Is Either Side Winning the Debt Ceiling Debate?

2. The GOP, on the other hand, is cold and selfish and risks the full faith and credit of the United States in pursuit of their radical agenda to harshly cut spending and protect tax breaks for the rich. They are accused of wanting to protect all the tax breaks for the corporate moguls and their jets, the oil and gas companies, and the Wall Street millionaires and billionaires. Every Obama pronouncement contains these “villainous” groups. Obama then adds that he himself is rich and can afford to pay more in taxes, showing how big a person he is. He could of course just write a check to the Treasury as others do, above and beyond what the law requires, if he feels so generous.

3. Obama wants the deficit issue solved in a big way, so he can get on to the job of “winning the future for America.” That can be done with more spending (sorry, I mean investments) on infrastructure, aid for college students, and energy independence (“creating green jobs” is no longer used, since it presumably does not test well in polls).

4. Obama could solve the problem himself if he had the power. Too bad we have a legislature and a Supreme Court to keep him from accomplishing all he wants to for America.

Both left and right have pointed to polls that appear to support their side of the argument. The president constantly refers to the fact that 80% of the population support his “balanced” approach. But the Gallup poll he refers to in making this case shows nothing of the sort. In fact, nearly five times as many of that poll’s respondents want a deficit reduction package to be all or mostly spending cuts, as opposed to those who want it to be all or mostly tax increases. The Rasmussen survey this week also indicates that there is fear that the compromise package will have too much in tax increases and too little in spending cuts.

On Friday, the president talked of the unfairness of a ratio of 3 to 1 or 4 to 1 for spending cuts to revenue increases. But the package the president was touting on Friday included just $1.65 trillion in spending cuts for $1.2 trillion in revenue increases, a ratio of barely 4 to 3.

The president and his agents (i.e., Tim Geithner on ABC) have condemned those House Republicans who have fought raising the debt ceiling. Many polls have shown that this is a widely held view, though many of the network and newspaper organizations which have conduced the polls have avoided mentioning that finding.

In fact, the president could get all of the borrowing room he needs to finance the projected deficits for the next 18 months covered without having any increase in the debt ceiling. This would involve taking internal or interagency debt (money owed by the government to itself, such as IOUs to the Social Security Trust Fund), now included in the total debt covered by the debt ceiling of just over $14 trillion, and selling these IOUs to the bond market over time. The Trust Fund is not a real fund, but the IOUs count against the debt ceiling.

While the media has tried to paint a picture of the “adult” Obama battling tax pledge zealots, the story is more complex. The president believes in more spending (investments or redistribution through entitlements, take your pick), and higher taxes to pay for it. He does not trust the results of what happens in the private market. Higher spending requires higher taxes (though he seemed comfortable with persistent high annual deficits until the GOP took the House back). Federal spending, now a quarter of GDP, is at a post World War II high, before the boomer entitlement binge and ObamaCare push it much higher. The GOP and Paul Ryan have laid out specific ways to bring both spending and taxes as a percentage of GDP back towards historical norms. That is the crux of the debate -- ride the entitlement wave higher, or put on the breaks.