Hitting the Policy Reset Button | HughHewitt.com | 08.08.11

With the S&P downgrade of U.S. government debt on Friday, it is time for the Obama Administration to hit the reset button.  The question in Washington and around the country is, does the Administration have it within itself to do that?

The answer is probably no.  During an interview that ran in Saturday’s Wall Street Journal, House Majority Leader Eric Cantor sketched a disturbing portrait of the president in the recent debt talks with leaders of both parties at the White House.  According to Cantor, when challenged during the talks, the president became “visibly agitated.”  Cantor added, “It’s almost as if someone cannot have another opinion that is different from his.”

The House majority leader also noted that the president invoked Ronald Reagan, not to establish common ground with the Republicans, but “to be a little patronizing of [Republican negotiators], because he assumed that anything Reagan did we like.”  Democrats have disputed Mr. Cantor’s characterization of the meetings, but the same demeaning trope has been evident in the president’s speeches.  It is of a piece with the president’s inexplicable tactic at the beginning of the talks, when he invited House Budget Committee chair Paul Ryan to his key budget speech at George Washington University, seated him in the front row, and then delivered an address insulting to Ryan and House Republicans.

Cantor was describing the talks that Republican Senate Minority Leader Mitch McConnell rescued by bypassing the president.  Two Saturdays ago, a day after the House of Representatives voted for Speaker John Boehner’s budget plan, McConnell picked up the phone and called Vice President Joe Biden.  He knew that Biden understood the art of negotiation and compromise as much as the president did not.  Within hours they had on track the agreement that passed Congress late last week.

The Administration has slammed Tea Party members of Congress for their refusal to consider tax increases and faux spending cuts, the preferred course of Democrats in the House and Senate, but similarly, if not at the same decibel level, opposed by all GOP members of Congress.  The truth is that the Tea Party and the GOP may have saved the markets and rating agencies from taking an even worse view of the U.S. government’s ability to control its spending and borrowing.

The talks needed a bad guy on the no-tax-less-spending side, and the Tea Party caucus gave them that.  Thanks in part to the Tea Party members’ place in the negotiating dynamics, the final deal had serious elements of cost control in it, though obviously not enough to satisfy the global markets.

Robert Samuelson reports this morning (http://tinyurl.com/3btxl2j ) that the deal was a win for the entitlement state and a loss for defense.  Nothing of substance was done to slow the ever-accelerating Medicare, Medicaid, Social Security spending trains.  The monumental wreck at a point certain down the line is just as certain this morning as it was two weeks ago.

And as Samuelson notes and asks, “President Obama keeps saying [defense] spending will fall, again as a share of the economy, to its lowest level since Eisenhower.  Why is he bragging about this?”  After all, as others have reported, China has been putting to sea a fleet of super-silent diesel-electric submarines.  It is preparing to deploy “aircraft-killer” missiles.  It will soon have four aircraft carriers in the Western Pacific, while we are about to have only ten for the entire world.

In short, if the balance of spending in the debt deal becomes the long run policy of the U.S. government, we will have a deep, deep problem.

The deal was, nevertheless, critical to do.  Getting it done has turned a spotlight on the fiscal fantasy world in which the White House and Congressional Democrats are living.  The president and his allies have taken a scorched-earth, rejectionist approach to spending cuts of any kind (other than defense).  Instead of cutting costs, they want to strangle the economy with tax increases.  But like the Tea Party caucus and others, S&P said cost cutting in the deal was inadequate to insure even the medium-term fiscal standing of the government.  Had there been no deal, media blame in the wake of the S&P downgrade would now be focused on those who fought for spending cuts, not those who rejected them.  In a democracy, clarity is critical and the debate brought us greater clarity.

With the Administration and Democrats in Congress incapable of abandoning their catastrophically failed policies, hitting the reset button will be up to the American people in November 2012.