After four years of trillion-dollar deficits, the red ink is receding in Washington, easing pressure on policymakers and shattering hopes for a summertime budget deal.Wait, what? Increasing taxes on the rich is actually raising revenue? I thought it was going to kill jobs! You mean there's no magic fairy dust to punish the socialist nemesis for raising taxes on our venerable "job creators?" And what is all this about the Big Black Spender actually paying down the national debt? Someone, please, stop the presses!
Federal tax revenue is up and spending is down thanks to an improving economy, January tax hikes and the budget cuts known as the sequester. As a result, the U.S. Treasury has slowed the pace of borrowing and actually was able to repay a tiny fraction of the $16.8 trillion national debt in the first quarter of this year.
But the real problem Paul Ryan is facing from the results of President Obama's success in pulling the economy back from the gutter that Ryan's party put it in is worse: Baby Ryan just lost his... erm... "leverage" on budget negotiations - leverage he was hoping to use to force an end to the social safety net.
“The debt limit is the backstop,” Ryan said before taking the stage at a Washington summit on the debt organized by the Peter G. Peterson Foundation. “I’d like to go through regular order and get something done sooner rather than later. But we need to get a down payment on the debt; we need entitlement reform; we’re very serious about tax reform because we think that’s critical to economic growth and job creation. Those are the things we want to talk about.”Well, that was blatant. Paul Ryan wants to play politics with the debt limit to try to force the president's hands. His issue? The success of President's economic policies have at least delayed that manufactured crisis time to October. With the treasury needing to borrow less, the debt limit will not be reached this month, as was previously expected. So Paul Ryan is "reluctantly" waiting till then. Well, that won't help. Mr. Ryan, let me remind you of something that happened the last time you tried this.
Guess what? The President's warning worked. The Republicans quickly backed off and allowed for a 4-month "suspension" of the nation's debt limit. The president was serious in December, and he's serious now. He is not playing that game with you, lil' Paul.
The president and the Democrats are ready to talk about a serious down payment on the debt. They are ready to come to the table with adjustments to entitlement programs the president has already put on the table and in his budget. But the president will not let you turn this into a circus when his policies are beginning to bear fruit despite Republican obstructionism.
And Republicans will fold again. Like a cheap wallet in expensive suits. In fact, the folding has already begun, even while the Republican leadership tried to look tough.
Take the measure that is set to come before the House on Thursday. It started out as a garden-variety prioritization bill that would have directed Treasury Department officials to pay certain bills first if they hit the debt limit, are forced to stop borrowing and have to make due with incoming tax receipts.Come to mama. Not that these pathetic attempts to avoid responsibility will survive President Obama's veto pen, but let's assume for a moment it did. Then what? Republicans are going to be responsible for passing a bill that will allow borrowing for payments on the national debt and to the Social Security trust fund, but not, let's say defense? Or will they add the Pentagon to the exemption list? If they do, it will only have the effect of extending the debt limit even more. If they don't, their defense contractor buddies will skin them alive. What about Medicaid payments? School lunches? Student aid (anybody remember #dontdoublemyrate?)? Air traffic control? Homeland security? Farm subsidies? Foreign aid at a time when when Israel is engaged in combat action? And do all this a mere 3 months before an election year? Ahahahaha. Don't make me laugh.
But House Ways and Means Committee Chairman Dave Camp (R-Mich.) rewrote the bill to carve out exemptions to the debt limit, so the Treasury Department could continue borrowing to make interest payments to creditors and to the Social Security trust fund. Analysts at the Bipartisan Policy Center say the measure, if adopted, would have the effect of extending the Treasury Department’s borrowing authority for at least a month.
This is kind of like the Republican rhetoric on cutting spending. They can't stop talking about cutting spending, yet they can't tell you just what spending they would cut. Now they want to tell you that they want to be responsible not to make the government default and yet hold down spending. But pretty soon, there will have to be so many "exemptions" to the debt limit that it won't mean squat to have a debt limit. Maybe that's their plan to save face and give the president what he wants?
There is no hostage here. The president's policies are working, and the president is brilliantly using his policy success to tip over the Republican house of cards on economic and fiscal policy. Republicans love to push the country into crises mode for their political pleasure, but this time, President Obama has succeeded in averting this crisis by proving that he and his administration, not the Republicans, are the people who are actually cutting the debt. The Republicans already lacked leverage based on the debt ceiling, and by October, they will have nothing.
Please proceed, Mr. Ryan.