C.C.wins 15th and Mariano saves 26th

NOW WASN'T THAT BETTER THAN THE DEBT DEBATE?

Well, we close today with the Tan Man pulling his debt bill from the floor because the CBO scored that it would only save $850 million, not the $1.2 trillion as advertised. Also the Republican caucus is mutinying. Heritage Foundation, Freedomworks,the Club of Growth,the teabaggers and the Cut,Cap and Balance Caucus--yes there is such a thing--have opposed the plan because the Supercommittee of 12 might--yes, might lead to higher taxes. John Boehner is a man dangling from a thread. Little Ricky Cantor played a film clip to fire up the troops and said that there had to be unity in order to call President Obama's bluff. No sooner did that get heard by the White House and there came a statement that the President's advisers called on President Obama to veto the bill if passed. Harry Reid over at the Senate said that the Tan Man's bill was dead,dead,dead on arrival. That no Democrat would vote for it --ever,ever,ever.

The phones have been ringing off the hook--almost reaching the volume on the Health Care debate. Servers on the Hill have been crashing. Republicans have been closing their local offices to avoid constituent feedback. It's getting ugly and will ge uglier.

While the polls have not been so kind to President Obama and the Democrats, they have been utterly disasterous for the Republicans. By overwhelming margins, Americans back the President's approach. In a Reuters/Ipsos poll by a staggering 6 to 1 margin. The bad news for Democrats is that the Predsident's approval rating is flagging and people are very fed up with both parties on the issue of jobs and the economy.

But there is a real problem as the clock ticks down. Americans overwhelmingly support raising the cap of Social Security, rescinding the Bush Tax Cuts, taxing Hedge Fund managers and eliminatging corporate tax loopholes and cancelling the oil company subsidies. All of these things would stabilize America's financial future and secure Social Security well into the next century. And it would not be onerous on the rich and would not hurt the middle class. But none of these things are in the Senate bill or anything else being contemplated for the next week.

And also remember we start all this over again in about six weeks over the budget debate. Most Americans aren't aware of this. They actually think that debate is going on now. Can you imagine the outrage when next we're back at contemplating a real government shutdown if the government hasn't disappeared by then?

Since the debt ceiling possible deal will have no revenues in it and Americans support Obama's approach, how do we get there? INVOKE THE 14Th Amendment, Mr. President. The debts of the American government can not be questioned. That is what has maintained our financial system and our government since the Civil War. Let's remember that this year's Pentagon review raised America's indebtedness as a national security threat. That's the opening for the President. A default on America's obligations would seriously cripple our economic system, instantly creating 20% unemployment and cancelling the 70 million checks for Social Security, pensions and the like. To preserve the viability of the United States, President Obama should invoke it as a measure in the name of national security.

Bill Clinton suggested this, Laurence Tribe has come around to this view. And Robert Kuttner also is suggesting it. Jonathan Turley is dubious about this.

But Robert Kuttner explains in a recent essay that even as corrupt as the Roberts Court is can one seriously imagine them ruling that the President of the United States can not keep issuing Treasury Bonds as long as there are buyers. This is especially true when banks and Wall Street are screaming at the Republicans. We already know that the House despises the President of the United States and would love to impeach him. This would give them something to do for the rest of his term and theirs so they don't keep harming the American people.

Even if the President loses on this, it has bought him time and would allow him to rally the nation aggressively against the "reckless and dangerous behavior" of the Republicans and frame the debate on their attempts to destroy the economy.

As Mr. Bernstein, Joe Biden's former economic adviser, told Lawrence O'Donnell, President Obama must move beyond this debt ceiling debate onto arguments about ways to create jobs and grow the economy. While President Obama suggested the 14th amendment had not been advised by his lawyers at a townhall meeting in nearby University of Maryland, he should take this bold step. Howard Kurtz writing at the Daily Beast says that Obama's presidency hinges on the outcome of this debate. He has to find a way to overcome the pure lunacy in the House or he will go down and maybe us with him.

Howard Fineman believes both Boehner's plan and Reid's plan are both dead in the water. With Business Week and Bloomberg eviscerating the Republicans right now and the business community actually getting really nervous, Fineman thinks either there will be a short-term fix or a clean bill to raise the debt ceiling. A short-term fix would also wreck our bond rating as the head of Nasdaq testified. In the 89 times, the debt ceiling has been raised before, it has always been just a clean bill with no madness attached. When it was included in a budget bill, it usually consisted of one sentence inserted somewhere in the back. But I don't see this happening. The GOP response while being blasted by their constituents is to hide under the cover they were sent to Washington to cut spending.

I was glad to see Steve Benen catch the same delusionary column by David Brooks that I did. Brooks claims Obama muffed the Grand Bargain because he lost his cool. This mirrors commments by people like George Will and Jennifer Rubin who claimed Obama lost his temper and that's why talks broke down. Conservatives have been playing the angry Black Man card for the last two and a half years. So now the President finally gets pissed--to which I say,"Bravo." But Brooks' conceit is that he says that now people in Washington who really know how to do things are in control--such as? Brooks really thinks that people like Boehner and McConnell actually can do things, which they have never done before. Just look at Boehner's amateur mistakes on promising a bill on Monday only to have the CBO shoot it down today. It's clear none of the seasoned pols Brooks believes actually exist in Washington can defend themselves against the cult members who are part of their caucuses. Brooks knew this two weeks ago. Now it's Obama's fault?

As we head off the cliff, it's important to recognize that the actual debt of the United States is very manageable and that our problem is a revenue, not spending problem. President Obama and the Democrats have lost the framing problem, while maintaining popular support. Ezra Klein believes that the Democrats blew it by not insisting on raising the debt limit last year while they still had majorities in Congress. But he undercut his own case by citing all the major accomplishments the last Congress actually got down in the lame duck session--which then everyone was amazed by. Asking for raising the debt ceiling at that time, I don't believe was possible with all the other things on the table.

I believe President Obama can get back his narrative by invoking the 14th Amendment. It is as absolute on our national debt obligations as you can get. And then he can pivot to the infrastructure bank, which is supported by both labor and the Chamber of Commerce, and other ways to bolster the economy.

We'll Split the Difference

John Boehner's conference call was not the great pep talk to "Win One For The Gipper". He urged solidarity to his caucus so that President Obama doesn't get what he wants. I read his message that he doesn't have the votes of his caucus--yet and maybe not ever.

Nancy Pelosi surfaced last week with a debt ceiling idea that would entail budget cuts and no revenues but would leave the Big Three alone. No one paid attention then but I'm beginning to see this emerge as Harry Reid's Plan--which would cut about $2.5-3 trillion and would require no new revenues. The beauty of his plan is that we don't have to go over this again until after the Presidential election. And by then the Bush tax cuts are due to expire and the debt would be very manageable.

Progressive blogs continue to go haywire over the mere suggestion that there would be cuts to Medicare or the so-called entitlement programs. I think they have a point in maintaining pressure but think they overdraw the issue. Look at the plans now on the table. The Ryan Plan had called for the radical elimination of Medicare and some $6 trillion of program cuts, while neglecting a serious discussion of revenues. Progressives seem not to listen to President Obama either. He proposed in this year's budget $4 trillion in spending cuts over 10+ years. Harry's Plan gives him most of that, leaving the entitlement issue for a time when serious people are in Congress.

If Hapless Harry suceeds in the Senate, then watch for Nancy Pelosi to emerge in the House to try and get Boehner to agree when his plan fails. This would then leave about 1 trillion to debate in the future.

The tremendous if here is the inherent insanity of the Republican caucus in the House. It's too bad the Grand Bargain could not have been reached, in my opinion, because we would have put a chronic source of acrimony behind us. I think that's what President Obama thought. Even still if Hapless Harry's plan comes close to reality, we actually can move on.

Teresa Tritch did a nice summary today in the New York Times of the national debt problem. In 2001, George W inherited a surplus with the CBO projecting surpluses from there out if President Clinton's policies remained in place. But every year starting in 2002, the budget fell into deficit. In January 2009 just before President Obama took office, the CBO projected a $1.2 trillion deficit that year and in subsequent years, based on Bush's policies and the recession. President Obama added to the deficit in 2009 and 2010 with policies such as the stimulus package but these were largely temporary.

The main drivers of the deficits during W's years were the tax cuts and war spending with recessions in 2001, in 2008 and 2009.

The list is as follows:
Bush FY 2002-2009
Iraq,Afghanistan Wars--$1,469 trillion
Bush Tax Cuts --$1.812 trillion
Non-defense discretionary spending
--$ 608 billion
TAARP and bailouts --$ 224 billion
Medicare Pan D --$ 180 billion
2008 Stimulus and
other changes --$ 773 billion

Cost of Bush new policies--$5.07 billion

Obama FY 2009-2017 (with projections)
Stimulus spending --$711
Non-Defense discretionary--$278 billion
Stmulus tax cuts --$425 billion
Health reform and
entitlement changes --$152 billion

Cost of Obama's new policies--$1.44 trillion

Tritch argues that if the Bush tax cuts expire, then future deficits would be cut in half and become manageable. She also argues like every other person that spending cuts alone will not get us out of the jam but that taxces have to go up. So if you look at Hapless Harry's proposal, the cuts center around the wars ending and some savings in defense and about $1 trillion in other areas.

What's so amazing and frustrating is that the solutions to these problems have been clear for over the last two years and that our current political environment can't seem to solve them in the least harmful way.