RANCHO SANTA FE, Ca., July 12, 2011 – Picture the following: President Obama, Speaker Boehner, House Minority Leader Pelosi, Senate Majority Leader Reid, and Senate Minority Leader McConnell sitting around a table in the White House holding dollar bills to their foreheads. Who is willing to bet the entire U.S. economy that they have the best hand?
Unfortunately for us, it seems like the answer is: all of them! The game goes like this.
The Republicans open by betting that people will understand that Congress is spending more money than it receives, so it must reduce its spending. That seems to be a simple enough concept.
Then, the Democrats “see” that bet by claiming that Congress just needs to receive more money (i.e., euphemistically, generate more revenue; non-euphemistically, raise taxes). That seems simple enough as well. It’s like having someone cover your losses.
The Republicans “see” that bet by claiming that the influx of money would just serve to enable the bad behavior (a little like asking your Sponsor to buy you a drink after an AA meeting).
Then, they “raise” the bet by demanding cuts to sacred entitlement programs like Social Security and Medicare.
The Democrats “see” that bet by claiming that the proposed Republican cuts will hurt the poor, the sick, and the elderly. In horse racing, that would be referred to as a trifecta!
Then, the Democrats “raise” the bet by claiming that the Republicans are only opposed to considering revenue opportunities (i.e., raising taxes) because they have an affinity for private jets and rich oil companies.
Who doesn’t hate the people in those categories?
And with that, the Democrats go “all in;” a strategy bolstered by a recent Congressional seat win in New York in which the same argument carried the day.
Much to the shock of some onlookers, the Republicans “call” that bet. It seems that they are relying on the fact that they control the House at this point (that’s House of Representatives rather than “the House” in Las Vegas terms).
Now, it’s really getting interesting!
Meanwhile, President Obama has been playing by himself. Somehow, he managed to “pass” while the early bets were being placed. No one really understands how he consistently has avoided the rules by which everyone else has to play, but he’s been getting away with this for some time now.
Basically, he’s been “seeing” every bet but not meaningfully influencing the game with a “raise” of his own. If this were a game of pool, he’d be playing a “safety” … just trying to leave his opponents without a shot in the hope that they scratch.
The President has tried to publicly position himself as a centrist (much as President Clinton did to survive a disastrous mid-term election and to secure his own re-election). Of course, behind closed doors, the wolf may be doffing his sheep’s clothing. We probably will never know.
What we do know is that the President didn’t venture into the game until the very last moment. Perhaps he believes there is merit in waiting until the storm clouds have gathered; the presidential equivalent of making sure that no one can see his shadow when he comes out … lest we be cast into another six weeks of an economic mire.
When President Obama did choose to engage, he provided “Change We Can Believe In” … or at least, the change to which we have become accustomed.
In his most recent Press Conference, the President stated, “The good news is that all the leaders continue to believe, rightly, that it is not acceptable for us not to raise the debt ceiling and to allow the U.S. government to default. We cannot threaten the United States’ full faith and credit for the first time in our history.”
Don’t bother trying to reconcile that with his statement as a Senator in March of 2006 when he said, “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.” Some things are better left alone. Besides, he had to be right one of the times!
In his Press Conference, President Obama went on to say, “I’ve been hearing from my Republican friends for quite some time that it is a moral imperative for us to tackle our debt and our deficits in a serious way. I’ve been hearing from them that this is one of the things that’s creating uncertainty and holding back investment on the part of the business community. And so what I’ve said to them is, let’s go.”
This sounds good. However, you just have to ask: why has it taken “quite some time” to say “let’s go?”
Of course, the President has taken a risk in suggesting that cutting spending may be the answer. It’s not a position that his base wants to support. So, it has been politically critical for him to slip some “revenue” increases into the mix to shore up any vulnerability he has within his party.
He did a nice job of accomplishing this in a nebulous manner by saying, “… it is possible for us to construct a package that would be balanced, would share sacrifice, would involve both parties taking on their sacred cows, would involve some meaningful changes to Medicare, Social Security, and Medicaid that would preserve the integrity of the programs and keep our sacred trust with our seniors, but make sure those programs were there for not just this generation but for the next generation; that it is possible for us to bring in revenues in a way that does not impede our current recovery, but is fair and balanced.”
The problem is that both Parties were already “all in” at this point.
House Minority Leader Pelosi had already conducted her own Press Conference in which she stated, “… we do not support cuts in benefits to Social Security or Medicare.”
Speaker Boehner subsequently said, “… my message to the White House over the last several months has been real simple: the spending cuts have to be larger than the increase in the debt limit.”
Senate Minority Leader threw fuel on the fire by saying, “After years of discussions and months of negotiations, I have little question that as long as this President is in the Oval Office, a real solution is probably unattainable.”
Only Senate Majority Leader Reid has been reasonably quiet on this matter. Considering that he barely won re-election against a relatively unqualified opponent, looking for cover might be his best tactic at this point.
Since then, Speaker Boehner has suggested a less aggressive, interim solution to protect against a default. Let’s be honest; he also suggested it to maneuver his party away from the corner into which the President was trying to paint them.
However, President Obama proclaimed, “I will not sign a 30-day or a 60-day or a 90-day extension. That is just not an acceptable approach.”
He later reiterated his position saying, “This the United States of America and, you know, we don’t manage our affairs in three-month increments. You know, we don’t risk U.S. default on our obligations because we can’t put politics aside.”
Yet, Secretary Geithner has told us that, “… default is not an option, failure is not an option.” So, how can the President rule out an interim solution that would buy more time?
The answer seems to lie with this particular presidential comment: “And if we think it’s going to be hard — if we think it’s hard now, imagine how these guys are going to be thinking six months from now in the middle of election season where they’re all up. It’s not going to get easier. It’s going to get harder.” It’s apparently all about politics.
Luckily, the President has provided some clear leadership. “So we might as well do it now — pull off the Band-Aid; eat our peas.” Are you laughing yet? It’s almost as funny as “Shovel-ready was not as … uh … shovel-ready as we expected.”
You know that the stakes are high when the President begins to resort to threats. “I cannot guarantee that those (Social Security) checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it … this is not just a matter of Social Security checks. These are veterans’ checks, these are folks on disability and their checks. There are about 70 million checks that go out.” At least, that’s what the President said in an interview with CBS Evening News.
So, what’s the truth?
By definition, a default would mean that the United States would not be able to pay the principal or interest on its debt obligations. Our country receives about $200 billion in funding each month. The interest on its debt is roughly $20 billion. Do the math.
We could also meet our current obligations with respect to Social Security, Medicare, Medicaid, and veterans and active military as well.
What would collapse? Other government spending!
They’d have to “tough it out.” No more Congressional picnics on the White House lawn (June 15th). Congress and the White House might have to cut their staffs (just like Cisco Systems has announced it will do). They might even have to eliminate some useless programs, consolidate agencies, and liquidate government-owned buildings … just like the President said he was going to do in his State of the Union Address and speech to the United States Chamber of Commerce at the beginning of this year.
If you need some additional perspective, during the Q&A session of the President’s Press Conference, Chip Reid (CBS News) noted, “The latest CBS News poll showed that only 24 percent of Americans said you should raise the debt limit to avoid an economic catastrophe. There are still 69 percent who oppose raising the debt limit. So isn’t the problem that you and others have failed to convince the American people that we have a crisis here, and how are you going to change that?”
To which the President responded: “Well, let me distinguish between professional politicians and the public at large. The public is not paying close attention to the ins and outs of how a Treasury option goes. They shouldn’t. They’re worrying about their family; they’re worrying about their jobs; they’re worrying about their neighborhood. They’ve got a lot of other things on their plate. We’re paid to worry about it … the professional politicians know better.”
Do you feel better now … knowing that “professional politicians” are in charge? It’s amazing that you can pay your mortgage, feed and clothe your family, and balance a checkbook without their help.
Thankfully, the President indirectly suggested one more way to solve the problem. He said, “… if you don’t do the revenues, then to get the same amount of savings you’ve got to have more cuts, which means that it’s seniors, or it’s poor kids, or it’s medical researchers, or it’s our infrastructure that suffers. And I do not want, and I will not accept, a deal in which I am asked to do nothing, in fact, I’m able to keep hundreds of thousands of dollars in additional income that I don’t need, while a parent out there who is struggling to figure out how to send their kid to college suddenly finds that they’ve got a couple thousand dollars less in grants or student loans.”
It seems we have a lot of “professional politicians” who fly around in private jets, drink expensive bottles of wine, and “keep hundreds of thousands of dollars in additional income (they) don’t need.”
Perfect! To all of you “professional politicians” out there, I say: redistribute your wealth. Give your excess money to the government to pay down the national debt. Give it to charity to help the poor. Donate it to medical research to reduce the cost of health care. Invest in start-up businesses to create jobs. I could go on, but you must have more ideas than me. After all, you’re “professional politicians” … and I just have common sense.
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T.J. O’Hara is an internationally recognized author, speaker, and strategic consultant in the private and public sectors. In 2012, he emerged as the leading independent candidate for the Office of President of the United States and the first nominee of the Whig Party in over 150 years.
This article first appeared in T.J. O’Hara’s recurring column, The Common Sense Czar, in the Communities Section of The Washington Times.