The American Budget and Debt Crisis Continues

On Thursday, a Washington Post editorial blasted both Congress and President Barack Obama, saying they had chosen “not to govern” by refusing to reach a deal to stop the $85 billion in broad government cuts scheduled to take place on Friday. The Post concluded that rather than averting the sequester, “...each side has concluded that its interest lies in letting the ‘sequester’ proceed as scheduled — and then trying to win the political blame game. This abdication is bad public policy,” The Post said. Agreeing with every journalist and economist who has commented, the Post attacked the idea of indiscriminate agency cuts — and how these cuts will lead to employee furloughs and loss of services, while doing little to solve the nation’s long-term budget issues. Indeed, one GOP proposal would have given Obama more flexibility in deciding where to make cuts, but without raising taxes. The President refused the option to shift the cuts from higher to lower priority budgets. The Post commented, “Apparently, in addition to its policy objections, the White House figured that a softened sequester couldn’t force Republicans to accept a long-term deal including higher revenue. It’s a gamble that the worse things might get now, the better they will get later.“ A strange place, and a sad one,” the Post concluded. The dressing down by the Washington Post fell on deaf ears. The Senate took an up-and-down vote on Thursday on two bills, one each of the majority Democrats and the minority Republicans. Neither bill passed. The President, who should have forced congressional leaders to meet with him until a compromise was reached, chose instead to wait until Friday afternoon to call a White House meeting. It was far too late to avoid the cutbacks from coming into force at midnight Friday. And in truth, the one thing everyone agrees on is that the US must reduce its budget expenditures and its national debt. At the Friday White House meeting, the President and GOP leaders expressed their determination to not let the fight shut the government down on March 28 when the temporary extension of the debt ceiling expires. Obama and Republican House Speaker John Boehner's office said meeting participants agreed legislation should be enacted this month to continue government operations while Congress and the administration work separately to find ways to replace the automatic cuts. Perhaps a deal will be brokered this month, but both sides will have to be much more open to compromise. Obama has not succeeded to persuade Republicans to accept his proposal to reduce deficits with a blend of tax hikes and long-term reduction in entitlement spending. And, in fact, many Democrats see the President's willingness to deal away entitlements as a betrayal of the Democrat Party's central tenet. But Obama softened his own rhetoric on Friday. Although he called the cuts "dumb" and predicted they would hurt the economy, he said: "This is not going to be an apocalypse." Obama used the Friday meeting to again explain his 10-year, $1.5 trillion deficit reduction plan. His chances are squeezed by both anti-tax conservatives and by liberals unwilling to cut into Medicare and Social Security, and by the GOP leadership that has said it will refuse any new revenue after agreeing to Obama's demands two months ago for a higher tax rate for top income earners. But, the White House says it believes Republicans will again agree to additional tax revenue, both to avoid drastic cuts and to win reductions in Medicare and Social Security spending from Obama that they have been unable to get from Democrats before. For example, Obama talks about closing loopholes to gain more revenue, but his tax plan would apparently close many corporate loopholes to lower corporate tax rates, not to generate more revenue. The Obama plan also cuts Medicaid and Medicare entitlements. Republicans say they are not impressed. Boehner rejected the Obama plan last December. But, we should remember, dear readers, that these are deeply important issues for America. They touch wide swaths of the American public and will set the country's course for 50 years. The long gridlock reflects the importance of the decisions that must be made. The doom-and-gloom agitation of the media is partly a reflection of their very short-term timeframes - get the story out and hammer home a position. But these fiscal and budget issues do not fit the media story mold. Be patient. Speaker Boehner and Senate Minority Leader Mitch McConnell will find the way forward. And Senate Majority Leader Harry Reid will join them, as will President Obama. "The impossible takes a little longer."