A pretty chaotic chapter in the deficit debate ended tonight with passage of a Republican bill in the House of Representatives.
Now the most important — and perhaps most entertaining — chapter is about to begin. For political cover Senate Majority Leader Harry Reid (D-NV) will seek to kill the House legislation. His act will get cheers from his party and from his activists.
But Sen. Reid will have to craft a Democratic bill that also can attract at least seven Republican senators. This is no small feat. He will need 60 votes to pass the debt reduction bill in the Senate. He already lost one cloture vote on Friday night. And West Virginia’s Democratic Senator Joe Manchin has declared his opposition to the Reid bill. This means the Democrats need to entice, seduce or bribe eight Republicans.
In private Reid will be sit down with Senate Minority Leader Mitch McConnell (R-KY) and deal. He’ll have to present a proposal that can attract bi-partisan support. In effect it is Reid’s bill that’s dead on arrival.
Most of the media bought into a Democratic narrative that ridiculed the seeming futility of House Republicans.They ignored the reality that once a bill passes from one chamber to another the political calculus changes. The Senate rules favor the minority.
Over the weekend something else also may become apparent. President Obama will be permanently sidelined as an observer. Of course he’ll be informed about the negotiations and his staff will stay in touch. But the President will be largely invisible and out of the talks.
Which is where the President sat throughout the historic debt reduction debate. He never presented a public plan. He never accepted the tough recommendations of his own deficit reduction commission.
Obama understands that cutting spending and entitlements is the third rail of politics. He refused to become the author of any proposition that would slash federal programs and entitlements. Cutting sacred federal programs would burn him with his base.
So he decided to let others carry the water. The President played the detached and aloof spectator. He pretended to be a frustrated observer. Most likely he hoped the issue would disappear. But he won’t be able to escape the crippling reality of our ballooning budget.
In the end it may be ironic that President Obama may preside — unwillingly — as the overseer of the end of the modern welfare state. He overplayed his hand in his first two years in office. Now the sheer financial math is against him. As Roger Simon wrote earlier today, “The welfare state is kaput. It’s gone — probably for generations to come.”
When might Democrats acknowledge it?
It could happen as early as this weekend when Senator Reid sits down in his Capitol Building hideaway and looks at the options before him — and before our nation.
In a very strange way, Harry Reid may have saved the fallen Republicans from themselves by killing their idiotic bill that raises the debt ceiling.
Forgiveness is the fragrance the violet sheds on the heel that has crushed it. ~Mark Twain
I don’t think the Democrats will ever acknowledge the welfare state is kaput. Their careers depend on it. They would rather keep the illusion going and pay for it by inflating the hell out of the currency than do the right thing.
And what happens when the money runs out, and those entitlements start to dry up?
The Dems will capitalize on yet another crisis, which they will gleefully pin on the GOP, which has, after all, always wanted entitlements to go away, to begin with. So, we have a scenario in which Obama’s threat about SS checks and such not being cut comes to pass, and the GOP ends up being the media-bloodied goat.
That’s the only path I see, unless the GOP is aggressive (and effective) in presenting the facts to the public.
I hope Boehner, et al, have a plan to deal with this. =’[.]‘=
Not so fast – +$3.8 trillion, largest tax increase in American History in Reid’s bill
“Senate Majority Leader Harry Reid has said that his debt ceiling bill, in a bow to Republicans, includes no tax increases. But does it really?
An analysis from the Republican Senate Budget Committee staff shows that Reid’s bill includes gimmicks that, if passed, would account for approximately $3.8 trillion in revenue — or tax increases.
The maneuvering is complicated; but when explained properly, it becomes clear.
Reid’s proposal includes a provision that “deems” budget resolutions for fiscal years 2012 and 2013, but Senate Democrats have not yet produced a 2012 budget proposal, much less one for 2013.
Within those anticipated budget resolutions lie the tax increases, according to the analysis, and here is where it gets tricky.
When the Congressional Budget Office scores a proposal, it uses either current policy or current law as its baseline. Reid’s bill is based on current law, which assumes certain tax breaks will expire according to pre-determined scheduled. That is a big deal.
The 2001–2003 Bush tax cuts are set to expire at the end of 2012. And some business tax breaks, “death tax” cuts, and the patch for the Alternative Minimum Tax expire at the end of 2011. Reid’s proposal assumes that Congress will not act to renew or extend those expiring tax breaks.
The Alternative Minimum Tax patch is a tax that runs parallel to the regular tax code for high-income Americans. If a taxpayer falls within the right bracket (a high one), he must use the AMT to calculate his federal tax. The AMT targets items that are write-offs or tax-exempt for people in lower income brackets.
Congress acts to “fix” or raise the AMT patch every year, in order to ensure that it does not inadvertently include middle-class families.
Reid’s proposal assumes Congress will not act to fix the AMT at the end of 2011.
All told, the expired tax cuts would cost $3.8 trillion.
According to the Republican staff analysis, the baseline is not the only gimmick in Reid’s proposal, but it could be the worst.”
http://dailycaller.com/2011/07/30/analysis-says-reids-budget-plan-contains-gimmicks-that-could-result-in-tax-increases/#ixzz1TbisXTio%22Daily
How refreshing to read an account that actually reports the facts accurately about the entire debt ceiling debacle! Obama spends money he knows the treasury does not have, the democrats stick their heads in the sand and ignore the rising debt and the republicans do the work to restore spending sanity and save the economy and our nation while blamed as obstructionists! Let all who point a finger at the repubs who are putting bills on the table for discussion remember – 4 fingers are pointing back to the dems who spend without discretion and then play class warfare to attack those who seek a fair and honest solution to the problem and know higher taxes on the nation cannot solve the problem long term!
Hit the limit and then sit back and watch Øbama cut program after program so as not to exceed it. Then howl bloody murder with each program that he heartlessly cuts. Win.