The real deal on the debt debate

By: Joe Scarborough
July 18, 2011 01:33 PM EDT


The debt ceiling debate rages on, with President Barack Obama daring the GOP to call his bluff and Sen. Mitch McConnell declaring a deal impossible with this White House. These days, it’s hard for most Americans to sort through the red-hot mess that is Washington.
In a gerrymandered America, extremism sells at the polls and in the world of political talk. Fact blurs with fiction and simple math becomes fuzzy.
Here are 10 truths about the debt crisis you won’t hear over the next month from the halls of Congress or the West Wing.
1. Barack Obama doesn’t want a deal.
Political theatrics aside, Obama has no political interest in putting together a grand bargain to resolve the debt ceiling crisis. The president and his team know that after two years of tactical blunders, the White House finally has the GOP on the run.
The mishandling of Paul Ryan’s budget has bled into a long, hot summer of stupid human tricks by Republican leaders. Even taking into account big media’s built-in bias against small government, the GOP has allowed itself to look intransigent, dogmatic and dumb.
That’s a trifecta worth playing for a president who desperately seeks approval from the same independent voters who elected him in 2008 and abandoned him two years later. The White House sees its rivals destroying themselves, so should they interrupt all the fun with a deal that is actually good for America?
2. The Republican Congress doesn’t want a deal.
Speaker John Boehner has lost control of his caucus, a tea party politician is surging past other GOP presidential contenders in the polls, and the Republican establishment is dead as a doornail. The center of Ronald Reagan’s party cannot hold because there is no center to a political organization whose most influential members of late have been Glenn Beck, Sarah Palin and Michele Bachmann.
Still, I suspect that GOP stonewalling will pay off politically in the end. Despite gasps and groans coming from the offices of editorial writers and Wall Street CEOs, the dirty truth is that most Republican freshmen will be rewarded politically at home for voting against every debt ceiling deal. Never mind doing what is best for America.
3. Barack Obama has no interest in entitlement reform.
Let’s face it. This president would rather spend this August vacationing in a double-wide with the Young Republican Club of Utah than seriously addressing entitlement reform.
Obama knows that the political battlefield is stacked against Republicans on the all-important issue of entitlement reform. The mishandling of Ryan’s Medicare plan is proving to be bad political medicine for many reasons, and the White House is in no hurry to help save the patient from a mess of their own making. Embittered Democrats also remember GOP candidates demagoguing Medicare in 2010 — and they are ready to return the favor next year.

The president was smart to talk about putting Medicare and Social Security on the table last week because he gambled that most Republicans wouldn’t be shrewd enough to call his bluff.

He was right.

4. Most Republicans have no interest in serious tax reform.

What conservative with any grasp on political reality really believes that lowering tax rates is realistic in 2011? With most public polls showing a majority of Americans supporting higher taxes for millionaires, there is no chance in hell that a Democratic president and a Democratic Senate will lower income tax rates, even if loopholes are closed.

If the Republicans want to reform a tax system that allows a billionaire like Warren Buffett to pay lower tax rates than his secretary, then the trade-off seems pretty obvious. Republicans should close $1 trillion in tax loopholes in exchange for spending cuts totaling $3 trillion.

If the GOP were willing to do that, it could take credit for shaving a cool $4 trillion off America’s debt without surrendering the Bush tax cuts. But Republicans are not interested in that kind of tax reform. So for the foreseeable future, it looks like some of America’s largest corporations will continue to pay absolutely nothing in taxes.

Good luck selling that to independent voters.

5. The Democratic president wants to keep Wall Street happy.

Be assured that a deal will be made to raise the debt ceiling in a way that will not cause heartburn on Wall Street. After all, Obama has raised more money from the financial community than any other politician in U.S. history. So even after all the whining and moaning, Wall Street will always get what it wants from Obama. If you don’t believe me, give Elizabeth Warren a call.

6. Republican leaders want to keep Wall Street happy.

Do I even have to explain? Didn’t think so.
7. Democrats don’t give a damn about debt reduction.
It shouldn’t be a surprise that a party that has championed Big Government for 100 years would be repulsed by the idea of cutting spending in Washington. Occasionally, Democratic presidents like Bill Clinton are forced by Fed chairmen or Republican majorities to behave rationally when it comes to deficit spending. But Obama has yet to show such an inclination.

As I have documented for years, George W. Bush increased the national debt by almost $5 trillion. That is a shameful record but is nothing compared with the spending pace being set by the same man who voted against raising the debt ceiling a few years back.

By the end of his third year, Obama will have signed legislation that added almost $3 trillion more to America’s debt. By his own projections, this administration will add an additional $7 trillion to the debt by the end of the decade — easily making his the biggest spending White House in U.S. history.

Any suggestion that this president cares about deficit reduction insults the intelligence of the intended audience. He does not. Neither do his Democratic allies in the Senate, who refuse to release their own budget. That tactic may keep pressure on Paul Ryan and the Republicans, but it also exposes the Democrats for what they really are.

8. Republicans don’t give a damn about debt reduction.

Who are you going to believe, Republicans or your lying eyes?

GOP candidates have been telling you for decades that they are your only hope for a balanced budget. And for a few years in the ’90s, they were right. But their record over the past decade has been abysmal.

Under George W. Bush, Republicans doubled the national debt and turned a $155 billion surplus into a trillion-dollar deficit. When the GOP asked for control of Congress in 2010, it promised to change its ways. But after taking courageous budget votes in the House and Senate, what is the end result?

Well, we did get a deal to end the government shutdown this spring. John Boehner’s plan was supposed to cut $38 billion from the deficit but ended up doing little to stem a set of policies that have put the United States $7 trillion deeper in debt. And now it looks like the debt ceiling showdown will end up with Mitch McConnell’s Republican Party giving the president unprecedented power to raise the debt ceiling. It all adds up to prove just how little the GOP establishment cares about debt reduction.
9. Both sides are lying about taxes.

Democrats want you to believe that tax hikes will cure the debt crisis. It’s a lie, and they know it. Republicans want you to believe that tax cuts will cure the debt crisis. That’s also a lie, and they know it, too.

Democratic calls to hike tax rates on millionaires and billionaires may whip the base into a frenzy, but it will do very little to pay down America’s $55 trillion in obligations over the next generation. Democrats know better but won’t admit that to voters anytime soon.

As for Republicans who claim that more tax cuts will magically grow America out of a debt crisis, please explain to America why almost a decade of Bush tax rates have coincided with the worst economy since the Depression and the biggest spike in deficits in U.S. history?

10. Both sides are afraid to tell you how bad things really are.

I’m a small government conservative by trade. I voted against raising the debt ceiling when Congress wanted to take it to a measly $5 trillion. I worked with a handful of Republicans to run Newt Gingrich out of town because he wanted to spend too much money. In his last floor speech, he attacked us for being members of the “Perfectionist Caucus.”

I consistently ranked as one of the most fiscally conservative members of Congress over my four terms and never voted for a tax increase. And I wouldn’t vote for one today.

But I learned through the years that politics is the art of the possible. America is $14 trillion is debt. We have over $50 trillion in bills coming due over the next generation. A mild bump in interest rates could cripple our economy for years to come. Greece is in flames. The European Union’s financial system is teetering on the brink of collapse. China is expanding exponentially. And America can’t compete with a rebuilt economic machine until we first fix its foundation.

Considering the challenges facing America this century, any Republican who squanders the chance to cut $4 trillion from our debt in exchange for $1 trillion in tax loopholes is no conservative in my book.

It’s time to tell Americans the truth. And the first party to do that will own the future.