Inside the debt deal: Who won, who lost

[dominowinner]

By Major Garrett

National Journal

It started clean and ended messy.

When the debt-ceiling crisis began to capture the public's and Wall Street's bemused imagination in June, President Obama's Gallup approval rating was 50 percent, the highest

It's now at 40 percent, the lowest of his presidency, and a disturbing sign that dismay with America's "dysfunctional" government is taking a toll on more than Congress - mired since early spring with approval ratings in the mid-teens.

Obama won a long-term extension of the nation's $14.3 trillion debt ceiling. The deal extends borrowing authority by at least $2.1 trillion with no threat of congressional obstruction.

But Obama lost on his push for higher revenue. Tax increases - even for favorite targets like corporate jet subsidies and oil companies (heavy on symbolism but relatively light on revenue) - were left to a special committee. That means Obama traded spending cuts upfront without a dime of guaranteed new revenue - already a flashpoint on the left.

Analysis: Obama Hurt By Debt Debate

In the main, Obama did protect Social Security, Medicaid, children's health insurance, and veterans benefits and other entitlements from across-the-board cuts if the special committee fails to propose specific budget cuts to Congress. The committee's mandate is silent on the fate of these programs, but since many in Congress see the possibility — if not probability — that the 12-member committee bipartisan committee will deadlock, these programs are shielded from automatic cuts that failure would set in motion.

Also, Obama won a 50-50 split in all domestic cuts between non-defense spending and allocations for defense, homeland security, and the State Department. This amounts to $350 billion over 10 years and gives Obama an opportunity to press for more economical spending in the security sphere. Republicans say they will fight another day to ensure military readiness, training, and availability of necessary weapons systems.

But the president opened the door to Medicare cuts. Even though they are limited to providers, Obama has put Medicare cost savings on the table at just the moment congressional Democrats cherished a clean shot at Republicans for backing a 10-year plan to transform the health care program for the elderly from fee-for-service to a voucher system to finance insurance purchases on the open market.

The Cook Report: Congress Becomes a Laughingstock

On the tax side, Republicans are certain the rules will nullify higher taxes. Democrats are equally convinced the magnitude of future spending cuts through caps or across-the-board sequestration will prove so politically unpopular that Republicans will relent and raise taxes. That's what happened in 1990, when sequestration-ordered cuts led President George H.W. Bush to raise taxes in a budget deal reviled to this day by conservatives.

For Republicans, the victories are embedded in forcing Obama to agree to deficit-reduction with no explicit call for tax increases. They won votes in both chambers on a balanced budget amendment to the Constitution and built what they regard as acceptable protections of future defense spending. They also eliminated a Democratic bid to count as savings $1 trillion in spending on wars in Afghanistan and Iraq that was unlikely ever to be spent. Still, GOP unity was sorely tested and House Speaker John Boehner's leadership clout is less sturdy than it was.

Citing precedent, Obama asked Congress for a debt-ceiling increase with no strings attached. But the grudging deference that previous Congresses granted Obama's predecessors evaporated in a partisan-fueled demand by the new GOP House to turn a once-obligatory debt ceiling increase into a policy cudgel.

PICTURES: Ahead of Obama's 50th This Week, Other WH Milestone Celebrations

The president swiftly retreated, giving Republicans a victory no other Congress enjoyed. Even in 1985 when President Reagan signed the Gramm-Rudman-Hollings deficit-reduction law, he didn't do it under the threat of default. But House Republicans used default and the economic damage it would inflict as a political weapon -- one that forced Obama to link a debt ceiling increase to deficit reduction.

With that choice, Obama had to simplify his demands, and his one unquestioned victory in the debt deal was a boost in U.S. borrowing authority until 2013. In the hard-fought negotiations, which the White House said didn't wrap up until 7:30 p.m. Sunday, Obama also won relatively light first-year discretionary spending cuts.

news.yahoo.com

Of the $917 billion in discretionary cuts on the table now, only $7 billion occur in this fiscal year. Another $3 billion will be cut in next year's budget from 2010 spending levels. That's certainly a cut when compared to typical year-to-year spending increases that take inflation into account. But it also makes the deficit-reduction target in the out-years considerably larger than most House Republicans would prefer. In essence, Obama won a $900 billion debt ceiling increase for $10 billion in hard cuts over two years - with half coming from defense.

In sum, it's hard to see how Obama would have called this a victory back when he asked for a clean debt-ceiling increase. Similarly, House Republicans would have preferred more spending cuts up front and a stronger link to a balanced budget amendment or more iron-clad budget process reforms.

Read: Cuban Drilling May Threaten Florida Coast

It's a deal that neither side particularly likes, that has taken a toll on everyone's popularity and cast a pall over the U.S. economy.

Clearly, it's not enough to satisfy Obama or Republicans.

Judging from the sagging poll numbers for all the combatants, though, it is the public that will probably have this one-word reaction.

Enough.

Correction: An earlier version of this story misstated the mandate of the special committee on deficit reduction. The committee's mandate is silent on possible cuts to entitlement programs such as Social Security, Medicaid, unemployment insurance, veterans benefits, and others. But these programs are specifically exempted from across-the-board spending cuts if the committee fails to recommend a deficit reduction package to Congress.

[krome2ez]

Obama is the Big Winner in the Debt-Ceiling Debate

Posted by Francis Cianfrocca (Profile)

Monday, August 1st at 4:20PM EDT

This isn’t Monday-morning quarterbacking. For one thing, it’s not football season yet. For another, the game wasn’t played on Sunday afternoon. It’s been going on for weeks, with twists and turns more reminiscent of comic opera than football.

Even so, today’s media game has been all about deciding who got the better deal. Many of the partisans think they came up short, and are looking to blame their guys. In the media (which sees any legislation as an achievement, no matter how hollow, cynical, or ultimately ineffectual), many are scoring this as a win for both sides. (That’s to say, all of the parties will be able to go back to their respective bases with something to brag about.)

Around the middle of last week, I lost track of the specific content of the deals, which was in constant flux. And the media lost track of it too! The only reporting, it seemed, was about who was up (Boehner, Reid, Obama) and who was down at any point in time. That tells you all you need to know about how cynical and empty this whole process has been.

I’ve given some of my views on the deal that was struck in Coffee & Markets. Suffice to say that the deal is substance-lite. Conservatives will find (or have found) that tax increases and defense cuts are indeed on the table as the fiscal debate continues. Liberals are dismayed that the sacred status of Social Security, Medicare, and Medicaid was not enshrined in first-order language. They fear that cuts may be made to these programs. (Of course, they need not worry, but they will.)

The leadership in Congress, on both sides and in both houses, comes out of this in varying shades of black-and-blue. But ALL of them, even Pelosi, are black-and-blue. This episode won’t go down in history as Congress’s finest hour.

But while the economic and policy objectives of the fight may be clear enough to partisans outside of Congress (and might even be somewhat meaningful to ordinary people), this ultimately was a fight about politics.

And in the political analysis, there is only one player who came out of this with everything he wanted: Barack Obama.

Obama wasn’t trying to advance a policy objective. Not even once did he let the articulation of such a thing pass his lips. Rather he had two specific objectives that he had to get at all costs:

1) To get Republicans to propose specific spending cuts that Democrats can use against them in the coming elections, while not making any such proposals himself; and

2) To silence the fiscal debate until after his election in 2012.

The president won on both counts. Everything else that was at stake in the negotiation was a nice-to-have for him, not a need-to-have.

No one else got their must-have objectives. The Republicans have to face the prospect of tax increases combined with spending cuts that will be phony at best. And the Democrats will have to keep justifying entitlement programs that we can no longer afford.

The downside for conservatives is clear: We’ve lost our last chance for a meaningful discussion on fiscal reform, until there’s another financial or economic crisis.

But liberals have lost even more. It turns out that Obama was only willing to fight hard for his own political objectives. If liberals choose to be honest with themselves, they’ll see that both they and the media made the mistake of conflating their policy interests with Obama’s personal interests.

Obama himself never made that mistake for a second.

http://www.redstate.com/blackhedd/2011/08/01/obama-is-the-big-winner-in-the-debt-ceiling-debate/

[Mongo]

TO LITTLE ......TOO LATE.....................The can just got kicked over a cliff

[gidma]

Oh ya right Krome....Obama won NOT....that's why his pole ratings have gone down down down....how does that make him the big winner? The American people are the losers because the Republican's we're able to pass CUT CAP and BALANCE....but wait until 2012 when we get more Tea Party candidates in Washington....they will get our country's economy back where it needs to be. MORE JOBS, GET RID OF BIG GOVERNMENT AND STOP THE SPENDING.

[bsme123]

This whole debt ceiling debate and the articles that follow, Who won, Who lost etc......is a farce. Seriously? How do you solve a problem when no-one is even willing to address the REAL problem? The politicians surely are not going to address it, because of their greed, and most people lack any real knowledge or understanding of the problem. Why does everyone ignore the 1000lb elephant in the middle of the room? "The Federal Reserve" private central banking. How do you solve a debt problem when you have zero control over the money supply? You don't! The Wealthy Elite do not want you addressing or solving the problem either. The government and the people were bought and paid for a long, long time ago, and they do not intend on politely giving it back.

[PartyTime]

The American people lost, as they always do.

And did you notice how they keep hyping everything about how this is because the American people say this is what they wanted? LOL They will do and say anything to keep the illusion alive!

Now what is interesting is all this hype about the teaparty saying how bad they are for government and how they hurting everything. They even sicked the mainstream media on this to try and brainwash the sheeple. This tells me they are actually worried they are losing their control. Whenever these criminals start attacking someone like this you rest assure the exact opposite is true. So whatever influence the teaparty is having on them I say crank up the heat and keep at it! They are onbviously making some kind of headway that is interrupting their little private click they have controlled forever.

For the American people to win it would take them to come out and tell the people the truth! It would take a full confession of the fraud they have been committing against the people for the last 78 years!

It would require saying, People, we must now come clean and inform you of the truth. We have been operating under chapter 11 bankruptcy now for 78 years. You the people are the true creditors of this Nation and we have not been properly applying your credit to offset and cancel the debt. The truth is there is no reason a debt even exists today and had it not been for our own internal greed for power, control, and wealth, your credit would have never been stolen and embezzled by us. But we are now at a time where we let this debt grow so much that it can longer be maintained and serviced. Because you are the true creditors with virtually unlimited credit, we need you to each sign a piece of paper by writing MONEY ORDER at the top, then making it out payable to United States Treasury in the amount of $2,166,667.00 and then write credit the same to your fictional all caps strawman name followed by your SS number without the dashes. Then sign it and write under signature Authorized Signature. Then mail it to the IRS so they can properly apply that amount towards the debt owed which will offset and cancel that amount of the debt. With 300 million Americans making one of these out in that amount it would generate the $650 Trillion needed to discharge the total debt owed today.

And from this day forward, every bill you get take that payment VOUCHER attached to that bill and use that payment voucher as your CHECK. Just sign that and send it in so that amount owed can be offset and discharged from your credit. This is what we have suppose to have been doing all along since the corporate US went into chapter 11 bankruptcy in 1933. You do not need to be using those federal reserve notes and you were never authorized to use them in the first place. There is no money and never has been since we went into bankruptcy in 1933. The only we ever needed was just your signature which is the source of your credit. Without ever having your signature on anything we could have never generated any funds from your credit. All these bank loans you received since 1933 were never actual loans made by the bank to you. Banks are not even authorized to loan their own credit out nor their depositers credit. It was always your credit they loaned back to you. That note or credit card application you signed was always the source of funds created that was loaned to you. Your signature on those notes and applications were needed just so the banks can have your credit that they needed to have in order to deposit into an account generating that amount from your credit which the bank then loaned back to you. You have been frauded all along and now it is time for us to come clean and repent for all these sins we committed against you. We are deeply sorry for that. But as of right now and once you sign off on everything by supplying us with your signature all debts will be properly discharged and you are not to use any more federal reserve notes for anything. Those were only intended to be used internally between the federal reserve, federal reserve banks, all national banks and the corporate governments.

Today is the day of your Jubilee.

Now when they come clean annoucing something like this, that when the American people will actually benefit and not until then.

[tcat1]

This whole debt ceiling debate and the articles that follow, Who won, Who lost etc......is a farce. Seriously? How do you solve a problem when no-one is even willing to address the REAL problem? The politicians surely are not going to address it, because of their greed, and most people lack any real knowledge or understanding of the problem. Why does everyone ignore the 1000lb elephant in the middle of the room? "The Federal Reserve" private central banking. How do you solve a debt problem when you have zero control over the money supply? You don't! The Wealthy Elite do not want you addressing or solving the problem either. The government and the people were bought and paid for a long, long time ago, and they do not intend on politely giving it back.

I absolutely agree. The only way to rid the problems is break the path of corruption. That comes with total exposure of the real culprits...the Federal Reserve, a privately owned operation, must be destroyed.

[krome2ez]

Oh ya right Krome....Obama won NOT....that's why his pole ratings have gone down down down....how does that make him the big winner? The American people are the losers because the Republican's we're able to pass CUT CAP and BALANCE....but wait until 2012 when we get more Tea Party candidates in Washington....they will get our country's economy back where it needs to be. MORE JOBS, GET RID OF BIG GOVERNMENT AND STOP THE SPENDING.

Did you read the article?

Yes, the people are the losers.

That's what the article said.

Obama got what he wanted and we didn't.

You point that out in your point that Obama's not the winner.

That was the point of the article. Duh!

Obama got 2 trillion dollars to spend and doesn't need to go through this again before the next election.

Please read past the title.

BTW I didn't write it, just posted it.