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Posted at 4:06 PM ET, 12/ 9/2010

Why Democrats don't want to tie the debt ceiling to the tax cuts

By Ezra Klein

What's important to understand about the debt-ceiling vote -- where Democrats and Republicans will either strike a deal to increase the Treasury's borrowing cap or the country will collapse into default -- is that it's not like Democrats have simply forgotten about it. It's not that they haven't realized that they could tie it to the tax cuts, which Republicans want and which will add $900 billion to the debt. It's that they simply don't want to. “Let the Republicans have some buy-in on the debt. They’re going to have a majority in the House,” said Harry Reid. “I don’t think it should be when we have a heavily Democratic Senate, heavily Democratic House and a Democratic president.”

The theory goes something like this: Republicans will demand sharp spending cuts in return for lifting the debt ceiling. Let them. "Boehner et al have had the luxury of proposing all sorts of ideas that bear no relation to reality," says Jim Manley, Reid's spokesman. "Next year, they’ll have to lay it all out. No more magic asterisks, no more 'we’ll get back to you.’ "

In this telling, the debt ceiling vote represents a trap for Republicans more than an opportunity for Democrats. If Republicans want to cut spending, now's their chance. But that means passing a package of spending cuts, which they may find less enjoyable than simply saying that Democrats should stop spending so much. And if the American people aren't supportive of the Republicans’ spending cuts, the GOP will be caught defending an unpopular package as part of a political gambit that could lead to the bankruptcy of the United State of America.

But this is a dangerous game of chicken that Democrats are playing, and not one they've shown much stomach for thus far. President Obama struck a deal on the tax cuts because he was terrified, in a weak economy, of letting taxes rise slightly. Are we really supposed to believe that Obama and the Democrats will be less terrified of letting the United States default on its debt, with all the attendant consequences to the economy? And what if the Republicans move a package of modest spending cuts to programs Democrats care about mixed with a series of targeted proposals repealing different sections of the health-reform law? That is to say, a package of spending cuts and well-aimed attacks that are popular, but poor policy and offensive to Democrats?

In essence, Democrats are betting that they have more of a stomach for an economic showdown than the Republicans do. Looking back over the past few weeks, I wouldn't take that bet.

By Ezra Klein  | December 9, 2010; 4:06 PM ET
 
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Next: DADT didn't fail. The Senate did.

Comments

The biggest difference: big-business Republican supporters do not want to see a threatened default. That's why you see Boehner already squirming. They have a much better hand on the tax cut argument...and a weaker one on threatened default.

Posted by: dailykos2 | December 9, 2010 4:18 PM | Report abuse

What's the difference between having the GOP buy-in to the debt ceiling now, and doing it later? Either way, they've bought in.

And if there is a debt ceiling fight later, it's because the GOP will be trying to cut things Democrats want. And the end result will be that the Democrats will buckle like they always do, because otherwise EVERYTHING will be cut as the gvmt shuts down.

I think this is more rationalizing by the Dems. They are simply afraid of asking for more from this deal so they pretend to have a good reason for not including the debt ceiling in the deal.

Posted by: lauren2010 | December 9, 2010 4:18 PM | Report abuse

Ezra, you're the only person who is worried about the debt ceiling. Obama can just sit tight and say over and over again the Republican shut down of the government, the Republican refusal to send out Social Security checks, etc. Boehner doesn't impress me as someone who could hold up to that for long.

Posted by: 54465446 | December 9, 2010 4:21 PM | Report abuse

Now on this one, I'm with you 100 percent. There is nothing in past Democratic practice to suggest they won't give away whatever the Republicans take hostage in return for raising the debt ceiling. NOTHING.

Posted by: janinsanfran | December 9, 2010 4:25 PM | Report abuse

And... whatever spending cuts the Republicans push through, whether in relation to the debt ceiling or otherwise, have the effective nullifying the stimulus in the tax deal, to the extent of cuts whatever they may be. Seems to me the tax has that wide open loophole that lets the Republicans renege on a piecemeal basis by cutting spending, while the tax cuts are on the books for two years.

Posted by: jtmiller42 | December 9, 2010 4:32 PM | Report abuse

Considering how eager House Republicans will be to roll back a lot of the Democrats' portion of the tax deal, not to mention a host of other spending that benefits low- and middle-income households, I think the odds of the House GOP winning considerable concessions from Democrats in exchange for lifting the debt ceiling is far too risky.

Posted by: edmclen | December 9, 2010 4:36 PM | Report abuse

What stupidity.

That Queen Pelosi is blocking the proper vote on the greatest piece of legislation of the Obama term because a small fraction of her batshit crazy caucus doesn't like it. Of course, this legislation has the support of the majority of the people's House.

Sounds good. Kill DADT and START until the tax cuts are passed! The homosexual agenda doesn't take priority over the dire state of the Obama economy.

Posted by: krazen1211 | December 9, 2010 4:41 PM | Report abuse

Hmm. Something doesn't smell right. I read a lot of blogs and they all tell me that Obama is a sell-out who couldn't negotiate his way into an extra sugar packet for his coffee. And since the blogs have it right, the other thing must be wrong.

Posted by: willows1 | December 9, 2010 4:53 PM | Report abuse

Bigots like Krazen are a big reason why I am no longer a republican.

Posted by: lauren2010 | December 9, 2010 5:18 PM | Report abuse

Your fear is real when you say

"In essence, Democrats are betting that they have more of a stomach for an economic showdown than the Republicans do. Looking back over the past few weeks, I wouldn't take that bet."

But it is non-sensical for Dems or Obama to get into that fight. Let House GOP propose cuts and let them make the royal mess of debt ceiling issue. Never worry about GOP not increasing the Debt ceiling because their friends in rich places - Wall Street Journal, Bond Market. Stock Market, those who are going to get Lincoln-Kyle Estate Tax Breaks; all of those have far more stakes than you, me, Dems and Obama in keeping America's Financial Market functioning. They literally have, please try to understand.

Given that, GOP will solve the issue. Let them propose cuts and 'sale' to Public. Dems can continue to say, 'now is not the right time' the same way GOP justifies Tax Cuts.

If Obama and Dems get involved; that will be a mistake of the decade, utter foolishness there. But our Donkeys are slow. I have been commenting on this blog on this topic now third time; it is only now Ezra has picked up the logic. If this is with the most talented Progressive Blogger, one can excuse dim witted Donkeys to find this 'play' beyond their comprehension abilities.

Guy's just shut up here and let GOP unravel on it's own. When your competition does the job of uprooting itself, you watch and do not get involved.

Posted by: umesh409 | December 9, 2010 5:37 PM | Report abuse

One thing overlooked. It is likely that the Repubs are going to try and cut spending for many programs while freezing spending for most others. This would be a good start at balancing the budget. I think people are starting to realize that social programs must be limited to only those that truly protect the poorest and not try and spread the wealth. Just look at Europe and we can see where that course leads. Get the debt under control through targeted spending cuts and then let's take a look at tax rates and make some decisions on where our priorities lie.

Posted by: Billexy | December 9, 2010 5:54 PM | Report abuse

Throw 'em all out!

Posted by: lolas13 | December 9, 2010 6:16 PM | Report abuse

Also... Why can't the Democrats get it across that they are negotiating on behalf of everybody while the Republicans negotiate on behalf of 2%? The "fair and balanced" media treats them as co-equal parties. That keeping the government solvent should be regarded as a the special interest of the Democratic Party while Republicans simply push making the rich richer is truly bizarre.

Posted by: jtmiller42 | December 9, 2010 7:04 PM | Report abuse

This just sets us up for weeks and weeks of meaningless political posturing in the Spring. Include the debt limit in tax package and send Congress packing till July.

Posted by: bmull | December 9, 2010 8:40 PM | Report abuse

Maybe Obama can't be counted on, but I have some faith the Senate Democrats are a bunch of obstinate geezers who just love nothing more that kneecapping legislation, no matter which party it came from.

Posted by: zosima | December 9, 2010 10:22 PM | Report abuse

Democrats' vulnerability in a debt-ceiling showdown is not that they are less tough. It's that the president is a Democrat. And a president has enormously responsibility for the country and accountability to the nation and the world.

Individual legislators are well-practiced at behaving irresponsibly and escaping accountability, all the while blaming others. Each represents a tiny bit of one branch of the government. A president is one branch all by himself, and also head of state.

Recent history lesson: President Bush vs. House Republicans over the TARP bill.

Oh, and that battle also demonstrated how irresponsible Republicans can be in devotion to their ideology, or to their idea-free attitudes.

Posted by: fredbrack | December 9, 2010 10:56 PM | Report abuse

Democrats' vulnerability in a debt-ceiling showdown is not that they are less tough. It's that the president is a Democrat. And a president has enormously responsibility for the country and accountability to the nation and the world.

Individual legislators are well-practiced at behaving irresponsibly and escaping accountability, all the while blaming others. Each represents a tiny bit of one branch of the government. A president is one branch all by himself, and also head of state.

Recent history lesson: President Bush vs. House Republicans over the TARP bill.

Oh, and that battle also demonstrated how irresponsible Republicans can be in devotion to their ideology, or to their idea-free attitudes.

Posted by: fredbrack | December 9, 2010 10:57 PM | Report abuse

The onus is not on Republicans alone to cut the spending and debt, it is on both parties in Congress, the President and the government as a whole including states.

Not only the American people but quite a few other countries expect and need the US to handle the debt. The political games will go only so far on the debt issue. Whether Democrats and Republicans like it or not, the issue needs to be handled and the best way to do it is with both parties involved and to get it done before the decision is made for them.

Posted by: win1 | December 10, 2010 1:44 AM | Report abuse

What is a Republican? A Republican is a person who hates the middle class, the poor, minorities and all immigrants. The Republicans want the entire population to be homeless, powerless and without medical insurance. The new big Republican project is to kick public school teachers out of the middle class and leave them destitute. The Republicans are seething at the amount of power the teachers' unions are exerting and they won't be happy until the unions have been destroyed. When is America going to wise up to the Republicans? We should be fighting them in the streets, not compromising with them. Mark Montgomery NYC, NY boboberg@nyc.rr.com

Posted by: boboberg | December 10, 2010 5:03 AM | Report abuse

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