Congress throws a tea party
Overall, a pretty good day for those who believe in low taxes and less spending. Here is the money graph from my upcoming Reuters Breakingviews column:
Democrats and Republicans in Congress are gridlocked over the $1.1 trillion 2011 budget. So they will likely pass a temporary spending measure to keep the government running for another month or two. This creates a situation next year where incoming Tea Party Republicans can a) combine a threat of government shutdown with b) a refusal to raise the national debt ceiling to c) squeeze deep spending cuts from Obama and congressional Democrats. Indeed, some GOP insiders believe the president — with a bit of nudging — may be ready to strike a deal on tax reform and cutting future Social Security benefits along lines suggested by his own debt commission earlier this month. And as the tax compromise shows, Obama is now seems more than willing to anger liberals within his own party and scuttle past campaign promises to get legislation passed.
Of course, the biggie is healthcare and that is going to have to be settle by voters in 2012. But what a change from January 2009 when Obama’s election was supposed to signify a generational political swing toward more activist government.