The Not So Grand Bargain

As of this morning, everyone is reporting a deal that would raise the debt ceiling with commitments of approximately $2.8 trillion in cuts over ten years. Basically, we are looking at a waterd down version of the Grand Bargain. Gene Sperling of the President's Economic Council says that President Obama was fine with no tax increases until 2013, the time when the Bush tax cuts would expire. While progressives are screaming bloody murder, it should be remembered that Alice Rivlin had argued that the devil here is in the details and the timing. She had argued no to raise taxes in the middle of the recession but only when the economy looks like it really is going to recover.

The fight this morning is over various triggers. Personally I can't see Congress getting its act together by Thanksgiving to propose the combination of cuts and tax increases needed to meet the second tranche of cuts. Then it would automatically mean across the board cuts in government spending. As of this morning, Democrats were saying they were trying to save Medicare. As of last night the two triggers were supposed to be military cuts and Medicare.

What was interesting last night to see what the sort of bidding war was going on in military spending. Tom Coburn proposed $1 trillion for ten years. Barney Frank agreed and wanted to see it more.

While the New York Times and the bloggers bemoan Obama's rightward tilt on the debt ceiling and we will read constantly how Obama "caved", it should be pointed out that he was the one who created the Catfood Commission and actually initiated the movement to the largest government cuts in American history. Here, it will be the nature of the cuts that determine whether this would be an historical success. All cuts are not created equal. And all cuts do not automatically mean cutting economic growth.

What President Obama will have to concern himself with is making sure the GOP will not proclaim victory since it has behaved in a decidedly subversive manner during this whole affair. Lawrence O'Donnell, for one, always argued that Obama really wanted a clean debt ceiling vote. But it was apparent he really didn't. Remember the Catfood Commisson was a dud and could not agree on its own basic recommendations. This whole exercise was a way for Obama to return to this whole issue--one that had been part of his own 2008 campaign.

President Obama wasn't kidding when he said that this might cost him his re-election. He must have calculated he could take the heat from progressives now before the election. But he will have to manage his message which the White House has not been able to do so far.

What the public and the international media are left with is a sense of disgust about the whole process--somewhat similar to the reactions to the whole Health Care debate.

At this time we still have a ways to go before the deal is really finalized.

What has escaped everyone while this has been going on is tha deal President Obama reached with the auto industry about raising gas mileage to 52 miles per gallon--a single stroke that dramatically will cut our dependence on overseas oil. By the time Obama finished his term of office, all these various incremental changes will not be so overtly noticed but in the long haul their impact will be considerable.

I doubt they will be appreciated. The election will come down to the unemployment numbers. But the Black Man will have cleaned up most of the White Boys mess.

Two Words for former Obama supporters who are frustrated and want to sit out 2012--Supreme Court.