Okay, assessment time: Failure

Well, We've Answered This Question (Chess Master v. Pawn Dept)
By James Fallows (The well respected

Aug 1 2011, 11:15 AM ET
Last month in four installments -- one, two, three, and four -- I posted readers' views on how we should understand President Obama's negotiating stance during the (unnecessary and abusive) debt-ceiling "showdown." Was he thinking eight steps ahead of the opposition, playing multi-dimensional chess while they were playing tic-tac-toe? Or was he a fatal step or two behind, playing patty-cake while they were playing Mixed Martial Arts? Chess master? Or pawn?

I think we know the answer, at least about this encounter. Pawn, and captured pawn at that.

The Republicans, with control of only one house of Congress, succeeded on virtually every point that mattered to them, especially to their most intransigent members. The Democrats, in control of the presidency and the other, "senior" house, succeeded on nothing that should have mattered to them, starting with implicitly legitimizing the conversion of the debt-ceiling vote into a hostage-taking exercise -- and ending with embracing a "compromise" that in the short term depresses hopes for dealing with our one genuine economic emergency, the unemployment crisis, and that in the long-run is likely to be as bad for our political system as for our economic prospects.

There will be time to parse all the details. And it's still a long time until the 2012 presidential election. It was four three months ago today that a triumphant-seeming President Obama announced the killing of Osama bin Laden; it is 15 months until Election Day. The point is, a lot can change in politics very fast. For now, just two notes of commentary. From Greg Sargent at the Washington Post yesterday (emphasis in original):

>>Anything can happen, but it apppears the GOP is on the verge of pulling off a political victory that may be unprecedented in American history. Republicans may succeed in using the threat of a potential outcome that they themselves acknowledged would lead to national catastrophe as leverage to extract enormous concessions from Democrats, without giving up anything of any significance in return.

Not only that, but Republicans -- in perhaps the most remarkable example of political up-is-downism in recent memory -- cast their willingness to dangle the threat of national crisis as a brave and heroic effort they'd undertaken on behalf of the national interest. Only the threat of national crisis could force the immediate spending cuts supposedly necessary to prevent a far more epic crisis later.<<

And from Tom Tomorrow last month, at Daily Kos. When I posted a link to this the first time, I said it was the "most biting" assessment of the Administration's negotiating stance. Now we see (as Joshua Green said at the time) that in fact it was the most prescient.






The President Surrenders
By PAUL KRUGMAN
Published: July 31, 2011
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A deal to raise the federal debt ceiling is in the works. If it goes through, many commentators will declare that disaster was avoided. But they will be wrong.

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Paul Krugman
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For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.

Start with the economics. We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.

The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record.

Indeed, slashing spending while the economy is depressed won’t even help the budget situation much, and might well make it worse. On one side, interest rates on federal borrowing are currently very low, so spending cuts now will do little to reduce future interest costs. On the other side, making the economy weaker now will also hurt its long-run prospects, which will in turn reduce future revenue. So those demanding spending cuts now are like medieval doctors who treated the sick by bleeding them, and thereby made them even sicker.

And then there are the reported terms of the deal, which amount to an abject surrender on the part of the president. First, there will be big spending cuts, with no increase in revenue. Then a panel will make recommendations for further deficit reduction — and if these recommendations aren’t accepted, there will be more spending cuts.

Republicans will supposedly have an incentive to make concessions the next time around, because defense spending will be among the areas cut. But the G.O.P. has just demonstrated its willingness to risk financial collapse unless it gets everything its most extreme members want. Why expect it to be more reasonable in the next round?

In fact, Republicans will surely be emboldened by the way Mr. Obama keeps folding in the face of their threats. He surrendered last December, extending all the Bush tax cuts; he surrendered in the spring when they threatened to shut down the government; and he has now surrendered on a grand scale to raw extortion over the debt ceiling. Maybe it’s just me, but I see a pattern here.

Did the president have any alternative this time around? Yes.

First of all, he could and should have demanded an increase in the debt ceiling back in December. When asked why he didn’t, he replied that he was sure that Republicans would act responsibly. Great call.

And even now, the Obama administration could have resorted to legal maneuvering to sidestep the debt ceiling, using any of several options. In ordinary circumstances, this might have been an extreme step. But faced with the reality of what is happening, namely raw extortion on the part of a party that, after all, only controls one house of Congress, it would have been totally justifiable.

At the very least, Mr. Obama could have used the possibility of a legal end run to strengthen his bargaining position. Instead, however, he ruled all such options out from the beginning.

But wouldn’t taking a tough stance have worried markets? Probably not. In fact, if I were an investor I would be reassured, not dismayed, by a demonstration that the president is willing and able to stand up to blackmail on the part of right-wing extremists. Instead, he has chosen to demonstrate the opposite.

Make no mistake about it, what we’re witnessing here is a catastrophe on multiple levels.

It is, of course, a political catastrophe for Democrats, who just a few weeks ago seemed to have Republicans on the run over their plan to dismantle Medicare; now Mr. Obama has thrown all that away. And the damage isn’t over: there will be more choke points where Republicans can threaten to create a crisis unless the president surrenders, and they can now act with the confident expectation that he will.

In the long run, however, Democrats won’t be the only losers. What Republicans have just gotten away with calls our whole system of government into question. After all, how can American democracy work if whichever party is most prepared to be ruthless, to threaten the nation’s economic security, gets to dictate policy? And the answer is, maybe it can’t.



The Diminished President
By ROSS DOUTHAT
Published: July 31, 2011
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By rights, Barack Obama should be emerging as the big political winner in the debt ceiling debate. For months, he’s positioned himself near the center of public opinion, leaving Republicans to occupy the rightward flank. Poll after poll suggests that Americans prefer the president’s call for a mix of spending cuts and tax increases to the Republican Party’s anti-tax approach. Poll after poll shows that House Republicans, not Obama, would take most of the blame if the debt ceiling weren’t raised.

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Ross Douthat
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Obama and Leaders Reach Debt Deal (August 1, 2011)
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Yet the president’s approval ratings have been sinking steadily for weeks, hitting a George W. Bush-esque low of 40 percent in a recent Gallup survey. The voters incline toward Obama on the issues, still like him personally and consider the Republican opposition too extreme. But they are increasingly judging his presidency a failure anyway.

The administration would no doubt blame this judgment on the steady stream of miserable economic news. But it should save some of the blame for its own political approach. Ever since the midterms, the White House’s tactics have consistently maximized President Obama’s short-term advantage while diminishing his overall authority. Call it the “too clever by half” presidency: the administration’s maneuvering keeps working out as planned, but Obama’s position keeps eroding.

Start with the first round of deficit debates this winter. After the Republican sweep, the White House seemed to have two options: double down on Keynesian stimulus or pivot to the center and champion deficit reduction. Instead, Obama chose to hover above the fray, passing on his own fiscal commission’s recommendations and letting the Republicans make the first move.

The strategy worked, in a sense. Goaded by the president’s evasiveness, Paul Ryan and the House Republicans put forward a detailed long-term budget proposal of their own, whose Medicare cuts proved predictably unpopular. But while the subsequent policy debate favored Obama, the optics of the confrontation diminished him. The chairman of the House Budget Committee looked more like a leader than the president of the United States.

Then came the spring’s great foreign policy dilemma, the civil war in Muammar el-Qaddafi’s Libya. The president (wisely) didn’t want to put America’s blood and treasure on the line for the rebels, but he also didn’t want to take responsibility for letting Qaddafi crush the revolt. So the White House opted for a kind of quasi war, throwing just enough military power at the problem to ensure a stalemate and then punting responsibility to our NATO allies. An Obama adviser told The New Yorker’s Ryan Lizza that the president was pioneering a new American way of statecraft: “Leading from behind.”

Again, the strategy worked, sort of. An immediate humanitarian crisis was averted, and Libya quickly fell out of the headlines. But it left Americans to contemplate a peculiar and unpresidential spectacle: The leader of the free world taking the country to war while pretending that he wasn’t, and then effectively washing his hands of the ultimate outcome — which, 135 days and counting later, is still very much in doubt.

The same pattern has played out in the debt ceiling debate. Instead of drawing clear lines and putting forward detailed proposals, the president has played Mr. Compromise — ceding ground to Republicans here, sermonizing about Tea Party intransigence and Washington gridlock there, and fleshing out his preferred approach reluctantly, if at all.

The White House no doubt figured that this negotiating strategy would either lead to a bipartisan grand bargain or else expose Republican extremism — or better still, do both. And again, the strategy is arguably working. Americans were given a glimpse of right-wing populism’s reckless side last week, and the final deal will probably let the president burnish his centrist credentials just in time for 2012.

But winning a debate on points isn’t a substitute for looking like a leader. It’s one thing to bemoan politics-as-usual when you’re running for the White House. It’s quite another to publicly throw up your hands over our “dysfunctional government” when you’re the man the voters put in charge of it.

In fairness, the president’s passive-aggressive approach is a bipartisan affliction. The ostensible front-runner for the Republican nomination, Mitt Romney, took a deliberately hazy position on last week’s crucial House debate, preferring to flunk a test of leadership rather than risk alienating either side. (The Washington Examiner’s Tim Carney quipped that “if you took Obama’s plan and Romney’s plan, and just met in the middle, you’d be in the middle of nowhere.”)

This leaves Americans to contemplate two possibilities more alarming than debt-ceiling brinkmanship. First, that we’re living through yet another failed presidency. And second, that there’s nobody waiting in the wings who’s up to the task either.

There is little to like about the tentative agreement between Congressional leaders and the White House except that it happened at all. The deal would avert a catastrophic government default, immediately and probably through the end of 2012. The rest of it is a nearly complete capitulation to the hostage-taking demands of Republican extremists. It will hurt programs for the middle class and poor, and hinder an economic recovery.
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It is not yet set in stone, and there may still be time to make it better. But in the end, most Democrats will have no choice but to swallow their fury, accept the deal and, we hope, fight harder the next time.

For weeks, ever since House Republicans said they would not raise the nation’s debt ceiling without huge spending cuts, Democrats have held out for a few basic principles. There must be new tax revenues in the mix so that the wealthy bear a share of the burden and Medicare cannot be affected.

Those principles were discarded to get a deal that cuts about $2.5 trillion from the deficit over a decade. The first $900 billion to a trillion will come directly from domestic discretionary programs (about a third of it from the Pentagon) and will include no new revenues. The next $1.5 trillion will be determined by a “supercommittee” of 12 lawmakers that could recommend revenues, but is unlikely to do so since half its members will be Republicans.

If the committee is deadlocked, or its recommendations are rejected by either house of Congress, then a dreaded guillotine of cuts would come down: $1.2 trillion in across-the-board spending reductions that would begin to go into effect by early 2013.

Negotiators have tried to make this penalty mechanism as unpalatable as possible to provide an incentive for the supercommittee and Congress to avert it. For Democrats, the penalty would include cuts to Medicare providers. The penalty for Republicans should have been new tax revenues, but of course they refused to consider that and got their way. Instead, their incentive will be trying to avoid large cuts in the military budget.

Democrats won a provision drawn from automatic-cut mechanisms in previous decades that exempts low-income entitlement programs. There is no requirement that a balanced-budget amendment pass Congress. There will be no second hostage-taking on the debt ceiling in a few months, as Speaker John Boehner and his band of radicals originally demanded. Democratic negotiators decided that the automatic cut system, as bad as it is, was less of a threat to the economy than another default crisis, and many are counting on future Congresses to undo its arbitrary butchering.

Sadly, in a political environment laced with lunacy, that calculation is probably correct. Some Republicans in the House were inviting a default, hoping that an economic earthquake would shake Washington and the Obama administration beyond recognition. Democrats were right to fear the effects of a default and the impact of a new recession on all Americans.

President Obama could have been more adamant in dealing with Republicans, perhaps threatening to use constitutional powers to ignore the debt ceiling if Congress abrogated its responsibility to raise it. But this episode demonstrates the effectiveness of extortion. Reasonable people are forced to give in to those willing to endanger the national interest.

Democrats can look forward to the expiration of the Bush tax cuts next year, and will have to make the case in the 2012 elections for new lawmakers who will undo the damage.