Monday, May 16, 2011

Krugman Has It Right

Six months ago President Obama faced a hostage situation. Republicans threatened to block an extension of middle-class tax cuts unless Mr. Obama gave in and extended tax cuts for the rich too. And the president essentially folded, giving the G.O.P. everything it wanted.

Now, predictably, the hostage-takers are back: blackmail worked well last December, so why not try it again? This time House Republicans say they will refuse to raise the debt ceiling — a step that could inflict major economic damage — unless Mr. Obama agrees to large spending cuts, even as they rule out any tax increase whatsoever. And the question becomes what, if anything, will get the president to say no.

I think what will get the President to say no, frankly, is the fact that this is one area where he controls the dialogue. The alternative for Congress is to shut down the government. That would free the President to stop all Social Security and Medicare payments, for example. After all, he has to execute the legislation they pass and in the absence of passed legislation, has to execute what he deems fit to do to keep the country running.

As in 1985, this is an unhappy situation for Congress, and for Boener himself. After all, no Speaker of the House wants to be remembered as the guy who starved senior citizens.

As Krugman goes on to point out, the government is essentially an insurance agency with an army. The President will have to cut money off somewhere, but where? Congress has already promised to keep servicemen's salaries flowing, if they hold up interest payments the markets will tank, and that leaves the curiously underdiscussed senior benefits.

Too, the President has something else in his pocket: a national exposé of Teabagger philosophy. A lot of people voted for Teabaggers last year out of anger. In the cool dawn of the new era, that support has dropped significantly.

So he can basically go on TV tomorrow and say, "Go ahead, make my day."