Monday, March 19, 2012

Debt Ceiling Drama

For sure, that is the impression Washington Post story gave - that White House was almost about to agree with the Speaker, but then drew cold feet. Basically, Obama Administration became reluctant to walk with the Speaker because the Gang of Six proposal came out public with a substantial support in Senate, including few Republicans. White House realized that it was on 'limb' as far revenue increase goes; it was agreeing 'way too much' to Tea Party.

Core mistakes by Administration here were:
- First of all leaving their original position of reasonable tax increase as a part of the final deal. Such 'deviation on policy' ground was really wrong. I suspect it would have been Daley and Geithneir behind such follies while President himself did not realizing what was he bringing on the block for 'sale'. 
- Next, how come Obama Administration was so blind sided that it would not understand what the Gang of Six was up to? After all it simply did not learn any lessons from ObamaCare drama - that White House needs to be plugged in with the Congress and it should not leave it to the Congress to drive such important matters. In short, where has been the leadership?

If the story in Washington Post is true (that is a big 'if' since Ezra Klein was giving slightly different flavor of this 'inside base ball' for a while); this whole thing is really 'bad' for Obama Politically. It simply shows Obama Administration out of its depth when it comes to dealing with serious matters of Debt Management. It has very poor sense of timing as well as adopts very poor tactics of negotiations. It was foolish to 'concede on the policy of serious revenue increase'. One understands that when it comes to negotiations and political compromises, everything is on the table. But that does not mean 'you sale your house'. There must be some core principles which must be non-negotiable, no matter what is at stake.  Slipping on that as well as not having a 'judgement where the Senate is heading'; both appear political blunders of highest proportion.

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