Economy tilts debt-deal win to GOP

President Barack Obama needs a successful end to the debt-ceiling debate more than Republican legislators need a win because of the sour economy, political analysts and advocates say.

“The aspirational goal that Obama set for himself — the grand bargain that would have come closest to fulfilling the upside potential [of a reinvigorated economy] — was never a serious possibility in the current climate,” said Bill Galston, President Bill Clinton’s chief domestic policy adviser.

“Without an economy-boosting grand bargain,” he said, “the president has to hope that the factors which have slowed economic growth during the first quarter turn out to be transient.”

“He has the most to lose in this debate,” because swing-voting independents already fault him for not improving the economy, said Luke Frans, executive director of Resurgent Republic, a GOP-affiliated polling group. Those voters, he said, are “skeptical, and on the brink of being negative.”

White House officials continue to press Republicans to sign on to a big deal that would impress swing voters by including some tax increases, budget cuts and modifications to entitlement programs and also by showcasing the president’s claim to be Washington’s grand compromise-maker.

The downward trajectory of Obama’s political position was made more clear this week when Obama rejected a proposal by Republican Majority Leader Rep. Eric Cantor. On July 13, the president said, “I’m going to the American people on this.” (Boehner says no need for Camp David summit)

But Gallup reported July 14 that only 14 percent of independent swing voters are satisfied with the country’s direction, and that registered voters would support a “Generic Republican” by 47 percent to Obama’s 39 percent. The underlying economic trends remain bad for the president. The formal measure of unemployment nudged up to 9.2 percent in June, and Wall Street’s forecasts for economic growth have sliped to below 3 percent.

The swing voters who backed Obama in 2008 “believe he’s made the problem worse … [and] don’t think he’s genuine in what he says,” said Frans, who recently completed four-focus groups that mostly consisted of Obama supporters, in Pennsylvania, Virginia, Florida, and Colorado.

The participants wanted “evidence that Washington is ready to stop its spending spree, and cutting $1 of spending for every $1 the debt ceiling is raised is viewed as failing to get ahead of the problem,” the Resurgent Republic report said. (S&P warns it may downgrade US credit rating)

“He needs to have an agreement that provokes high-fives and back-slapping in the [financial] markets, on Wall Street, and in the media … something that creates a positive buzz that the average voter who is confused would say that ‘he has to have done something,’’’ said Michael Franc, vice-president for policy outreach at the Heritage Foundation. In practice, that means, he said, “some revenues increase, broadly protection for entitlements … and showing leg on cutting defense.“

To escape this descent, Obama seeks “a change in trajectory, a change in the way Washington is going,” Resurgent’s Frans said. “Obama is so branded now as spending more money to restart the economy, record deficits and debt ceilings, I’m not sure what can it can do for him,” he added.