What Price More Debt?

“Obama has an opportunity to improve his standing among independent voters — many of whom deserted the Democrats in the 2010 midterm election — by working with Republicans toward bipartisan deficit-reduction measures. . . Obama has to thread a needle between his new centrist position and his old liberal base; on that front, this month's battle over the debt ceiling offers both opportunity and peril. The 2012 presidential election could be won or lost in the next three weeks.”

-- Doyle McManus, Los Angeles Times

Only trouble is, McManus misreads where the real resistance lies to a compromise agreement. It is where David Brooks said it was a week ago—with House Republicans. Brooks and most of the chattering class think the Republicans are crazy, acting like children, separated from reality. It’s better to understand where they are coming from. As CNBC’s Larry Kudlow points out:

IBD/TIPP pollsters have just released an incredible result. Get this: The public rejects a debt-ceiling increase by a huge 58% to 36%. That includes 59% of independents and even 38% of Democrats. . . Tea party populists are saying no, no: We can still make good on our debt, but this debt bill is the only leverage we have to force Washington to cut spending.

So this crazyness is larger than the House tea party caucus. It includes the general public.

Still, why would House Republicans resist what to me seems a great deal, match the debt increase total of $2 trillion (amount needed to get the country's spending past 2012) with $2 trillion in budget cuts, while taking tax increases off the table? Isn’t that everything Republicans want?

Writing in the conservative National Review, Andrew Stiles explains why such a deal isn’t enough. It’s because many Republicans view last Spring’s budget cut negotiated with the president as mostly smoke and mirrors. As Stiles reports,

Rep. Tom McClintock (R., Calif.) warns that there is still “great concern” among members who felt extremely let down by the budget deal negotiated in April, which turned out to be full of phony spending cuts and gimmicks. He said the bad taste left over from that deal could make members more hesitant to support a deal negotiated with the White House. “I think there’s a general belief that we learn from our mistakes,” he says.

These Republicans want a balanced budget amendment, the passage of which would lead us away from deficit spending—permanently. Of course, it takes a 2/3rds vote to get a constitutional amendment out of the House, and Republicans don’t have those votes.

To me, it’s more realistic for Republicans to agree on the real budget cuts themselves—no negotiating with the White House—and pass the cuts over to the Senate as a fait accompli. Then let the Senate send the country into default.