Debt Ceiling Exposes Deepening Democratic Divide

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Published April 29, 2011

| FoxNews.com

Competing pressures for the 2012 election have put President Obama and moderate Senate Democrats on a collision course over Obama’s pending request to raise the federal debt limit.

The overarching political need for Obama is to revive the sputtering economy, and he believes that slashing spending now could keep the economy stagnant or even trigger another recession.

But for Democrats who represent Red States, like West Virginia’s Joe Manchin or Nebraska’s Ben Nelson, the imperative is to show voters that they have gotten the message about the need to get spending and debt under control.

Obama already had to surrender his preferred means of reducing the debt when he traded away a tax increase for upper-income earners after the midterm elections. Obama then had to agree to cuts to spending in order to prevent a government shutdown. The cuts may not have been what GOP fiscal hawks had hoped, but they still constituted an abandonment of Obama’s original call for more spending to prop up the economy.

As the administration looks for a way to get moderate Democrats on board with a politically unpopular increase in the soon-to-be-breached debt ceiling, the president’s men know that this is only the second of a brutal three-round fight over spending this year. First came the deal on the unfinished budget from last year. Second is the debt ceiling. Third will be a bare-knuckles battle this fall over the next year’s budget.

The president knows that when the current spending plan expires Sept. 30, he will have to make another round of concessions to Speaker John Boehner to, yet again, prevent a government shutdown.

In this middle leg of this year’s budgetary bout, House Republicans have basically told the president that a debt hike deal would mean dismantling his agenda. Having seen the near rebellion among House conservatives over the short-term spending plan, Democrats will need little convincing that the GOP is not in a bargaining mood.

Plus, given that Obama knows he will have to trade away more of his priorities in September to get a budget, he is not looking to have everything on the table for the debt-ceiling hike.

That’s why the Senate is key to this deal. If Obama builds his debt deal in the Democratic Senate – starting with as many of his party’s 53 members as possible and adding in enough Republicans to get to 60 votes – the terms will be better for him.

If a plan passes the Senate, the challenge in the House would be to add enough Republicans to the 193-member House Democratic caucus to get the 217 votes needed for passage. Boehner would still have to agree to not bottle up the bill, but Obama would have to surrender less if he’s only asking for 24 Republican votes and a promise not to blockade the deal.

But before Obama can get to the table with Boehner, he has to get through his former Democratic colleagues in the Senate. And that’s where things get very complicated.

Obama now faces the prospect of entering the heat of his re-election bid not with the weakly growing economy his team had foreseen, but in an economic flatline. Growth rates have fallen, unemployment suddenly picked up, energy costs are astronomical and inflation is starting to take hold. If we see a repeat of 1970s-style economic asphyxiation, no amount of fundraising prowess will keep Obama in the White House.

The president’s economic team believes that the government must continue to prop up the economy in the short term. This is not a political posture. This is a sincere Keynesian view made more urgent by the president’s political predicament. The administration’s stimulus perspective also explains why Obama’s desperate desire to avoid the partial government shutdown that would result if the debt limit is not increased. If you believe spending $12 billion a day is the bare minimum needed to keep the economy afloat, the prospect of seeing that number reduced to $8 billion would be alarming.

The stimulus view holds sway with most Senate Democrats, but among a handful of moderates, especially those facing punishing 2012 re-election bids of their own, spending is a dirty word. And there will not be any votes to spare on this deal.

If Obama and Senate Majority leader Harry Reid can’t keep the Blue Team together on this one, Republicans will have Obama over a barrel. Senate Minority Leader Mitch McConnell will make Obama pay (or cut) dearly for every Senate GOP vote needed to pass the plan.

But having Obama’s name at the top of the ticket in November 2012 will be a drag for Manchin, Nelson and other Red State Democrats. Obama’s request for them to cast hard-to-explain votes for more debt strains the bonds of party unity. They won’t help Obama out unless he can offer some substantial political cover in the form of spending caps and debt reduction.

The president may find that Senate Democrats are less demanding than Republicans, but only slightly.

Chris Stirewalt is FOX News’ digital politics editor. His political note, Power Play, is available every weekday morning at FOXNEWS.COM.

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http://www.foxnews.com/politics/2011/04/29/debt-ceiling-exposes-deepening-democratic-divide/