Brutal Honesty About The Debt Limit Deal

Brutal Honesty About The Debt Limit Deal

There are people out there hammering the Tea Party and saying it failed. Well, if the definition of “failure” for the Tea Party turns out to be getting 2.4 trillion in cuts when Obama wanted none, we need more “failure.” I mean, we REALLY need more failure because the deal isn’t enough to change the country’s long-term trajectory.

This is where some conservatives have parted company. Some people think it’s the best deal we could get. Others think conservatives should be opposed to this bill because it doesn’t go far enough.

The problem is that while the House passed a bill that could have been a long term difference maker — Cut, Cap, and Balance — there was no chance it could get through the Senate.

Some people assume that if the GOP held out long enough, they would have gotten Cut, Cap, and Balance through.

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This is simply not so.

The Democrats are adamantly opposed to Cut, Cap, and Balance and the idea that the GOP’s leverage would increase if the country defaulted or the government shut down is simply incorrect. Conservatives don’t get particularly upset by the idea of the government shutting down, but this would be REAL shutdown and independent voters would absolutely hate it. If Republicans were simply refusing to cut a deal for months on anything short of Cut, Cap, and Balance, the GOP would be correctly blamed for the shutdown and it would lead to a bloodbath in 2012. Since Republicans in Congress get that, they would have caved and caved badly when public opinion started to really turn.

Still, many people are probably saying something like, “This deal won’t safeguard our AAA credit rating! It also doesn’t cut much this year and won’t keep us from being in the exact same position in 2013!”

All of that is very true, but there’s one little problem: It’s called the Democratic Party. Democrats control the White House, they control the Senate, and if you’ll remember, they started out this fight demanding no cuts at all. Then, they moved on from there to demanding tax increases.

Let me tell you something extremely discouraging, but also very true. We will not be able to stop this country from going bankrupt unless there is a significant number of Democrats who decide to put the country first and decide to help us. That’s because we have a system with a lot of checks and balances built into it and, yes, if the Democratic Party decides to fight us all the way as we try to stop the country from turning into Greece, we will fail. As Abe Lincoln said, “A house divided against itself cannot stand.” What will it take to get some Democrats to start behaving responsibly? Probably a genuine debt driven crisis — like perhaps the loss of our AAA credit rating across the board. It would be nice to head that sort of thing off at the pass, but there are few indications that it’s possible.

Given the Democratic opposition to the entitlement cuts that are needed to make a real difference over the long haul, I’m really dubious that McConnell and Boehner could have gotten much more in cuts. In fact, I expected the final deal to probably be in the 1.5-to-2 trillion range; so it looks like it’s going to be a litle bigger than that.

Since all the details aren’t live yet and liberals are going to absolutely hate this bill, not just because of all the cuts, but because they’ll view it as a Republican “victory,” I’m still not 100% sure it’ll pass. It’ll probably do fine in the Senate, but there’s an outside chance that if some Republicans in the House hold out for Cut, Cap, and Balance and Democrats vote against it en masse, it’ll fail. We’re also still hearing conflicting things about the chances that tax increases could be recommended. Republicans are saying it’s structured in a way that makes it EXTREMELY unlikely while Democrats are saying, “not so.” We’ll have to see. Assuming that tax hikes aren’t in the cards, we probably couldn’t get anything much better than this bill through the Senate and across Obama’s desk.

You can read the text of the bill here.

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