"Do or Do not. There is no try."

Is Harry Reid Caving Or Calling The GOP Bluff?

If you can still remember the GOP position when the curtain first rose on Debt Ceiling Theater, you will recall that the Congressional Republicans had put forth two goals.

First, an agreement whereby every dollar permitted to be borrowed by a raise in the debt ceiling would be matched by a dollar of cuts in the federal budget; and Second, there could be no tax increases as a result of the process.

Senate Majority Leader Harry Reid (D-NV) is now offering up a plan that ostensibly meets the GOP demands by proposing a $2.7 trillion cut in federal spending to be matched by a like increase in the debt ceiling – with no tax increases or revenue boosts required.

That certainly sounds like a win for the GOP, doesn’t it?

Maybe it is – maybe it isn’t.

If the Republicans take the deal, they will accomplish a few important things.

For starters, in a country where few people read beyond the headlines and often believe what they are told by Fox News, a GOP declaration of victory would likely hold up – even if that victory proves to be little more than a cosmetic win.

Such a deal would also leave many on the left dispirited, believing that the President and the Democrats – by allowing the GOP to wriggle off the hook on revenue increases – will have, once again, caved to the opposition. This would threaten to split the Democrats at the worst possible time as we head into an election year.

But the devil is always in the details – and the details very much skew to the Democratic Party perspective.

Much of the cuts in the Reid plan are tied to reductions in spending on our two wars along with discretionary spending cuts. By structuring the cuts in this way, Reid is creating an incentive for the war supporters in Congress, and the President, to get out of Iraq and Afghanistan once and for all.

Accomplishing this would likely be perceived as a ‘win’ by many American voters who think it is time to bring these wars to a conclusion. Of course, those who are focused on achieving true and well defined cuts to our federal budget would likely see this maneuver as an example of budget trickery intended to create the appearance of a cut where no cut is really is going to take place if we continue our battles overseas.

More importantly from a political perspective, none of the budget reductions in the Reid proposal touch the entitlement programs that are sacrosanct to both the left and the rank-and-file members of Democratic Party, not to mention – if the polls are to be believed- Independents and many Republicans.

Finally, the Reid proposal provides a large enough raise in the debt ceiling to take us beyond the 2012 elections.

While the failure to get any revenue increases would, no doubt, be a black mark against the Democrats and the President, the Reid proposal would permit the Senate Democrats to argue that they succeeded in solving the debt ceiling crisis without impacting on entitlements – something the President was clearly ready to do in trade for revenue increases.

Preserving entitlements will make a lot of people happy and very possibly balance the anger of those who want the Democrats to hang in there until they accomplish some revenue increases by cutting corporate subsidies from the tax code and raising the rates on the wealthiest Americans.

The deal would also preserve to the Democrats the substantial political advantage they gained through the public revulsion to the Ryan budget plan and its dramatic impact on Medicare and Medicaid.

All of this puts the Republicans in a tricky spot.

If they accept Reid’s deal, they can claim a victory and go home.

But they will know that they really have won very little beyond the appearance of a win and some continued protection for the wealthy by holding off any tax increases – for now. Remember that the Bush tax cuts once again expire at the end of 2012. Should Obama win the election – and bring along some Congressional Democrats with him -the story could be very different than it was when Obama was forced to leave the Bush cuts intact in 2010 in order to protect the unemployment insurance payments so badly needed by the millions of out-of-work Americans.

Because of the questionable value of such a deal to those in the Tea Party Caucus, the group that very much appears to be in the driver’s seat these days, the Reid proposal could be a non-starter, forcing Boehner to, once again, pass up a compromise opportunity.

If Boehner is forced to say no, it would seem impossible for the Republicans to avoid blame after having passed up yet another effort on the part of the Democrats to compromise – this time by offering the GOP what they say they wanted in the first place.

You can also expect Democrats to be quick to point out that the war savings Reid is offering in his deal also show up as a budget cut in the Ryan budget – making it look all the worse for the GOP who would appear willing to claim war savings as budget cuts in their own budget but refuse to consider them valid when offered as part of a deal in this instance.

Harry Reid may be showing us that there is more to his strategy skills than what has previously met the nation’s eye.

Stay tuned. There is a long way to go.

By: Rick Ungar, The Policy Page, Forbes, July 25, 2011

July 26, 2011 - Posted by | Budget, Congress, Conservatives, Corporations, Debt Ceiling, Debt Crisis, Deficits, Democracy, Democrats, Economic Recovery, Economy, Elections, GOP, Government, Government Shut Down, Ideologues, Ideology, Independents, Lawmakers, Politics, President Obama, Public, Republicans, Right Wing, Tax Increases, Tax Loopholes, Taxes, Teaparty, Unemployment Benefits, Voters, War, Wealthy | , , , , , , , , ,

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