Just a reminder: We’re still $16+ trillion in debt
posted at 8:51 am on January 3, 2013 by Ed Morrissey
The fiscal cliff deal didn’t actually change that, nor the direction or rate of increase, either … except possibly to make it worse, on paper at least. Politico’s Glenn Thrush and Reid Epstein remind everyone that while Barack Obama and the Democrats celebrate a win over Republicans on raising taxes on high-end earners, the problem of deficits and the national debt won’t be solved by tax hikes:
President Barack Obama won’t be able to enjoy much of a victory lap from his win over congressional Republicans on the fiscal cliff fight.
There are about 16.4 trillion reasons why.
The staggering national debt — up about 60 percent from the $10 trillion Obama inherited when he took office in January 2009 — is the single biggest blemish on Obama’s record, even if the rapid descent into red began under President George W. Bush. …
Obama was able to splinter his deeply divided Republican opponents over the issue of tax cuts for the wealthy. But a similar fate might await the president and his Democratic allies if he brokers a deal with the GOP that requires massive spending and entitlement cuts.
During the cliff talks, Obama was purposely opaque about what cuts he’d ultimately accept, saying only that Republican resistance to a one-shot grand bargain meant he needed to make a deal in pieces — taxes first, spending second.
That tactic delayed but didn’t eliminate a looming day of reckoning on spending and entitlements that will come within 60 days thanks to the convergence of the debt ceiling deadline and the new deadline for keeping automatic cuts from kicking in.
Republicans wanted to trade the tax hikes for entitlement reform. They didn’t get that, but they did hang onto the debt limit as a bargaining chip. With most of the Bush tax rates permanently enshrined in law, the GOP no longer has to play defense on deficit reduction, backed up against an anti-tax-hike pledge. They can now argue that the country needs to stop borrowing from China in order to pay for its current obligations and creating debt that will extend to four generations into the future.
Democrats have a short window to navigate on this debate — and not just because of the debt limit. They argued all throughout 2012 (and really since 2008) that the fiscal problems of the federal government could be solved by demanding higher taxes from the wealthy. Well, now they have those tax hikes, and it won’t take very long for everyone to figure out that the problem not only didn’t get solved, it didn’t even get dented. Without nearly concurrent and significant entitlement reforms, the outcome will expose the irrationality of the tax hikes on which they have based their entire domestic political approach.
This time, Obama will need to demand some concessions from his own ranks in order to show real progress on deficit control. Can he get it — and can he get it in time to keep from having the “fairness” argument from being exposed as irrelevant to the true drivers of the massive current and future federal deficits?