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Michael Brenner

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Debt Poker -- With a Cut Deck

Posted: 07/25/11 10:05 AM ET

The moment of truth is fast approaching in the crisis over raising the United States' debt ceiling. Unless Congress grants the Executive the authority to add to the debt, the Treasury in principle will be obligated to stop all payments not covered by existing funds. This is an unprecedented situation since never before has a political party, the Republicans, placed partisan political again above the responsibility to ensure that the "full faith and credit" of the American government is not jeopardized. President Obama has accepted that his administration and the country are being held hostage. He has declined to stigmatize the Republicans in Congress as the perpetrators of blackmail who are demanding as ransom drastic cuts in domestic social programs. These include curtailing Social Security and Medicare benefits even though they are financed from dedicated Trust Funds independently financed. The White House has agreed to those cuts -- much to the distress of many Democrats who are opposed to abandoning the party's signature programs. In addition, they worry that disaffected Democratic voters will stay home come election day next year.

Obama's behavior seems to conform to the 'Stockholm Syndrome.' It refers to a hostage who gradually adopts the mindset and outlook of the kidnapper as an unconscious means of psychological and physical (political) survival. The suggestive evidence is considerable. The White House's huge concessions were paired with its proposal for very modest increases in a few business tax loopholes. It did not even demand rescission of the massive Bush-era tax cuts for the super rich, which was a centerpiece of Obama's 2008 campaign. Those modest proposals on the table are rejected outright by the Republican leadership and now have been conceded by the Democrats. The former clearly believe that they have the psychological upper hand in this game of chicken. That is so despite the survey polls showing large majorities opposed to the starving of social programs and smaller majorities blaming the Republicans for the crisis. So cocksure are the Congressional Republicans that they walked out of two meetings with the President and then refused to return Obama's phone calls inquiring whether they would show up. A jilted President publicly admitted with more resignation than anger that he had "been left at the altar."Offensive behavior of this crudeness toward the President of the United States has no precedent.

The net effect is that (1) the federal government may indeed default on its debt payments; (2) President Obama is now putty in the hands of a relentless opposition; and (3) commitment to the greatest American achievements in social progress in its history are being abandoned. All this with a supposed Democrat in the White House and with a majority in the Senate. Now that is a change we can count on since it is already a done deal.

 
 
 
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HUFFPOST SUPER USER
SeeingIs
05:19 PM on 07/27/2011
It's not Stockholm Syndrome, its O's total lack of a spine, or some other body parts. He is a serial capitulator who foolishly negotiates with hostage takers.
05:18 PM on 07/25/2011
I believe it was Obama advisor Rahm Emmanuel who said "Never let a good crisis go to waste!" Republicans are just following his game plan.
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HUFFPOST SUPER USER
Tena
02:10 PM on 07/25/2011
Yeah, well, when FDR took office and came up with the New Deal, he had a cooperative congress. We don't have a functioning legislative branch anymore. The GOP doesn't believe in governing, so they are not governing and will not govern; it does beg the question: Why do they run for office in a government they don't believe in?

It looks to all the world as if they intend to destroy said government. They are destroying America in the process.
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HUFFPOST SUPER USER
CarryOn
no matter where you go, there you are
12:45 PM on 07/25/2011
4. .while the BRIC nations are rising they have the funds to purchase our debt...and the debts of European countries as well...What Congress has proven is that the branch of government that is in charge of budgets and spending is unstable (in oh so many ways)...

imho, Former third world countries are climbing the economic ladder and they will come to the rescue on the international level and we will find ourselves bumped back on the international leadership scale


Appreciate the Stockholm Syndrome synopsis...
iridium53
Semper Fi
12:13 PM on 07/25/2011
Tea-Publicans are bullies. Or, as you put it, "Offensive behavior of this crudeness toward the President of the United States has no precedent."

But, as so many children learn, one doesn't placate bullies through consistent compromise.
One actually must stand up to them. It's a principles, character and courage thing.

It is hubris for the president and Democrats to believe they can control Tea-Publican actions. No amount of caving will be enough - Boehner and Cantor have already demonstrated that.

Since Boehner and Cantor and McConnell are determined to take the country into default, give aid and comfort to our economic enemies, and put the U.S. in a depression - and they cannot stop them without caving - then let's get on with it. Boehner's Murder-Suicide threat has gone on long enough.

Washington is a corrupted corporatist kleptocracy for plutocrats.

Obama has an opportunity to show moral strength and political courage - by calling their bluff and not caving.

Tea-Publicans are very open about their belief that Obama will cave to their will. They are counting on it because he has so many times before.

We will soon see what he's really made of.
03:09 PM on 07/25/2011
Congress, being a co-equal branch of Government, like the Supreme Court, has been publicly dissed by President Obama, on numerous occasions, including the State of the Union Address. They are under no obligation to respond to his calls. Did he call back after he walked out of a budget meeting?
Obama voted against a debt ceiling increase, along with 100% of the democrats in both houses of congress, in 2006. Guess it wasn't a crisis, then.
By the way, Union donations often match or exceed those of big business.
11:44 AM on 07/25/2011
Mr. UnderUnlimited,

You're right of course. I guess that when you've seen one reckless Republican Congress you've
seen them all.

As to Bill Clinton 's advice on the 14th amendment, and his actions in 1994, it is a stunning commentary on Barack Obama's lack of conviction and timidity that he makes Bill look heroic by comparison. i never thought that possible.
10:54 AM on 07/25/2011
Obama and the republicans are not as far apart in ideology as the media or the democratic party would have us believe so the republican opposition now is strictly for partisan political gain. Obama is more than willing to cut social security and medicare as the republicans have demanded for many years and he is even willing to lower taxes and weaken the federal government so the only thing he hasn't done is to announce that he is switching to the republican party and still the southern party won't accept yes for an answer. Eventually the two right wing parties will agree to screw the American people in a bipartisan con job which will be hailed by the corprate media as a great achievement.
03:13 PM on 07/25/2011
Here's some news. Ready? Obama and the Democratically controlled (at the time) ALREADY cut medicare, by billions of dollars, as part of the affordable care act. The cuts proposed by the Republican Party in Congress are, Ready? cuts in the rate of increase, and restructuring for people currently under the age of 50. Here it is, in 2007, with wars going on, we had a budget that was balanced, with no increase in debt. By the end of 2010, the deficit and debt increased by 33%. I think maybe before we, (the employers of the posturing clowns we elected) agree to giving them more money, that they demonstrate the willingness and capability of managing the funds they are already getting. They are spending 25% of the GDP, while taking in about 18%. If we give them the 25% that they're spending, what assurance do we have that they won't spend 30%?
HUFFPOST SUPER USER
LesleyAnne
04:02 PM on 07/25/2011
Where was that balanced budget in 2007? The 2 wars were not included in the budget, to the tune of billions of dollars a month going out, so where's the balance? When Obama took office, his administration did include the cost of the wars and that's largely what we're seeing now--budget items that the Bush administration conveniently left out of their budgets. Raising the debt ceiling pays for funds already allocated, not new spending. So by refusing to raise the debt ceiling Repubs are refusing to pay for debts that they already incurred. Dems also voted on the Bush budgets, so they're not saints here either. But revenues need to be increased to meet the increasing demand of society as a whole after the debacle of the financial meltdown. Funds should be spent on education, infrastructure, and investments in the future. Instead, right now, billions of dollars are going into the pockets of wealthy people in the form of the Bush tax cuts instead of going into our economy. So, my question is, why should we give them the 25% they're spending if we have no assurances that they won't spend 30% giving more tax breaks to the wealthy?
10:38 PM on 07/25/2011
"Here it is, in 2007, with wars going on, we had a budget that was balanced, with no increase in debt."

No we most certainly did not.
10:51 AM on 07/25/2011
"This is an unprecedented situation since never before has a political party, the Republicans, placed partisan political again above the responsibility to ensure that the "full faith and credit" of the American government is not jeopardized."

Where were you from 1995-96, Mr. Brenner?
03:15 PM on 07/25/2011
Really? so how does anyone explain the party line split vote on increasing the debt limit in 2006? Guess increasing the debt wasn't all that important, then? Because along with 100% of the Democrats then in Congress, President Obama voted against increasing the debt ceiling.
10:37 PM on 07/25/2011
You might want to take a second look at your 2006 example when comparing it to what's currently taking place. The only reason that I didn't cite 2006 was that, though the Democrats jockeyed for partisan political gain, they didn't really jeopardize the 'full faith and credit' of the American government since, unlike today's Republicans, yesterday's Democrats:

1. Didn't have control of the House, thereby preventing them from holding up debt ceiling legislation

AND

2. Didn't filibuster in the Senate despite having the power to do so; the debt ceiling was raised with no preconditions after a partisan 52-48 Senate vote, meaning that Democrats could've filibustered; meanwhile, Senators like Jim DeMint are prepared to filibuster if Democrats try to raise the debt ceiling without preconditions.
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HUFFPOST SUPER USER
Marc Lewis
A 'Wobbly' Progressive for 50yrs
10:44 AM on 07/25/2011
Obama needs to take a page from the FDR play book. When FDR enacted the NRA and WPA he knew the Supreme Court would throw them out but as he reportedly said, 'by then they will have done their job' . By taking executive action under the 14th. amendment to raise the debt he takes the 'gun' out of the Republicans fist, for a time at least. Bill Clinton was quoted as saying it was what he would do, which leads me to believe it is certainly possible.
03:16 PM on 07/25/2011
First of all, only the NRA was ruled unconstitutional. Secondly, neither "did their job" as you and he put it, with the depression only ending as the run up to WW2 began, putting millions of people to work.
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HUFFPOST SUPER USER
Marc Lewis
A 'Wobbly' Progressive for 50yrs
10:05 PM on 07/25/2011
Ah yes, you are right there. The WPA did survive but you will notice I made no mention of the results of these programs, only what FDR was reported to have said. Secondly, was the NRA really a total solution to the economic problems of the time, or was it intended as a stop gap till a total solution could be secured? The papers of FDR's cabinet members might shed some light on this but, alas, I have not read them all.
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HUFFPOST SUPER USER
Jeffrey Miller
Fiscal Liberal, Social Libertarian
10:17 AM on 07/25/2011
I haven't ever been much for the nuclear option as they put it, but I'm beginning to think Obama should just tell the Republicans and all of congress to do its job and raise the debt ceiling or else he'll order the government to fulfill it's debt obligations without them. Republicans need to stop acting like this is Obama's fault. Congress has an obligation to raise the debt ceiling, not the President. They need to do their job and fight over spending during the next budget debate.
SeriesSeven
Libs Love Unproven Counterfactuals
12:39 PM on 07/25/2011
Considering that the democrats won't even attempt to pass a budget, any budget, I don't see how that debate is possible. The Senate voted down Obama's budget proposal 97-0. When is the last time the democrats actually passed a budget?
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HUFFPOST SUPER USER
Jeffrey Miller
Fiscal Liberal, Social Libertarian
01:06 PM on 07/25/2011
Perhaps you should examine WHY we don't have a budget. Republicans have fought ANYTHING that Obama has done. The most recent budget was defeated 97-0 because it was a procedural trick and everyone knew it. You republicans need to stop acting like your obstructionism is the Democrats' fault.
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mydangself
I can clearly not choose the wine in front of me
09:39 AM on 07/25/2011
The Democratic party does a horrible job of getting the message out and has let the Republicans set the terms of the debate and discussion for years. "Death panels", "Socialists", "tax and spend", "we need more cuts to create jobs", etc... the right sticks to a simple phrase and says it over and over. It doesn't matter that what they are saying has no basis in reality, the consistency and the lack of response from those who should hold them accountable means any negotiations already start heavily in their favor.