Published June 29, 2011
Pressures on Obama for Debt Deal Mount
"Dealing with this deficit problem is far more important than meeting some artificial date created by the Treasury secretary."
When President Obama emerges today for an 11:30 a.m. press conference he will either be looking to pump up the pressure on Republicans for a debt deal or reassure participants in a shaky economy that a deal is nigh, but he can’t do both.
The president is being buffeted by competing political pressures.
Americans think his handling of the economy and debt issues is poor, so he needs a deal with Republicans quickly. Lingering uncertainty will harm the economy further and an impasse on such a vital issue given the long warning will look like a failure of presidential leadership.
But the path to a deal runs through the anxious members of his own party and would require considerable sacrifices at a time when the president is in full campaign mode and devoting most of his efforts at the donors and grass-roots organizers in the liberal base.
Obama has undertaken un unprecedented fundraising campaign and is working hard to recreate the liberal enthusiasm that vaulted him into the White House. The timing for example, of a big gay pride party at the executive mansion tonight, is no coincidence.
But to get Republican support for a debt hike deal, Obama needs Democrats to accept deep cuts, no tax rate increases and possibly some reforms to entitlement programs.
Today, Obama may do what Republicans dread most: start pumping up the pressure with warnings of default and interrupted entitlement benefits. The GOP has started pushing back in advance by casting doubt on the deadlines and dire predictions crafted by Treasury Secretary Timothy Geithner.
This would include lines like “hostage takers” and set the stage for a final showdown and be the kind of brinksmanship that riled up Democrats, who think Obama too squishy when dealing with the opposition, want to see.
Or, the president could express encouragement for a deal and suggest that the common ground is growing. This would be a balm to jittery investors and capitalists who fear that political pressures will drive the president to brinksmanship.
This would include Obama restating his positions in support of tax increases and short-term spending on pet projects, but not draw any lines in the sand.
Given the fact that Obama will meet this afternoon with Democrats to hammer out a deal and with Geithner, presumably to orchestrate the enactment of fiscal doomsday, this appearance may amount to a final effort to be Mr. Nice Guy before he starts a rampage against Republicans.
Greek Fire Will Burn Whatever Parliament Decides
“If we don’t get the money, we face a terrible scenario ... a return to the drachma, with banks besieged by terrified crowds wanting to withdraw their savings. We will see tanks protecting banks because there won’t be enough police to do it.”
-- Deputy Premier Theodoros Pangalos of Greece quoted by the Financial Times talking about a European bailout package.
They’re rioting in Athens again today, which is no surprise since civil unrest has been the Greek national pastime for a year or more.
But today, the Greek Parliament will vote on the latest austerity package demanded by its fellow Europeans in order to keep the government from defaulting on its debilitating debts to private banks.
No one seriously thinks that the U.S. will not honor its obligations, whatever happens with the current impasse on President Obama’s requested increase to the government’s $14.3 trillion borrowing limit. But Greece will certainly default without another cash infusion from wealthier countries in northern Europe.
It’s a sad day for the Greeks since there are no good options. The austerity measures are indeed dire, but the alternative is devastating inflation that would make paupers of most Greeks anyway. The way forward will be brutal, whatever happens.
If the measure passes, as is expected, Europe will be spared the immediate collapse of its faltering unified currency. International markets will respond to the move with good cheer and one of the most immediate clouds over the U.S. economy – a second bubble burst on sovereign debt – will have lightened.
But the underlying structural problem – that the productive economies of northern Europe are lashed to the unproductive economies of the south – will only worsen. Greece is a highly socialistic country. An economic reordering of the kind imagined by austerity backers seems highly improbable.
And then there’s this: If the Greek socialists agree to slash benefits again, the civil unrest in the already destabilized nation could worsen. If the Papandreou survives today, it may fall in a nastier fashion later.
Afghan Hotel Slaughter Foreshadows Trouble for Obama Withdrawal Plan
“It was not.”
-- Marine Lt. Gen. John Allen when asked at a Senate confirmation hearing if the Afgan troop withdrawal plan undertaken by president Obama was an option presented him by military commanders.
Perhaps one of the cultural gaps that exist between the West and Afghanistan is on defining success.
The Afghans today are touting the fact that fewer than a dozen people were killed when a group of Talibani brigands and suicide bombers stormed a hotel for Westerners inside the Kabul equivalent of the Green Zone. It took Afghan security forces a scant six hours and the help of only one or two NATO helicopter gunships to resolve the issue.
Power Play is all for cross-cultural understanding, but the Afghans may need to get up to speed on some Americanized standards if this whole security transition thing is going to work.
When the same kind of terrorists attacked 10 hotels in India on Nov. 26, 2008, it was not considered a success just because Indian security forces showed up.
The Kabul attack shows brazenness, perhaps born of desperation, on the part of the Taliban and their Haqqani Network allies, and the difficulty of securing a nation where there insurgency is not geographically, culturally or ethnically discernable from the general population.
But it also shows tet political dangers for President Obama and his decision to chart his own course on unwinding his second, 30,000-troop Afghan surge. Top commanders continue to tell Congress that the president came up with the decision to reduce troop levels to about 70,000 ahead of the 2012 elections, with incoming Afghan commander Marine Lt. Gen. John Allen saying so bluntly under pointed questions by Sen. Lindsey Graham, R-S.C., on Sunday.
There’s a reason that politicians of the modern age, including Obama, generally fall back on the “listen to my generals” line. It shields commanders in chief from accusations that they didn’t support the troops. Such charges were fodder for many Democratic attacks, inkling from Obama, against George W. Bush and the Iraq war strategy.
The message from the military to Obama was that they could do the nation-building job he set out in Afghanistan if they had the resources. The response from Obama was that they should do the job with a little less.
U.S. forces have had great success in clearing and holding Taliban territory in the formerly lawless southern provinces of Afghanistan, but even with current troop levels, attacks like the one undertaken Tuesday will be all but impossible to stop.
The new, preferred mode of terrorist attack comes from those who have infiltrated Afghan forces, legitimate service members who have been turned by the Taliban and imposters. Even Western-level security would be able to fully contain an insurgency of that nature.
By opting for a Goldilocks plan for Afghan withdrawal – enough to placate voters anxious about his repeated escalations and gauzy mission but not so many as to create an outcry from the remaining Afghan hawks in the GOP – Obama has protected himself from some political attacks, but left himself holding the bag for whatever happens in Afghanistan from here on in.
Little Give and Take on Trade Deals
"I’ve never voted against a trade agreement before - but if the administration were to embed (Trade Adjustment Assistance) into the Korean trade agreement, I would be compelled to vote against it.”
-- Senate Minority Leader Mitch McConnell speaking to reporters.
Eager to boost exports and to break a logjam on presidential appointees, the Obama administration is offering up three stalled trade pacts – one with South Korea, one with Colombia and one with Panama – to Congress for ratification despite the anger of union-allied Democrats.
To soften the blow, the president will embed in the deal an extension of a welfare and job training program for workers who claim they have been displaced by foreign trade.
House Republicans say they will split the welfare program out of the free-trade deals and deal with (and almost certainly defeat) it separately.
And Senate Republicans may also move to block the South Korean trade deal if it, as expected, contains the welfare spending. It is unclear how many Democrats would support the measure even if it includes the spending given deep concerns over South Korean business practices.
Dems Try to Answer Crossroads Assault
“It's like responding to a roundhouse with an off-balance swat at the air; a pathetic attempt to manufacture news coverage by launching a spot that virtually no one will ever see.”
-- Jonathan Collegio, communications director for American Crossroads, in an email to Power Play about an ad campaign by a pro-Obama independent expenditure group in response to a $20 million Crossroads campaign.
The outside expenditure group led by former White House spokesman Bill Burton is going up with its first television ad, a spot in response to a $20 million swing-state blitz by Republican group Crossroads GPS.
The new ad, “Portraits” actually attacks Crossroads, and seeks to rebut the Karl Rove/Ed Gillespie group’s campaign that blisters President Obama for his “shovel ready” joke about the missed expectations of his stimulus spending package.
The ad also features themes from a potential Obama 2012 campaign, accusing Republicans of trying to “end Medicare” and trying to “tear down the middle class.”
Democrats aren’t saying how big the ad campaign launched by the pro-Obama group, Priorities USA Action, is. When political groups don’t tell, it’s usually not out of humility, but rather embarrassment.
Crossroads media buyers who are currently trying to snatch up spots for the conservative group’s campaign have been able to identify $300,000 in airtime purchases for the rival group’s spot.
Burton responded to the claim of the paltry buy with a Tweet: “Our buy is significantly larger. I’d recommend not taking our opponent’s word for it when they describe our actions.”
And Now, A Word From Charles
“As a matter of not law but democratic practice, Media Matters is obviously not a media investigative organization that looks at everything. It's in a war on FOX. You're allowed to do that in a democracy. You can be as nasty as you want. The only thing is don't ask for a government subsidy. Nobody wants to stop them or to shut Media Matters down. It's a question of whether your tax money and mine ought to be supporting it.”