Why The Debt Ceiling May Have Already Sealed Barack Obama’s Fate

By Yashwanth Manjunath

Possible one-term President Barack Obama will give a speech tonight about the ongoing debt ceiling debate, where he will presumably articulate why Harry Reid’s plan in the Senate is better for the country’s future than John Boehner’s plan in the House. Unfortunately for the country, both plans are radically destructive and guaranteed to send the economy back into a tailspin just in time for the 2012 elections.

Let’s start with Boehner’s disastrous plan. It is a slightly modified version of the “Cut, Cap, and Balance” plan that passed the House earlier this month. Boehner’s plan would cut discretionary spending by $1.2 trillion and cap it to handcuff future attempts at counter-cyclical fiscal policy in the event of another recession. Talk about economic sabotage.

The plan would also push for a Balanced Budget Amendment to the Constitution which would handcuff future Congresses from ever using counter-cyclical fiscal policy to respond to sluggish economic conditions. It would actually make sound macroeconomic policy unconstitutional. Thankfully the “balance” part of Boehner’s plan is such an asinine idea that it has no chance of passing.

Reid’s plan would cut spending by $2.7 trillion dollars over the next ten years without doing anything to increase our historically low tax revenues. The plan gives Republicans everything they asked for at the start of the debt ceiling negotiating process, and an extra $300 billion in cuts. Reid’s plan would break the back of the fragile and sputtering economic recovery and send the country right back into recession. By giving the Republicans more than they initially asked for, Reid and the Democrats would be doing the Republicans’ job for them, preventing any hope of an economic recovery and ensuring Barack Obama will be a one-term president.

Regardless of which of these two proposals becomes law, the spectrum of the debate has already shifted so far to the right that Barack Obama is screwed either way. But more importantly, the country is screwed either way. Obama has no one to blame but himself because he set a clear precedent during both the Bush tax cuts debate and the government shutdown debate, and is perceived by too many as a weak, ineffectual leader who will seek compromise at all costs. The Republicans have already won this battle; now all we can do is brace ourselves for the disastrous consequences of their victory.

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