The Debt Ceiling Debate and Compromise: Who Won? [65]

THE DEBT CEILING
THE DEBT CEILING | Source

The Democrats Won!

THERE probably isn't a pundit in the U.S. who would agree with my assertion that President Obama and the Democrats won this debate. Why can I say this? I believe these pundits, as with most Americans, are often short-sighted; they only see what is right in front of them and have no sense of history or future. (I include myself in this general condemnation but hope I am less short-sighted than the average bear.) There is no doubt that if you look through a microscope, the Conservatives won this controversy big time. However, if you look through a telescope and pull back a bit, I think you will find the President, and Democrats did much better than whay you are hearing in the news at the moment.

As I said, if you look at "right now", the Republicans win, but if you consider where things were in January and what they will be September, then you might come to a different conclusion; so let's look.

So, what are the pieces to this puzzle? First, you need to remember that this year, there were three chances to make changes to the budget; 1) when the 2011 budget was passed in April, 2) when the debt ceiling needed to be raised in May 2011, and 3) when the 2012 budget will be debated starting Aug 3, 2011; the existence of the last opportunity plays directly in my analysis and conclusion that the Democrats won. With the understanding, we need to look where this all started and what the President and Democrats wanted ... a clean debt ceiling increase.

That was in January 2011, and it was not to be; the Conservatives made the strategic political decision to hold the country hostage by tying an increase in the debt ceiling, which pays for bills already incurred, to future budget cuts ostensibly made to lower the deficit and debt. (I would argue the things they were trying to cut, in the current economy, would have led to higher debt and deficit because it would have caused another recession; see President Roosevelt's austerity measures in the mid-1930s for an example.) As many Democrats have correctly pointed out, this crisis, which almost brought America to its knees and, which has now caused permanent economic damage, was completely fabricated by the Conservatives; it simply wasn't necessary and has probably done more harm than any good the Conservatives thought it might bring. The reason this crisis was no more than Conservative drama is the fact there is still one more round of budget negotiations planned, the 2012 budget negotiationss; negotiation that would have occured even if they were part of the mandated commissions that are Part 2 of the debt ceiling compromise.

One scenario that could, and should, have played out is 1) in April 2011, the Conservatives wrung substantial budget concessions from the Democrats in order to pass the 2011 budget; 2) beginning in May 2011, Conservatives could have raised a stink about needing still more budget cuts but not tie it to the debt ceiling increase, and 3) beginning in June 2011, Conservatives could have made the same full-court press for their additional budget cuts during the process designed for such a debate, the 2012 budget negotiations.

Instead of this normal process, the Conservatives saw a chance to essentially extort the budget cuts they felt were needed out of the Democrats by threatening to destroy America if they don't get their way (no sense in sugar-coating it). What did they get for their troubles? Probably not much more than they would have if they had waited to make their case during the 2012 budget talks.

Interesting statement that, don't you think? Let's see what the Conservatives got for trouble; about $900 billion in budget cuts that take effect in a couple of years and a promise to negotiate more over the next several months. Since the Democrats long ago conceded that more substantial cuts were needed above and beyond those included in the 2011 budget compromise, getting the same $900 billion in cuts during the 2012 budget talks was probably a foregone conclusion. So I ask you, dear readers, what was the point? Why did the Conservatives drag America through this?

This is why I think the Democrats won; they got the debt ceiling raised, which should have happened after a lot of alpha male posturing, and gave up cuts they were prepared to do anyway. At the same time, the Democrats preserved the right to take up the fight for what they, and I, believe are necessary, appropriately applied tax increases to increase revenues. So, where is the lose?


More by this Author


Comments 24 comments

HSchneider 5 years ago from Parsippany, New Jersey

Well stated My Esoteric. I was not looking at the result that way. I hope the American people see the Tea Partiers and the Republicans for the extortionists they are. I also hope that President Obama holds firm on his stance on the Bush Tax Cuts at the end of 2012. Excellent Hub.


American View profile image

American View 5 years ago from Plano, Texas

Well I am sorry to say the there were no winners in this deal, just on huge loser, the American people. The congress thinks $900 billion in tax cuts that do not start till 2013 and maybe a possible deal in November is going to do anything. Face it, by the time the tax cuts kick in we will have added another 3 to 4 trillion dollars to the national debt.Not to mention it does not matter a deal was reached, our AAA rating is going down. So Congress accomplished nothing except to find new names to call each other and Obama gets his name in the Guiness book of World Records as the first person to say approach more timed in a week than all of the US citizens combined do in one year.Let's put it plain Obama, your approach does not work. History shows that to be true.

Henry Morgenthau, Jr. was the U.S. Secretary of the Treasury during the administration of Franklin D. Roosevelt

"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. … I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot."

To reduce the deficit he argued for increased taxes, particularly on the wealthy.

"We have never begun to tax the people in this country the way they should be..... I don't pay what I should. People in my class don't. People who have it should pay."

Does this sound extremely familiar to you? It does to me. This was the fiscal policy of FDR trying to get America out of the depression. It failed then and Obama could learn from history for it is not working now either.


My Esoteric profile image

My Esoteric 5 years ago from Keystone Heights, FL Author

Thanks HSchneider, I appreciate that. I was going to bring the bit about the Bush tax cuts up, but, decided to keep the hub short(er) for a change.

Thank you for your comments as well American View. Let me work from bottom up on what you had to say. I don't know the specifics yet but in general FDR's "stimulus", sort of Obama on steriods, did work; it pulled America out of the depression by the mid-1930s. However, FDR was, believe it or not, a fiscal conservative as were the opposition party. Consequently, once American started to sluggishly grow, he instituded a major austerity program slashing the budget left and right. The country immediately and predictably, because the timing was all wrong, sunk back into a recession and never recovered until WW II ... check it out. That also sounds like a repeat of 2008 until today, doesn't it, except the Obama, unlike FDR, is not joining the Conservatives in forcing the country back into recession.

Back to the top. I absolutely agree with you that America was the loser in all of this. I had started the second section of this hub to write about just that but decided not to in order to, as I mentioned to HSchneider, to keep the hub short.


American View profile image

American View 5 years ago from Plano, Texas

Actually, I did, i wrote a major paper on the actual ecomomic event of the time. The economy did pick up some during the war, but the economy did not fully recover under FDR. I know the left always credits FDR but in reality, the economy did not fully recover till under the Truman administration, and he was only partially responsible. Remember, Henry Morgenthau said publicaly the FDR policies were a failure, and he was not alone.

After many years of Democratic majorities in Congress and two Democratic presidents, voter fatigue with the Democrats delivered a new Republican majority in the 1946 midterm elections, with the Republicans picking up 55 seats in the House of Representatives and several seats in the Senate. Although Truman cooperated closely with the Republican leaders on foreign policy, he fought them bitterly on domestic issues. He failed to prevent tax cuts or the removal of price controls. The power of the labor unions was significantly curtailed by the Taft–Hartley Act, which was enacted by overriding Truman's veto. Shortly after the enactment of these actions forn Congress, the economy took its first turn toward prosperity. This was the begining of a 20 year run of economic recovery and it was also reflected in the DJI. It would take 25 years for the Dow to reach the same level as it was in 1929.

As he readied for the 1948 election, Truman made clear his identity as a Democrat in the New Deal tradition, advocating national health insurance, the repeal of the anti-union Taft-Hartley Act, and an aggressive civil rights program. Taken together, it all constituted a broad legislative agenda that came to be called the "Fair Deal."

Truman's proposals were not well received by Congress, even after Democratic gains in the 1948 election. Only one of the major Fair Deal bills, the Housing Act of 1949, was ever enacted.


PETER LUMETTA profile image

PETER LUMETTA 5 years ago from KENAI, ALAKSA

I don't really see the Dems as "the winners" but I do agree with American Views analysis and conclusion that we the people lost. And will continue to lose even more since the Dems are spineless.

Peter


My Esoteric profile image

My Esoteric 5 years ago from Keystone Heights, FL Author

American View, I appreciate the information and am very happy to see another political writer presenting facts. Now, of course, I need to dig deeper as what you imply about the period 1929 - 1941 doesn't quite mesh with what I understand at the moment; I haven't got there in my depression/recession saga hub. I haven't done a lot of detailed research for 1945 - 1960 yet.

Thanks for the comment Peter- I thought about titling ths hub "... Won: Democrats-1, Conservatives-0, and AMERICANS-0". While I often accuse the Democrats of being "spineless" myself, it is normally in conjunction with backing down to the Conservatives.


PETER LUMETTA profile image

PETER LUMETTA 5 years ago from KENAI, ALAKSA

Which is exactley what they did. The republicans got everything they wanted and Obama got to raise the debt ceiling. Everything the dems wanted they didn't get. They are supposed to be the party in Power, they sure fooled me.

Peter


American Romance profile image

American Romance 5 years ago from America

Tea Party members are extortionists? Biden called them terrosists! I thought after Gifford we were supposed to have a nicer softer tone? I think that order came straight from the top boys! I thought when the black man spoke you boys jumped to attention and said yessir! funny, when liberals act as a true mob and terrosists nothing is said, Wisconsin unions are the point!

I guess a mixture of dems,pubs, and independents that make up the Tea Party is enough for you to call Americans trying to save us filthy names........

My question to all of you is what is wrong with cap cut and balance the budget? Is there not a liberal anywhere that understands we are fixing to be Greece! Anyone?

You guys truly believe we won something? 900 billion in cuts over the next 19 years? We borrow 4 billion a DAY! I suggest you smart fellows get on the right side of the fence! Republicans won NOTHING! They should have held out and forced this country to get serious!


CMerritt profile image

CMerritt 5 years ago from Pendleton, Indiana

Hi My Esoteric, I see this as we all lose. Our credit rating will probably drop which will effect all Americans. There is NO admendment to make sure we balance our budget, which we obviously need. If anything Obama is the winner...he gets his money, and this debate goes away until AFTER the election....he won't have to face it anymore...at least that is the way I see it.


My Esoteric profile image

My Esoteric 5 years ago from Keystone Heights, FL Author

THink about it Peter, all the Dems initially wanted was a clean debt ceiling increase and then to fight the budget cuts out in the 2012 budget negotiations. When the Conservatives pressed, the Dems then wanted to make sure they protected unreasonable cuts to the entitlement programs. The Dems were perfectly willing to make large, smart cuts to the budget ... at the appropriate time. After all of the rhetoric dies down, what do we have left but an almost clean debt ceiling increase that is tainted with a $900 billion budget cut the Dems were willing to do anyway, just a few months from now.

The compromise committee that is now in charge of all the stuff everybody has been yelling about is going to have to do something or else those across-the-board draconian cuts that BOTH sides hate with a passion will alledgedly take place. Once more we will see brinksmanship but with a major difference, the country's future will not be hanging in the balance. The Dems successfully moved the debate to where it ought to be in my view without giving up anything they weren't already willing to give up, don't you see.


My Esoteric profile image

My Esoteric 5 years ago from Keystone Heights, FL Author

Hi CMerritt. You won't find me disagreeing with you one bit about when you sum it up, we all lost, the total loss clearly outweighs any esoteric win for the Dems; we lost a lot, some of it permanently. However, as you might guess, I come down on the other side on the BBA but, I will save my arguement to that for another hub.


American Romance profile image

American Romance 5 years ago from America

.........Dems wanted to make sure they protected entitlement..........that sentence makes me ill! Ever see the ribs showing on anyone in this country? I see food stamps buying steak while the husband waits to pay for cigs and booze! 50 million on entitlement, and the Dems say lets add more burden to the millionairs and billionairs, ......what they meant is everyone except those 50 million!..........last thought instead of taxing the rich why not tax the poor? if 50 million just paid 3 dollars a year in tax money that would be 150 million dollars! hmmmmmmmmmm how much do you get if you tax 2500 people another 3%? I mean according to the IRS they all ready pay 90% of all the taxes?


Jo_Goldsmith11 profile image

Jo_Goldsmith11 5 years ago

I see it as this. The tea party folks were ready to drive All Americans off the cliff. My concern is still the same as it was last week, last month. People like Warren Buffet proclaiming that there is a new era of a "new social class", His! Think about this for a moment. If small bussiness, high school students wanting to go to college, the baby boomers who are retiring? Where does it leave them in all this mess of political posturing and throwing us overboard with the craziness of the self centered and dangerous tea party freshman in Washington?


My Esoteric profile image

My Esoteric 5 years ago from Keystone Heights, FL Author

Thanks for the comments American Romance. Terrorists? No, Extortionists, Yes given what the Tea Party chose to fall on their sword over ... it was the full faith and credit of America and not the budget. I seriously doubt there are but a few token Democrats, independents, or, for that matter, Republicans in the Tea Party; this simple reason is they don't hold to your principals.

As I have mentioned in other hubs, if you listen to the Tea Party platform of extremely limited federal, but a powerful State government tied with extraordinary laissez-faire economic policy with truncated federal judicial power, you are listening to the same rhetoric of anti-Federalists who did not want America to exist as it does today. If the Tea Party had its druthers, based on its platform, the Federal government would return to its size (small) and authority (none) that it had under the Continental Congress.

I am in the middle of writing a hub on the CC&B idea of the Conservatives, which I am sure will be resurrected, but, as you can guess, my position is that it is very damaging to effective governance, especially the BBA. You have to wonder why, if the BBA is such a good idea, that the creators of the Constitution didn't build any semblance of such a mechanism into the document in the first place. And, as the world has shrunk and become so interconnected with events happening at lightening speed, the BBA morphs from a bad idea into a potential national disaster by hogtying Congress in such a way as to prevent them from reacting to events as they happen.


My Esoteric profile image

My Esoteric 5 years ago from Keystone Heights, FL Author

You ask great questions Jo, thank you. As CMerritt and others have said, Americans have lost because of the Tea Party bringing America to the brink of disaster for purely ideological reasons. They are the George Mason's of the modern day; he preferred not have America as we know it today, rather than compromise his principals. As a consequence, he almost succeeded in stopping the ratification of the U.S. Constitution.


My Esoteric profile image

My Esoteric 5 years ago from Keystone Heights, FL Author

First I need to say how happy I am for all of the great comments this hub generated.

Yes, American Romance, I have seen people in America with ribs showing; believe it or not, there is true, honest-to-goodness poverty in this country. And, if you use your booze and steak anectotes make for good press but unfortunately has little resemblence to the truth of the matter.

From your comments about 50 million on "entitlements" I gather you oppose people receiving Social Security and Medicare because that is to whom 80 or so percent of the "entitlement" money goes.


American Romance profile image

American Romance 5 years ago from America

My Esoteric,

I agree that the Tea Party wants government down sized and power returned to the states! Heck I want that also! We don't need a federal education,FCC,OSHA, and on and on, .....along with Obamas new consumer agency!

The larger govt gets the faster it fails the people! I am so frustrated that so many of you fail to recognise this? When you watch Greece rioting in the streets do any of you understand why? The Tea Party believes in everything OPPOSITE of those who took Greece to these horrible depths! You want social justice? I do too! Start taxing the poor! The rich pay enough! besides this is a democracy, meaning every man should pay equally not based on his work ethic, drive and ambition, People are different folks, there is no such thing as social justice, there are those who work hard and made something and those who refuse to take advantage of free education, and neglect their personal lives untill its too late! ..........I am not responsible for those folks! I paid my school taxes, built churches for their moral planning, and basicaly set the tone for everyone in this country to enjoy a good life, ......again I am no longer responsible for them!

Esoteric, Please come to my part of the country, In less than 30 minutes after you arrive I will prove my point on the abuse of welfare!..........you say you have seen starving people in this country? Sir I must call you a liar on that one! We have more wasted food in trash cans than most countries eat in a day! Too many soft hearted give it all away (out of my pocket libs) would feed them! Churches everywhere will give free food, and no govt agency ever tells the lazy NO!


American View profile image

American View 5 years ago from Plano, Texas

Just curious, why are so many of you against fiscal responsibility? We can cut the budget and balaceit without touching SS, medicare or medicaid. And there is an easy way to more than double our revenues without raising taxes. So why be close minded? Open up, do not discount ideas just because someone else had it. Check out my hub Hey Washington, lets get serious and see it is not that hard to do


John Hewitt jr profile image

John Hewitt jr 5 years ago

What a great hub.

Just to start of with, i am currently a permanent resident in this country. I have been living here now for 7 years. Currently i am not eligible to vote.

With the election of president Obama it so much reminded me of when Tony Blair got elected back in 1997 in England. The man promised so much changed back then, But did not deliver on his promises.

I love very much the way of life over here in America and would not change that lifestyle for anything.

Can America get out of the mess it is in right now? I certainly believe so and would love to see the day when that happens.

Sorry if my ideas sound whack.


My Esoteric profile image

My Esoteric 5 years ago from Keystone Heights, FL Author

I am glad you enjoyed my hub, John, thanks for visiting. I am happy to hear you are enjoying America and our lifestyle.

I haven't mentioned in a hub or comment before, but, when I view a President of the United States in such terms as you bring up, I always have to remind myself that, in America, our Constitution organizes government such that it is very hard for any promises made during a campaign to be fulfilled. This is particularly true when you have one party in Congress taking a unique course in U.S. history, a publically vowed promise of their own that their NUMBER ONE priority is to make sure the President doesn't fulfill even one of his or hers promises. We have that now, of course, with the current set of Tea Party and ultra-Conservatives that control what used to be a Republican party but more properly should be called the Conservative Party; which, appears to be a close cousin in political philosophy of the defunct Know-Nothing Party of the mid to late 1800s and is clearly the reformation of the Anti-federalist party of the early 1800s.

I am hoping that once American's understand that the practices of the Tea Party are distructive, not constructive, that they will go back to voting for the compromise-friendly Conservatives, regular Republican, and right-leaning Democrats that they did in the past so that our government can get back to our unique brand of dysfunctional, yet pragmatic governance.


My Esoteric profile image

My Esoteric 5 years ago from Keystone Heights, FL Author

Actually, American View, I am and always have been fiscally conservative. This is not saying I am a fiscal Conservative as is now represented by many in the Tea Party, for example. I am more of the Collin Powell mode. In fact, until the religious right took over the Republican party, I have always been a Republican; my first Democratic presidential vote was for Bill Clinton.

In a phrase, "Being fiscally conservative is good for the country, being a fiscal Conservative is not." Historically, you cannot find a period, and there have been several, the most recent being 2001 - 2008, where fiscal Conservatives have been in control and the economy didn't get into a BAD recession or depression as a result. I challenge you to find a period where we followed a fiscally conservative, or, further to the left, progressive economic policy that resulted in anything worse than a minor recession. My research goes up to 1893 at this point and so far what I just related is what I found.

I will definitly have to check out your hub, for sure.


My Esoteric profile image

My Esoteric 5 years ago from Keystone Heights, FL Author

American Romance, there is certainly nothing romantic in your social and political views, that is for sure. I am not sure what you mean, "there is no social justice". I look at societies like Somalia, Cambodia during Pol Pot, and Russia during Stalin and that is what I think of when you say "no social justice"; in other words, pretty sick societies. When you said "ribs showing" and "starving people" if you meant it in terms of what is going on in Somalia today, then, of course, you are certainly right. However, I took the term in a more common meaning that there are very hungry people in America and that, sir, is certainly true; just walk around parts of the Appalechia's or in the ghettos of major cities.

Tax the poor, what an interesting idea and certainly in line with your believe there should be no social justice.

I wonder how many working poor are poor because the rich are keeping them that way because the rich have the power to do so. Don't tell me they don't or won't, just look at your American history and what led to the formation of Unions, they certainly do. Don't tell the workers of big companies whose pensions were wiped out because of greedy illegal activitiy of the wealthy and powerful who wanted to become even more rich and powerful on the backs of those who work for them. Enron was a case of pure, unalderated greed by the rich which ended up destroying the lives of thousands of people who trusted them. Don't talk to me about how well off those 12 million lower, middle, and upper middle class people driven out of work with many going into poverty and hunger by the greed and wrong-doing of wealthy and powerful bankers and financiers who manipulated America's financial system to their own benefit.

Get real, American Romance, anytime, and I mean anytime with no exception, when on class of people get the upper-hand in a society, unless mitigated by an outside force, such as a socially conscience government and society, then that class will increase its advantage over and at the expense of the less well-off.


onuigbos profile image

onuigbos 5 years ago from Southfield, MI

All that the Tea party and GOP want to do is crash the economy, and hand President Obama a one-term tenure. The debt ceiling fabrication was part of the grand design to make the system unworkable for political gains. I just hope Americans will wise up, and see the Tea Party as unpatriotic, and UN-America, and send them packing when the opportunity presents itself. Great hub my friend.


My Esoteric profile image

My Esoteric 5 years ago from Keystone Heights, FL Author

Thanks for considering my hub, Onuigbos. While I agree that Tea Party and Conservatives (as opposed to Republicans) clearly want Obama as a one-term President, I can't go quite as far regarding their motives. No doubt the consequences of their flawed understanding on how government and the economy in this country work is to crash the economy, as it has done many times in the past, I don't believe it is out of malice for America nor do they want to do it on purpose, most of them anyway. As you say, the debt ceiling was fabricated out of whole cloth with the now realized result of lowering our debt rating, I can't quite say they are unpatriotic. On the contrary, I think they believe they are behaving in a very patrioc way; it is just they don't understand that throwing-the-baby-out-with-the-bathwater is not a good way to run the country nor what our founding fathers had in mind with they wrote the Constitution.

If you have managed to bully your way through some of my other admittedly verbose hubs, you will find where I talk about RWA's, Right-wing Authoritarian followers. Much of the Tea Party and Conservative movement is made up of RWA's whose distinguishing, and fully researched, characteristic is they blindly follow those they perceive to be authority figures. Those that score high on the RWA scale will not question what they are told, even if the face of unquestioned facts to the contrary, and will defend their authoritarian figures ideas fervently; even to the use of violence in extreme cases. That is why it is so hard and frustrating to work with RWAs.

    Sign in or sign up and post using a HubPages Network account.

    0 of 8192 characters used
    Post Comment

    No HTML is allowed in comments, but URLs will be hyperlinked. Comments are not for promoting your articles or other sites.


    Click to Rate This Article
    working