Saturday, September 21, 2013

No Debt Negotiations is Right

Glenn Kessler of Washington Post slams President Obama for his arguments defending 'no negotiations with Congress for Debt ceiling raising' and Conservatives pick up that line immediately. Larry Kudlow, one of the reasonable Conservatives despite his continued faith in discredited policy of 'Tax Cut solution for every problem'; immediately picks up and wonders why is President Obama not negotiating to raise Debt ceiling. Here are the reasons for President to be so clear and adamant in this regard (and he needs to be so stead fast in days to come):

- During remaining years of Obama Presidency, America will need to increase Debt ceiling at least once; probably 2 or 3 times. What things President Obama can offer then to these hungry, irrational 'barbarians knocking on the door'? Delaying ObamaCare by one year will be already done by that time if Obama listens to Kudlow and other conservatives. If Republicans get even one more seat in 2014 Mid-Term elections than what they have today, that will be construed as mandate to dismantle ObamaCare. On the other hand if Republicans loose some ground, sanity is not going to come back. Romney loss in 2012 has not made GOP wiser but rather even more extreme. Which means GOP will be rallying to dismantle ObamaCare and ginning their base for 2016 election with the promise of total turning back on healthcare. President Obama does not have anything which will satisfy these hungry folks in the next Debt ceiling increase. Would he be then forced to dismantle Social Security or Medicare or 'zero tax for rich, I mean for job creators'? 

- Looking further ahead,  it is clear that American Politics is unlikely to be any different than the hyper partisan divide it has today. No President then wants to undermine future presidents so much so that Presidency essentially becomes 'rubber stamp / care taking' Presidency in domestic affairs. That is what repeated 'bending of President for Debt Ceiling' will do. Glenn Kessler is fine to evaluate President Obama's statement strictly on factual basis only since his job is not to consider politics. But what past politics tell us is in absence of hyper partisan Congress, there were avenues to 'negotiate and compromise' and that 'give and take' retained some incentive for Presidents to talk to Congress. What incentive President Obama has when every indication is 'entering into negotiations' is a slippery path? It is not that White House is not ready for offering entitlement reforms. That is what Obama White House Budget has been trying to do. How many of those entitlement reforms Republicans have taken seriously to negotiate and compromise about? In fact it appears that after accusing Obama to de-fund beloved Medicare to fund ObmaCare in 2012 campaign and still facing wrath of Americans for talking reduced entitlements; Republicans are hesitant to talk about any entitlement reform in lieu of increasing Debt Ceiling. In absence of any real reform proposals, opposing ObamaCare comes handy. 

Pilling of National Debt does not happen without complicity of Congress. Bush Presidency pilled on debt for Iraq War and Tax Cuts for Rich (which CBO is saying will still cost USA when President Obama only got half loaf there). In fact President Obama can comfortably claim that today's Debt is what Congress pilled up since ObamaCare has not yet kicked in at all. It is the Congress which is responsible for America's 'purse' and President cannot / should not allow Debt Ceiling as hostage taking. Let Republicans win elections and make whatever changes they want. Kicking in of ObamaCare implementation is far more critical and it will tell America what things ObamaCare got right and what things need to be improved further. Throwing or delaying the act cannot be on table. For that matter when it comes to Debt Ceiling, nothing should be on the table to negotiate since entitlement reforms during budget talks is a right way to control deficit. If President Obama ensures that, it will be one of the most enduring legacies of his presidency.

Update - Another danger White House or any rational political player would like to avoid is, if President Obama succeeds Republicans to drop their ObamaCare de-funding requirement but concedes something else in return; Republicans can very easily argue about how dear ObamaCare has been to Democrats that they did not mind compromising so many other things. For every glitch or difficulty in implementing ObamaCare law, it will be much easier for Republicans to highlight what other things were compromised by Democrats to get purchase. Given that, not to enter this quagmire of negotiating over ObamaCare is a rational response. All negotiations / compromises apart from ObamaCare can be done in the context of regular budget negotiations. Only when composition of Congress and its electoral politics allow members to adopt more positive attitude to improve the law further, should Democrats open negotiations about ObamaCare.

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