The Debt Limit Talking Points we will be Hearing for the Next Month

The negotiations over how to raise  the debt ceiling have failed. Over the next month, both parties will try to rally their bases around the policies they prefer, while moving no closer to a deal on preventing the economic catastrophe that will occur if we do not raise the debt limit, reports Ezra Klein. After walking away from the negotiating table, Republicans are set to raise their demands from $2 trillion in spending cuts up to a balanced budget amendment in an attempt to rally their base. Democrats typically look at the very strict design of the BBA and dismiss it out of hand as a nonstarter. Meanwhile, Democrats are about to release a budget that will probably cut the debt using about 50% spending cuts and 50% tax increases. This probably means the Democratic budget won’t cut Medicare or Medicaid much, if at all (those cuts are extremely unpopular with Democrats and the general public). Republican Congressmen have balked at a deal that raises any revenue whatsoever, making a package that relies 50% on tax increases a nonstarter if negotiations were to resume.

I’ve laid out the parties’ strategy on the debt limit here, now here are the talking points both sides will be using to win the public over.

Republicans will make this an issue of “no taxes.” They will paint Obama as wanting to raise taxes  and will keep repeating that we can’t “raise taxes.” As a corollary to this, they will insist that Washington must cut “its” spending. As long as the debate remains on the surface level, basically “no to taxes, yes to spending cuts,” the debate favors the Republicans. If they can keep the debate there, then they will probably be able to get the Democrats (especially Pres. Obama) to back down.

Democrats will be the favorite if the debate goes below the surface level. Democrats will try to say that Republicans are protecting tax loopholes used by the very rich while cutting Medicaid for the very poor and college scholarships for the middle class. This was on display yesterday as Pres. Obama dared Republicans to defend tax breaks for private jets while pushing for cuts in Medicare and Medicaid. If the debate moves past just “raising taxes” to “closing tax loopholes used by corporate jet owners, hedge fund managers and the richest 1 percent,” then Democrats have a winner and can possibly force Republicans to relent.

The details are a sure winner for the Democrats but the six word soundbite is a winner for the Republicans in the court of public opinion. That’s where the debate heads from here. Of course, seeing this as a mere battle between Democrats and Republicans over spending and taxes misses the point that if Aug 2 comes and goes and there is no increase in the debt ceiling, then all of us lose. If the government starts defaulting on some of its debt, then America loses, no matter whose argument has the most adherents  in the court of public opinion. That’s why the game being played right now, against the backdrop of the debt ceiling, is such a dangerous one. The debt ceiling needs to be raised no matter if the two parties reach an agreement or not.

  1. I completely agree with your summation. You, know, I have to ask, where was all this fervor when Bush raised the debt ceiling SEVEN times?

    • Unfortunately, it was the same place it was when tax cuts for the rich and foreign wars bankrupted our nation….. nowhere to be seen.

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