Let’s face it, Obama screwed the pooch on the debt ceiling. Where does he go from here?
This morning on MSNBC’s “Morning Joe” President Obama’s economic adviser Gene Spalding discussed the deal to raise the federal debt limit that was reached yesterday. He praised President Obama, saying, “The president didn’t give one inch. The president made clear, while he was willing to compromise, he was not willing to allow anyone to hold our economy or government hostage by using the threat of default.”
It sounds like the Administration is attempting the art of Orwellian double speak that the Republicans often deploy with mastery—for the reality of what occurred in the debt negotiations was the exact opposite: Obama made it clear that he would allow Republicans to hold our economy and government hostage using the threat of default. They did, and they did so effectively.
John Boehner proudly said of the debt deal reached yesterday, “There is nothing in this framework that violates our principles. It’s all spending cuts. The White House bid to raise taxes has been shut down.” While he outwardly describes the party’s “principles” as “small government,” the real principle he’s referencing is protecting corporations and the rich.
The debt deal agreed to yesterday is nothing if not a referendum on the philosophy of American society: Obama wanted to both increase federal revenues through modest tax increases for the wealthiest Americans—those who can most easily afford to pay slightly more—and by closing tax loopholes for corporations. This strategy implicitly champions what is left of the middle class. Republicans, meanwhile, mandated that the rich pay not a dime more and that tax loopholes for corporations stay wide open—the same corporations, mind you, that can now make unlimited campaign donations under last year’s Citizens United ruling.
Obama not only gave up “an inch,” he gave up his entire position. He signed off on a plan to cut spending without raising revenue by a nickel and to keep corporate tax loopholes wide enough to fly a private Gulfstream G650 through with plenty of clearance.
As Jonathan Chait from The New Republic writes this morning, Obama committed a major tactical error last year when he allowed the Bush tax cuts to continue (a deficit increasing measure) without insisting that the federal debt limit be increased to compensate for it.
This left Obama on his heels to negotiate a debt limit increase this spring, and gave the impression that he was a poor negotiator willing to give a whole lot more than an inch.
So where does he go from here?
Next year we will face a similarly rancorous fight over the Bush tax cuts, which were extended last December and now set to expire at the end of 2012. Allowing them to expire will raise taxes somewhat at all income levels and provide the country with a badly-needed estimated $4 trillion in revenue over ten years. Paired with the $2.4 in spending cuts Obama just agreed to yesterday, this should go a long ways toward getting our financial house in order.
Republicans are now 2 for 2 in negotiating finances with the president. If Obama is going to finally realize some increase in tax revenues by insisting that the Bush tax cuts expire next year, he’s going to have to come up with a different war plan than the one he’s been following. The way things have been going, Republicans are no doubt looking forward to the fight.
August 01, 2011 at 2:31 pm, Anonymous said:
Don’t be silly. The DEMOCRATS screwed the pooch because they stayed home during the midterms. Get over it.
August 01, 2011 at 2:37 pm, Gaboon Viper said:
One term.
August 01, 2011 at 2:38 pm, Adres Gonzalez said:
Exactly all you liberal morons and democrats who
stayed home for the 2010 election, you have only yourselves to blame for letting
this bunch of extremists into congress. If you had turned out in mass like you
did for the presidential elections, we wouldn’t be having this
discussion…Sissies!
August 01, 2011 at 2:43 pm, Neutral said:
who is responsible for this MASSIVE debt in the first place? Republicans!
August 01, 2011 at 2:52 pm, anon said:
you mean republican extremists? Because it seems that they want to dissolve the middle class. Hmm why dont you go read about russia before the USSR. You will see what happens when the middle class is gone.
August 01, 2011 at 2:38 pm, Adres Gonzalez said:
Exactly all you liberal morons and democrats who
stayed home for the 2010 election, you have only yourselves to blame for letting
this bunch of extremists into congress. If you had turned out in mass like you
did for the presidential elections, we wouldn’t be having this
discussion…Sissies!
August 01, 2011 at 2:38 pm, Adres Gonzalez said:
Exactly all you liberal morons and democrats who
stayed home for the 2010 election, you have only yourselves to blame for letting
this bunch of extremists into congress. If you had turned out in mass like you
did for the presidential elections, we wouldn’t be having this
discussion…Sissies!
August 01, 2011 at 2:38 pm, Adres Gonzalez said:
Exactly all you liberal morons and democrats who
stayed home for the 2010 election, you have only yourselves to blame for letting
this bunch of extremists into congress. If you had turned out in mass like you
did for the presidential elections, we wouldn’t be having this
discussion…Sissies!
August 01, 2011 at 2:31 pm, Anonymous said:
Don’t be silly. The DEMOCRATS screwed the pooch because they stayed home during the midterms. Get over it.
August 01, 2011 at 2:31 pm, Anonymous said:
Don’t be silly. The DEMOCRATS screwed the pooch because they stayed home during the midterms. Get over it.
August 01, 2011 at 2:31 pm, Anonymous said:
Don’t be silly. The DEMOCRATS screwed the pooch because they stayed home during the midterms. Get over it.
August 01, 2011 at 2:31 pm, Anonymous said:
Don’t be silly. The DEMOCRATS screwed the pooch because they stayed home during the midterms. Get over it.
August 01, 2011 at 2:31 pm, Anonymous said:
Don’t be silly. The DEMOCRATS screwed the pooch because they stayed home during the midterms. Get over it.
August 01, 2011 at 2:31 pm, Anonymous said:
Don’t be silly. The DEMOCRATS screwed the pooch because they stayed home during the midterms. Get over it.
August 01, 2011 at 2:31 pm, Anonymous said:
Don’t be silly. The DEMOCRATS screwed the pooch because they stayed home during the midterms. Get over it.
August 01, 2011 at 2:31 pm, Anonymous said:
Don’t be silly. The DEMOCRATS screwed the pooch because they stayed home during the midterms. Get over it.
August 01, 2011 at 2:36 pm, Hobbes80 said:
The republicans would be wise to use the expiration of all the bush tax cuts as leverage to get more spending cuts when the time comes…. and I’m sure they will. The cuts were a joke, as most of what comes out of washington these days.
August 01, 2011 at 2:36 pm, Phil_geo said:
This isn’t completely true, since $1.5 Trillion in deficit reductions remain to be decided by a committee, and Obama has said he will veto those cuts unless they eliminate the Bush tax cuts. Obama may still get his revenue next year.
August 01, 2011 at 2:38 pm, BarryLikesToSpend said:
You are an idiot if you think the GOP is “2 for 2″ in negotiations with Obama. There are no immediate spending cuts in either. Thus, we’re shamefully handing over our $14.5 Trillion in debt to our kids and grandkids – all in the name of BIG government and special interest loopholes, earmarks, subsidies and tax credits.
Do your homework before you bless us with your editorial/political opinions!
August 01, 2011 at 2:38 pm, BarryLikesToSpend said:
You are an idiot if you think the GOP is “2 for 2″ in negotiations with Obama. There are no immediate spending cuts in either. Thus, we’re shamefully handing over our $14.5 Trillion in debt to our kids and grandkids – all in the name of BIG government and special interest loopholes, earmarks, subsidies and tax credits.
Do your homework before you bless us with your editorial/political opinions!
August 01, 2011 at 2:38 pm, BarryLikesToSpend said:
You are an idiot if you think the GOP is “2 for 2″ in negotiations with Obama. There are no immediate spending cuts in either. Thus, we’re shamefully handing over our $14.5 Trillion in debt to our kids and grandkids – all in the name of BIG government and special interest loopholes, earmarks, subsidies and tax credits.
Do your homework before you bless us with your editorial/political opinions!
August 01, 2011 at 3:05 pm, anon said:
ya this sites writers are kinda dim, you are right. This country is doomed for failure the way it is. I really wish Ron Paul would get in there. He would force bipartisanship by his centrist values and thoughts, but also get rid of the bullshit that goes on between the government and the states.
August 01, 2011 at 2:38 pm, BarryLikesToSpend said:
You are an idiot if you think the GOP is “2 for 2″ in negotiations with Obama. There are no immediate spending cuts in either. Thus, we’re shamefully handing over our $14.5 Trillion in debt to our kids and grandkids – all in the name of BIG government and special interest loopholes, earmarks, subsidies and tax credits.
Do your homework before you bless us with your editorial/political opinions!
August 01, 2011 at 2:39 pm, Anonymous said:
The words “leadership” and “Obama” cannot be used in the same sentence.
August 01, 2011 at 2:39 pm, Walter Price said:
Hopefully there will be Nobama 2012.
August 01, 2011 at 2:40 pm, Guest said:
Great work berating the President for a “bad deal” until such time as the House republicans are tricked into passing it. Shhhh — don’t mention that the President saved the social safety net from suffering so much as a single tear, and secured the continued scheduled expiration of the Bush tax cuts, along with getting rid of the waste identified by the Biden commission and getting trillions in new borrowing authority today for cuts that don’t kick in for another 2 years.
I assume you’re not so thickheaded, though, as to believe your own rhetoric here.
August 01, 2011 at 2:41 pm, Anonymous said:
The author sounds like a really bitter lib. Obama will get the power to borrow and spend 2.4 trillion and run the country deeper in debt, He will be gone in another 1 or 5 years. What does he care?
August 01, 2011 at 2:41 pm, USInvestor said:
Wow that was a severely biased article if I’ve ever read one. You’ve got to realize that the ‘rich’ are the folks who created the corporations and, now, provide the general public with both the jobs and the inexpensive products that we now enjoy. This has been nothing more than a manipulative us vs. them mentality and Obama’s been using it for years.
August 03, 2011 at 10:03 am, Josh said:
Dont be ridiculous, corporate culture in america is a joke and causes some of its biggest finical and social issues. Just look at the Murdoch case at the moment. There is extensive corruption, the rich need to be taxed, the rich are only getting richer since the economic crash and regulare people are who pay every time yet seem not to have the power to change anything.
August 07, 2011 at 1:08 am, TruthInNumbers said:
This is a hugely erroneous belief. Consumer demand is what “creates” jobs, whereas the rich simply employ them. When execs of corporations are awarded millions of dollars in bonuses, do they immediately go out and hire a bunch of people? No. Do they go out and spend it all to stimulate the economy? No. It’s the spending by middle and lower classes that creates demand. This ignorant concept that we “can’t tax the rich cuz they make jobs!” is one of the hallmarks of the GOP propaganda machine that people like you just eat up with a spoon and ask for more.
August 01, 2011 at 2:45 pm, Andrew Gerdel said:
Thank God somebody is protecting the rich. The majority of Americans pay NO federal income tax, leaving the smartest, most successful, most industrious Americans to pay the bill. Let’s fix the root problem here: all American’s should pay a reasonable percentage in taxes. The current setup is pure, un-American BS.
August 01, 2011 at 2:46 pm, Disgusted said:
Guess most people are blind to the truth about both parties. The Democrats did raise taxes on the wealthy in the Obama Health Plan and the Republicans don’t talk about it… in fact no one is talking about it. The Tea Party and us citizens need to replace all of those egotistic liars in the coming elections and send a strong message to those that would be elected. For me, let’s just have a consumption tax on everything and everyone pays versus the 41% who pay nothing and live off us that pay and some say those rich folks make up less than 2% of the tax payers… the problem is not them nor the solution. Read an excerpt from By Janice Revell, contributor @FortuneMagazine July 22, 2011: 2:03 PM ET about The Rising Impact of Stealth Taxes!
Two of the new stealth taxes were created by last year’s landmark health care reform bill. First, the Medicare payroll tax is going up. The tax is now 2.9% on all wages; employers and employees each pay 1.45%. Starting in 2013, individuals making more than $200,000 (and couples making more than $250,000) will have to kick in an additional 0.9% on wages above that amount.
99Print
A second, much heftier increase also takes effect in 2013, in the form of an unprecedented new 3.8% Medicare tax on investment income. It will strike filers whose “modified adjusted gross income” — roughly speaking, wages plus investment income — tops $200,000 for individuals or $250,000 for couples. (The tax will apply to whichever is less: investment income or the amount by which modified adjusted gross income exceeds the income threshold.) Investment income will include taxable capital gains, dividends, interest income, annuities, royalties, and rents. The thresholds for both of the new Medicare taxes will not be indexed for inflation. So they’ll snag an increasing number of taxpayers over time.
Finally there’s the taxation of Social Security benefits. In 1984, when the Social Security system faced a funding crisis, Congress enacted a law to make the wealthiest recipients pay income taxes on their benefits. Specifically, up to 50% of Social Security benefits became taxable when half of these benefits, plus a retiree’s other income — including retirement plan payouts and investment income — exceeded $25,000 a year ($32,000 for couples). Back then, only about 10% of retirees had incomes that topped that level. In 1994 a second layer of tax was put in place: 85% of your Social Security benefits became taxable if half of your Social Security benefit plus your “other” income topped $34,000, or $44,000 as a couple.
Once again, none of those crucial thresholds were indexed to inflation; today the Social Security tax still kicks in at $25,000. As a result, about a third of retirees are now paying federal income tax on their Social Security benefits. A decade from now, an estimated 45% will owe the tax.
August 01, 2011 at 2:48 pm, Me said:
Many will end up voting Republican in 2022 because they are upset with this
But that will go from the frying own to fire as the GOP and conservative parties have shown the want to preserve corporate welfare and keep the rich happy as the export jobs. The right has far too many who do not believe science (except as accepted by the church-so 13th century),and think they can pray themselves out of problems we cause.
August 01, 2011 at 2:50 pm, anon said:
Obama is not equal to epic fail, America is equal to epic fail. Our forefathers said ” If America ever has a federal bank then we will become as evil as their enemies (england).” Guess what? The federal bank is here and guess what it is destroying our economy through shrewd business tactics mind you. However, they arent looking out for the common man. IF the rich keep getting richer and the poor keep getting poorer. We will see a new civil war, just like history. America is the longest standing democracy in history, it wont be around much longer.
August 01, 2011 at 2:53 pm, J Berkley said:
And the reason we want to keeping looking more and more like a huge continental soviet style government, instead of governing more locally, is what? What’s so good about this? Why do we continue to feed this thing so that congress can make it legal for corps to continue to sock it to us and ruin our country. Wake up, Alex, all these boys and girls who go to DC play the same game, Republican, Democrat or whatever. Same with most state governments. Look up on one of the many web sites that lists lobbyists and there expenditures. Last time I checked most of those listed are folks who I shell out money to just to live. I’m not represented. Are you.
And Alex, could I trust you more if I could run down to the local or regional govt to rattle your cage or would I trust you more if I sent you letters, emails, phone calls and got lame canned responses. I think I would trust you more if you were local, and it would sure be easier to get you out and somebody else in. Most districts are drawn to discourage change. Oh and my swell rep let everybody know that the guy from General Electric was in his office just the week before to let him know that GE would probably be ok with paying some tax. Boy, that made me feel good.
Yeah, Alex, just turn on C-span and listen to the same old crap. What does it mean to you? Project it out another 10 or 20 years. What will change it?
August 01, 2011 at 3:02 pm, anon said:
haha USSA united socialist states of america? Sounds good to me
. Power to the people
August 01, 2011 at 2:55 pm, 3rdParty! said:
@AlphaFactor- Totally agree with your comment. Democracy is an active sport and while extremist continue to prevail over and over on the news reel, those who believe themselves to be unheard do not bother to speak/act, very little if at all. Obama needs to be challenged by Democrats and more so 2012 looks like a better year for third party candidates to imposed their will on the race though Dems will likely spend much of the funding to narrow the race between GOP and the Ass**** aka the two headed snake.
August 01, 2011 at 3:06 pm, In The Middle said:
wow, the subtext of this article and authors opinion in general misses the mark of interesting/original and anything remotely insightful by miles. how does that saying go “if you don’t have anything good (relevant) to say….”. alex, get over it. obama did his job for the week, when the man is asked to weigh default vs anything he should pick anything every time, GET IT. i suggest you suck it up, stop whining and go back to writing more episodes of gossip girl.
August 01, 2011 at 4:17 pm, Mr.fly said:
The democrats and a handful of republicans are tge problem…democrats destroy yhe government everytime their in office….rebublicans make the economy go…Obama is raising the taxes in an extreme form and for some reason the debt,economy and poverty gets worse….were turning into china…..
August 01, 2011 at 9:42 pm, Wiz1derkid said:
Mr. Obama is not raising taxes for the wealthiest 2% including those individuals and establishments that are sending American jobs to foreign countries in order to exploit cheaper labor pools(while destroying the economy). Republicans make the economy go? Since when? The previous president was a republican and he totally screwed the economy!!! And no we’re not turning into China brilliant one. China has the fastest growing economy on Earth and just a few days ago fielded a world class aircraft carrier(increasing military strength and the ability to project it around the world).
August 01, 2011 at 5:34 pm, Votocracy said:
Too bad these politicians can’t seem to get it right? Want to do something about it…this article gives some good insight on how to change politics and voting for the better:http://bit.ly/pJWViG
August 01, 2011 at 11:50 pm, Adam Benhassen said:
After all… nothing has changed, black is still black and red is still red.
August 02, 2011 at 1:17 am, john charles webb jr said:
If Barack Obama were NOT the President ….
then we would have been screwed to the wall .
The President acted courageously .
Just imagine if the White.House were occupied by a rubber-stamp Republican . . . . .
August 03, 2011 at 1:34 am, Anonymous said:
Every time they print money to cover outrageous, unaccountable spending- every dollar you have ever saved is becoming worthless. You thank them for not having to pay 9 bucks a gallon at the pump, your also however paying so corporate fleets do not either. So they can afford horrendous medical insurance coverage. They are just hiding the fact they have stolen the very value of your savings.
Both sides are destroying the dollar, which is driving away jobs- but one 2012 candidate can really reverse that, that will end all of these useless counterproductive wars. If you like half of American does not even know who this is, big government has won and soured you from participating. Be a patriot and youtube Ron Paul- see the big picture yourself instead of being distracted by the minutia.
August 03, 2011 at 9:22 pm, Judyzap said:
If you voted for Obama and you have kids….good, I hope you and yours gets what is coming to you.
Remember when your kids become of age, and they cannot go out into this world and make a living, don’t bitch at anyone but you kool aid drinkers…remember this, because it is going to come back to bite you in the butt.
Don’t look for handout, because there isn’t going to be any, gee for most you are going to have to go out and get a job…Oh, and by the way now that the word JOB is mentioned you should ask Obama about that one, I do believe he mentioned that along the way somewhere…hmmm let me think for a moment.
August 03, 2011 at 11:52 pm, Justzeroesandones said:
I am pretty dissapointed with most of the people who have commented on this so far. The intelligence that would normally be implied by your following death+taxes is seemongy absent. As far as my opinion goes, though I’m open minded to all of yours as well, is that this seems a little preemptive. If we, the common people, can see flaws in this resolutions design, theres no doubt in my mind that so can they. This is to say that, though I don’t know what, something is already planned.
August 06, 2011 at 6:43 pm, Goldrunca said:
Mr. Moore, you and others are truly morons…what makes you think Obama didn’t win what he wanted. The so-called REP leadership had everyone by the short ones and could have held out for some TRUE cuts and REFORM…instead they gave him a blank check, continued yearly budget increases without holding Congress accountable and put off everything ’til after the election…THIS WAS THE BIGGEST WIN FOR HIM AND WITH THE DEBT TO GDP AT 100%, THE WORST THING EVER FOR THIS COUNTRY…
GET YOUR FACTS AND STORY RIGHT IF YOU CONTINUE TO WRITE ARTICLES.
DAVE.