It’s the great mystery of the debt ceiling debate: Why is President Barack Obama so darn adamant about raising taxes? “This may bring my presidency down, but I will not yield on this,” Obama told Republicans before dramatically exiting their budget meeting last week.
This is the Democratic talking point: Cutting spending by $111 billion, as some Republicans want to do, would cost the economy 700,000 jobs. Now I will admit that I am not sure if those are jobs somehow not created, jobs somehow not saved or what exactly.
Last night in a new report, Democrat-friendly Goldman Sachs dropped an economic bomb on President Obama’s chances for reelection (bold is mine):
Keeping America’s gold-plated credit rating may take both a deal to raise the debt ceiling (which will happen) and a meaningful deficit reduction plan of around $4 trillion (which is not happening). Moody’s says it wants a ”deficit trajectory that leads to stabilization and then decline in the ratios of federal government to GDP and debt to revenue beginning within the next few years.” And here is Standard & Poor’s in a report released last night:
So what are Republicans, particularly those in the House, going to do? Debt ceiling deadlines are fast approaching. And many in the GOP leadership, particularly in the Senate, think the party’s anti-tax resolve will dissolve if markets start to tumble, resulting in a deal far less appetizing than any discussed during the Biden talks. Certainly no hard spending caps or structural changes to entitlements or any other of the big things on the tea party wishlist.
So just how hostile is the GOP House toward McConnell’s new debt ceiling gambit (not to mention tax increases)? Here are some excerpts from a chat I had early yesterday evening with a GOP Hill source with good knowledge of the caucus. I think it gives some pretty good color:
Here is what President Obama said this morning:
As all of you know, I met with congressional leaders yesterday. We’re going to be meeting again today, and we’re going to meet every single day until we get this thing resolved.