How bad was this deal? It was "the lowest moment of Obama뭩 presidency"

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Mon Aug-01-11 01:53 AM
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How bad was this deal? It was "the lowest moment of Obama뭩 presidency"

Jonathan Chait

The debt ceiling agreement is a horrible piece of legislation. It ratchets down already too-low domestic discretionary spending caps and imposes painful sacrifice on the middle class with little asked of the rich. Obviously, though, you can뭪 assess any deal without asking 밹ompared to what?� Did President Obama get a worse deal than he had to, given the circumstances? And the answer to that question, in turn, depends on when you start the clock, and more importantly, when you stop it. Let me explain.

Going back to December, the Democrats committed a massive blunder by failing to push for a debt ceiling increase. At the time, observers like Ezra Klein were noting how absurd it would be to let Republicans force through a deficit-increasing policy (extending the Bush tax cuts) and then let Republicans stick Democrats with the blame for the debt ceiling. A reporter even asked him about the Republican Party뭩 ability to use this vote as leverage, and Obama seemed not to grasp the point at all. Obama has implied that he couldn뭪 have received a debt ceiling hike, but I don뭪 think that뭩 correct.

Then, last spring, Obama committed blunder number two. Republicans began voicing opposition to raising the debt ceiling, or insisting on massive concessions in order to do so. The correct response here was to refuse to negotiate. Obama simply needed to say, we뭨e raising the debt ceiling the way we always have, because the alternative is catastrophe. We can negotiate any policy change you want, but not with a gun to the head of the American economy. Eventually, the business community would have pressured Republicans to relent. Instead, once Obama ascented to broadening the scope of the debate, business simply wanted a deal to get done, and it pressured both sides to compromise. (It is true that the complicity of the anti-deficit lobby in the Republican hostage gambit made it harder for Obama to insist on keeping the deficit and the debt ceiling separate.)

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The problem, though, is that we can뭪 be sure Obama really intends to draw that line. There뭩 a limit to how much faith one can place in a man who has so badly misjudged his political opponents time and time again. The debt ceiling ransom may be a shrewd strategic retreat, or it may be the largest in a series of historic capitulations. We won뭪 know until the fight over the Bush tax cuts has been settled.

Robert Reich Tweets

Krugman

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Make no mistake about it, what we뭨e witnessing here is a catastrophe on multiple levels.

It is, of course, a political catastrophe for Democrats, who just a few weeks ago seemed to have Republicans on the run over their plan to dismantle Medicare; now Mr. Obama has thrown all that away. And the damage isn뭪 over: there will be more choke points where Republicans can threaten to create a crisis unless the president surrenders, and they can now act with the confident expectation that he will.

In the long run, however, Democrats won뭪 be the only losers. What Republicans have just gotten away with calls our whole system of government into question. After all, how can American democracy work if whichever party is most prepared to be ruthless, to threaten the nation뭩 economic security, gets to dictate policy? And the answer is, maybe it can뭪.

Michael Tomasky

"This is the lowest moment of Obama뭩 presidency. It makes Bill Clinton signing of the welfare reform bill of 1996 look like the founding of the Peace Corps."

Was there a sale on hyperbole-generating machines?

Here's the WH Fact Sheet