or fewer months of “the so-called debt ceiling” — that’s what a sneering Obama actually called it in his introductory remarks — in these specific words:

[W]e shouldn’t be doing this on a one to three-month timeframe. Why would we do that? This is the United States of America, Major. What, we can’t manage our affairs in such a way that we pay our bills and we provide some certainty in terms of how we pay our bills?

… I’m not going to have a monthly or every-three-months conversation about whether or not we pay our bills. Because that in and of itself does severe damage. Even the threat of default hurts our economy. It’s hurting our economy as we speak.

On Wednesday, the House of Representatives led by Republican Speaker John Boehner passed a three-month extension of the debt ceiling from February 18 to May 19. It included an interesting but debatably effective provision that is “designed to stop all pay to members of Congress until they pass a budget.”

The previous day, as the White House signaled that it “welcomed the (expected) move,” Jim Kuhnhenn at the Associated Press, aka the Administration’s Press, falsely characterized it as a “retreat” — by the House, with Obama headlined as having stood his ground. Nice try, Jim and AP; no sale. Even though you and the rest of the press won’t report it, the reality is that Barack Obama is the one who retreated from a supposedly firm position on the very first day after his second inauguration.

Please note that the “bills” Obama wants Congress to unconditionally “pay” were almost entirely created or committed to during the first half of Obama’s first term when Democrats controlled both houses of Congress.

Reported spending during the final eight months of fiscal 2009 Obama’s first eight months in office – after correcting for accounting shenanigans – averaged almost $280 billion per month, a record up to that point. Ordinarily, one would say that Obama inherited that level of spending from predecessor George W. Bush, as the budget for fiscal 2009 should have been a done deal by September 2008. But it wasn’t. Then-House Speaker Nancy Pelosi and the Senate Majority Leader Harry Reid (with then-Senator Obama firmly in their corner), banking on Obama defeating John McCain in November, effectively forced Bush to either accept continuing resolutions extending past the end of his term or risk the media-fed wrath of voters by shutting down the government just as the economy was tanking and the Democrat-driven housing mess arrived.

Once Obama took office in January 2009, Pelosi, Reid, and Obama, that terrible triumvirate of Democratic Party plunderers, worked on ramping up spending immediately — and as it has so far turned out, irrevocably — by passing a “stimulus” plan which stimulated nothing except higher spending and economic malaise.

Fiscal 2009 was just a warm-up. Since April of that year, Reid’s Senate has refused to pass a budget, putting spending into autopilot. Outlays (again after adjusting for accounting tricks) averaged $298 billion per month in fiscal 2010, and broke the $300 billion per month barrier in fiscal 2011.

Faced with Reid’s intransigence, Speaker John Boehner and his Republican House majority lacked the nerve to change the trajectory of spending during the rest of fiscal 2011, betting that they would have a better shot trying to control spending in fiscal 2012. Though in hindsight Boehner’s decision was a tactical blunder, that doesn’t change the fact that Pelosi and Reid, with Obama eagerly accepting their continuing resolutions, are responsible for the $9.4 trillion in spending, the $3.7 trillion in deficits, and the $4.2 trillion increase in the national debt which occurred from February 2009 through September 2011. Those Democrat-caused “bills” are the ones Obama wants the current Republican House to unconditionally “pay.”

Though it’s way too early to give the House any positive credit, it clearly didn’t cave to Obama’s press conference demand. Wednesday afternoon, Reid, who has usually thrown spending-related House bills into the trash can upon receipt and prevented the Senate from even considering them, falsely claimed victory and said that the Senate will pass the House bill as is.

Another AP report Wednesday by David Espo characterized the Republicans’ move as “retreating with a purpose.” The purposeful retreaters are really in the White House.

As I noted on Monday, there are good reasons to believe that the economy is once again sputtering. Economic growth in the fourth quarter appears to have slowed by at least half from the previous quarter. Job growth has continued to be unimpressive compared to what is needed to make a meaningful dent in the number of unemployed, under-employed, and discouraged. Though it was masked by a quirky seasonal adjustment calculation, raw initial jobless claims for the week ended January 12 were higher than the analogous week in 2012, the first time that has happened in a truly comparable full business week comparison since October 2009.

My take on the political maneuvering is that the White House is anticipating poor economic performance during the early months of 2013, and that it is looking for someone other than themselves to blame. So, with the help of their new Organizing for Action shock troops, they’ll try to claim that Republicans are responsible for foisting a short-term debt ceiling extension on Reid and Obama (those poor helpless creatures), creating an unmanageable atmosphere of economic uncertainty.

Republicans, on the other hand, may have been emboldened by the belief that continued economic underperformance will work in their favor, expecting public opinion to move into their corner as more Americans become convinced that our struggling country cannot afford a never-ending regime of reckless spending.

Who’s right? I don’t know, but it appears that the playing field may be more level several months from now than the left and press would like us to believe.

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