Patterico's Pontifications

7/25/2011

The political effect of a short-term debt ceiling hike

Filed under: General — Karl @ 3:22 pm



[Posted by Karl]

What would be the political implications of a deal for a short-term hike in the debt ceiling? The following tweets from Jonathan Alter, Nate Silver and Mickey Kaus shed light on the gap between the establishment media’s narrative of the debt ceiling fight and political reality:

Why Obama Has Already Won the Debt-Limit Fight: Jonathan Alter – Bloomberg http://bloom.bg/p50ohRSat Jul 16 00:06:42 via Twitter for BlackBerry®

In his Bloomberg piece, Alter wrote: “The good news for Obama is that the more liberals, lobbyists and apologists for the rich squawk, the more fiscally responsible he looks to the independent voters who will determine the election.”

Nate Silver seems to be on the same page as Alter, particularly in the context of a short-term vs long-term (meaning past the 2012 election) debt ceiling deal:

Not clear to me why GOP want another debt limit fight in the winter. Obama’s polling isn’t good on this, but theirs is terrible.Mon Jul 25 00:32:36 via web


However, Mickey Kaus turns this sort of thinking on its head:

? for @jonathanalter-If Obama is “winning” debt battle, why don’t Dems want to have it again right before the election? … Alter? .. Alter?Sun Jul 24 23:59:54 via web


@jonathanalter One obvious answer is he isn’t winning this debate. He’s losing. Misjudged GOP leverage. Your take was … off …Mon Jul 25 00:51:51 via web


Kaus also makes a point about the polling:

SPIN-CNN sez O drops w/ libs-‘only’ 71% approv http://t.co/u0nkTk1 But he’s losing indeps by 59-39% despite debt theatrix designd 2 win themSat Jul 23 19:27:43 via web


Alter responds:

@kausmickey just ’cause BO’s winning doesn’t mean he shld want gov held hostage in phony crisis again soon. And needs to be on jobs.Mon Jul 25 00:29:50 via Twitter for BlackBerry®


@kausmickey my take was week ago. Now BO looks worse, tho polls show GOPs down. Next week he may look better, making your take…off.Mon Jul 25 01:07:51 via Twitter for BlackBerry®


I’ll give Kaus the last word:

@jonathanalter anyway yr take a week ago was “Obama has ALREADY WON the debt-limit fight” http://t.co/b6C2rya Implies wouldn’t lose w/i weekMon Jul 25 01:32:37 via web


Kaus and (maybe) Alter make important points. Pres. Obama has used the debt ceiling talks, particularly the prospect of a “grand bargain,” as a campaign ploy, contemplating (as Alter wrote) that a deal could split the right and bring independents back into his fold. Kaus notes Obama’s theatrics have not moved indies; I would add that the right hasn’t split (whether that is simply due to the lack of a deal remains to be seen).

Alter’s comment that Obama needs to be on the jobs issue is also telling. The polls he and Silver are eyeballing may show bad numbers for the GOP. However, presidents are typically judged on the economy, while the fallout for the Congressional GOP on Election Day may be far less than today’s media polls suggest. Indeed, even the most recent Gallup poll shows the economy and jobs loom much larger in the public mind than the deficit (they may be more connected than the public thinks, but the subject here is what the public thinks, not what it should think).

Lastly, there is the gap between the establishment media’s narrative and events on the ground. The media tells the public that Obama and the Democrats are winning, and commissions polls to support this narrative. On the ground, Obama and the Democrats are not acting like they are winning. If they were winning, they would be eager for a rerun at the height of the 2012 campaign. Instead, it is the GOP that seems amenable to a repeat. Of course, both parties could be completely misjudging the politics of a debt ceiling fight. However, whatever what one might say about politicians, their business is politics; they may know more about it than the liberal lapdogs covering them.

–Karl

25 Responses to “The political effect of a short-term debt ceiling hike”

  1. Notice the complete radio silence on polling about CC&B? They only report on that which fits Teh Narrative.

    JD (6e25b4)

  2. Now’s the time to up the ante, flat-out refuse to raise the debt limit unless Democrats agree to repeal ObamaCare, bring a balanced budget amendment to the floor for a vote, and force Obama to keep the US solvent by making spending cuts without additional revenue.

    That would show the financial markets we’re capable of making sound decisions, and it would bring Independent voters to the GOP in droves.

    Plus, it would infuriate the Left, show Obama for a blustering and ineffectual empty suit, and embolden the TEA Party.

    ropelight (aed1f6)

  3. Yes it will but Boehner will cave.

    DohBiden (d54602)

  4. Here’s why the GOP is losing the PR fight…

    The general public (which excludes everybody on this site, so please don’t cite your feelings as evidence that I am wrong) doesn’t care about the debt per se, they tend to see things in terms of how it affects them. And short term trumps long term (it’s human nature, most people aren’t willing to make the short term sacrifice for a somewhat abstract long term gain).

    Thus, even though they might intellectually understand that raising the debt limit without cuts is bad, they’re more scared of the immediate pain of default than they are scared of what
    (might) happens later.

    To counter this, the GOP needs to argue that things would be a lot worse if they simply go along with Obama. And to do that, they need to argue that our current problems are due to the spending and the high level of debt. They need to argue that deficit spending (along with Obama’s anti-business hostility), is the reason unemployment is so high, that home prices are stuck, that gas prices are twice what they used to be before Obama took over and so on (all very defensible positions)… and, that as bad as things are now, they’ll be worse if they don’t cut spending big time.

    The GOP needs to make people fear the consequences of raising the debt ceiling without a ton of spending cuts. They need to depict themselves as the ones trying to get Obama and the Democrats to stop screwing the economy. They have to make people fear the consequences of continued spending and debt more than they might fear the temporary consequences of not approving a debt limit.

    Fear sells (not as well as greed, but there’s no greed angle to play here). And the side that can paint the other side as the ones causing more problems is the side that will win the PR fight.

    And the GOP isn’t doing this.

    steve (254463)

  5. peeps don’t eat before
    Big Zer0 speech tonight or
    end up on sneakers

    ColonelHaiku (8a1a1f)

  6. jonathan alter
    biggest 0h suck butt east of
    da Mississippi

    ColonelHaiku (8a1a1f)

  7. Obama will never, never, never, agree to spending cuts, or the repeal of ObamaCare.
    Never happen.
    At best, they’ll get an agreement from him to hold-in-place the new baseline from the Stimulus,
    and then he’ll break his word on that, since he is a congenital liar.

    AD-RtR/OS! (5a3560)

  8. AD-RtR/OS!: Obama wants to be re-elected. He knows that it’s better to have his base nice and happy, but he knows that in the end they will shop up to vote for him. What he can’t suffer is the loss of the mushy middle whose votes are necessary to win. Thus, he’ll agree to anything if it scores points with this group.

    steve (254463)

  9. congenital??? or pathological, AD?

    ColonelHaiku (8a1a1f)

  10. steve’s comment @ 4:14 pm you’re on the right track. The GOP needs to show how the current debt limit crisis would not be happening if Obama hadn’t wasted all the money as a result of the mortgage industry collapse followed by TARP, Stimulus, auto industry bailouts, Cash for Clunkers, war in Libya, etc, etc.

    It was Obama’s excessive spending that pushed us up against the debt ceiling. This crisis is one of his own making. Tie that bow around his neck and it’s goodbye to the one we’ve been waiting to get rid of.

    ropelight (aed1f6)

  11. And the mushy middle thinks his lack of a plan and spending orgy is wrong wrong wrong. CC&B polls at 65%+. Lack of leadership, no plan, and ongoing orgy of spending, not so much.

    JD (109425)

  12. CH…Probably both.

    Oh, to a very large extent, he’s already lost the middle; his base is all that remains –
    and now you’ve got Sanders of VT calling for a primary challenge.

    AD-RtR/OS! (5a3560)

  13. The winner of this is still not apparent. The GOP, as usual, is doing a poor job of explaining themselves. The best analogy I could think of is to talk about credit cards. If your card is maxed out, why would raising the limit be a good idea ?

    If you keep spending at the same rate, the limit will be reached again shortly.

    The way to deal with the issue of pushing the next debt limit debate beyond the election is to point out that the more the gov’t spends, the faster they will reach the new debt limit. If Obama wants to avoid a debate before the election, spend less.

    Mike K (8f3f19)

  14. I’m unconvinced that the general public is as accepting of uncontrolled deficit spending as steve seems to think they are.

    SPQR (26be8b)

  15. The best analogy I could think of is to talk about credit cards. If your card is maxed out, why would raising the limit be a good idea ?

    I agree, yet millions of Americans keep adding credit cards so they can keep charging and run up debt rather than cut back on their spending and get their own act together.

    I’m unconvinced that the general public is as accepting of uncontrolled deficit spending as steve seems to think they are.

    If they’re not worrying about themselves running up a lot of debt, why would they lose a lot of sleep over the government doing the very same thing?

    steve (254463)

  16. Fox reported earlier today that Goldman Sachs announced that only credible cuts greater than $4T will avoid a downgrading of US debt instruments. Clearly that ain’t gonna happen under any of the proposed plans.

    Stuart Varney reported that the ripple affect will include many entities that are forbidden by internal rules or legal regulation to hold any debt rated below AAA, so they would have to divest their current holdings.

    Obama thought he had GS in his pocket…guess he was wrong.

    in_awe (44fed5)

  17. The consensus I read is that the public is de-leveraging as fast as they can. I know I am.

    Mike K (8f3f19)

  18. in_awe,

    GS isn’t the first to make the point that none of the plans on tap may suffice to avoid a downgrade. Arguably, GS making that noise today is intended to pressure the GOP to accept a “grand bargain,” i.e. tax hikes.

    Varney is also correct, albeit a bit overstated. The pinch with most funds is not rules requiring only AAA debt, but in rules requiring a particular mix in the portfolio.

    Karl (0898e4)

  19. …And needs to be on jobs.”

    And yet last night he continued to insist on a massive job-killing tax increase as part of the deal to increase the debt limit.

    Mike S (d3f5fd)

  20. I want to believe Steve’s right. I see no reason for the GOP to assume otherwise.

    The GOP have already made a great offer. Obama’s the guy rejecting it. At the end of the day, I think plenty of voters will recognize that. If some think they should blame the GOP house as well… so what? Obama is running against Rick Perry in 2012, not Eric Cantor. He’s running against a guy who managed to get things done, so he better get things done too.

    Dustin (b7410e)

  21. When the demagogue in chief speaks about the economy just believe in the opposite of what he says.

    DohBiden (d54602)

  22. Jonathan Alter is right: If Barack Obama really thinks he has the better of the argument why should he not want to have it out again closer toi the election?

    The rather obvious flaw in President Obama’s argument is that he seems to be willing to veto a bill that would extend the debt ceiling for only six to nine months, not on the grounds that there is anything in the bill worth vetoing at the cost of having the federal government run out of money, but that next time, in the next bill, maybe there might be!!

    So if he thinks the Republicans want to go too far, you would think well then let him have it out with them in December or March, which is after all closer to the election.

    What’s going on?

    President Obama thinks people do not think in absolutes but in relative terms. He thinks he has a winning political argument in the idea that any deficity reduction should contaion some element of tax increases and not be all spending cuts.

    If he agrees to spending cuts now, in fact more spending cuts per dollar of debt level increase than the Rpublicans would require in a bigger deal, ultimately he would have to agree to more cuts overall than if you had one big deal. And he’ll get less taxes too.

    The President advocates compromise but he doesn’t seem to understand that “kicking the can down the road” *is* a compromise, and the easiest and maybe the only oine that can be done.

    True next time he won’t have so many spending cuts to agree to, having used up most of the ones he is comfortable with in this bill. But so what, if he is right? Even if he loses more spending he has to lose.

    He is not Bill Clinton and he won;t be able to shift the blame for the US Treasury running out of money.

    Sammy Finkelman (d3daeb)

  23. Is it time for us to start saying that we are happy to have new revenue in any debt-ceiling bill, as long as said new revenue is *not* from tax *rate* increases, but is from increased tax revenue due to more people paying taxes at existing rates – eg by getting more folk back to work, by getting out of the way of those who actually start small businesses ?

    And, even better, if the new jobs are from domestic oil production, domestic oil refining, domestic energy production construction (nuclear plants), and the like …

    Alasdair (e7cb73)


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