Republicans are winning the debt limit debate

Mark Impomeni Contributor
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Last week, President Obama was hailed for saying at a press conference on the debt limit that Republicans are prioritizing tax breaks for corporate jet owners over food for the hungry and medicine for the sick. In reality, however, it was all one big bluff. The president was feeling the heat from criticism that he had been disengaged on the debt limit issue for far too long. That was evident from the mix of threats, blame-shifting, and tired class-warfare rhetoric that he employed in every answer.

The White House knows that Republicans hold the winning hand, so it continues to try to ratchet up the pressure on Republicans, sending Treasury Secretary Tim Geithner out to demand a deal be struck by the arbitrary date of July 22, two weeks sooner than the equally arbitrary August 2 deadline, after which the government will supposedly be unable to pay its bills.

Republicans have largely held their ground, and rightly so. They know the American people are on their side in the debate. The voters want federal spending curtailed and they want it done now. They know that raising taxes in a recession is not sound policy. The administration’s class-warfare bromides haven’t gotten any traction. Confident in this knowledge, House Speaker John Boehner abandoned hope for a so-called “grand bargain” of $4 trillion in spending cuts over Obama’s insistence that tax increases be part of the deal.

This week, there have been two major indications that the White House, and President Obama in particular, is bucking under the pressure. If the president refuses to back down on tax increases — and if Republicans do not fall victim to Senate Minority Leader Mitch McConnell’s timid and harebrained proposal to give the president virtually unchecked authority to raise the debt limit by $2.4 trillion over the next year — there is a good chance the debt limit will not be raised.

Contrary to the media and administration framing, the federal government won’t default if the debt ceiling isn’t raised by August 2. There is more than enough money coming in to the Treasury to service the debt for the foreseeable future. Actually, not raising the debt limit would balance the federal budget. President Obama would then be solely responsible for deciding which bills get paid and which don’t. For a president used to voting “present” on tough issues, that is a responsibility he wants to avoid at all costs. The strain is showing, and it’s beginning to erode the foundations of liberal dogma.

On Monday, Obama appeared at the daily White House briefing to somewhat walk back his tax hike demand. “Nobody is looking to raise taxes right now. We’re talking about potentially 2013 and the out-years,” Obama said. “In fact, the only proposition that’s out there about raising taxes next year would be if we don’t renew the payroll tax cut that we passed in December.”

While this statement is eerily similar to Walter Mondale’s famous promise to raise taxes if elected in 1984 — a campaign strategy he rode to a 49-state shellacking — it also contains a tacit admission that allowing a tax cut to expire is the same thing as raising taxes. Democrats fought hard against that line of attack in the debate over extending the Bush tax cuts. Obama’s admission makes it impossible for him to campaign on letting them expire next year.

The next day, Obama sat down with Scott Pelley of CBS and said that he could not guarantee that Social Security checks and other payments like veterans’ benefits would go out as scheduled on August 3 if the debt limit is not raised. “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” he said.

Aside from being rank fear-mongering, Obama’s statement it patently untrue. Social Security payments due on August 3 total $22 billion and there will be over $70 billion in the Treasury that day. If seniors’ and veterans’ checks are delayed, it will only be because Obama chose to take recipients hostage to try to extort concessions from Republicans.

By not guaranteeing payments, the president is admitting that the so-called Social Security trust fund is a fiction. There is no lock box. For years Democrats have fought reforming Social Security by arguing that there is no crisis and the program is solvent well into the future. Obama’s clumsy threat makes it nearly impossible for Democrats to resist changes to entitlement programs.

President Obama has shown himself willing to take almost any position without regard to his previous statements. But the debt limit debate has so rattled the White House that Obama’s attempts to shoot down Republican positions are only hitting liberal orthodoxies. Republicans have the White House on the run. Now is not the time to go wobbly. Republicans are winning the debate. They should continue to call Obama’s bluffs.

Mark Impomeni is a conservative opinion writer, blogger and a former contributing editor at RedState.com.