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Tuesday, June 28, 2011

Debt Limit Talks: Bush Era Rates Off Table And House Democrats Feel Ignored

After the bipartisan talks imploded last week when Democrats insisted that part of the deal include $400 billion in tax increases. This forced Barack Obama to finally come to the table in negotiations over raising the debt ceiling, which stands at $14.3 trillion now, to allow the U.S. to borrow more money.

There have been a flurry of meetings that now include Obama, Senate majority leader Harry Reid (D-Nev.) and Senate minority leader Mitch McConnell (R-Ky.), a separate meeting with House Speaker John Boehner and another meeting with House Minority Leader Nancy Pelosi (Calif.), Minority Whip Steny Hoyer (Md.) and Rep. James Clyburn (S.C.), assistant to the leader.

The Hill reports that the administration has stopped insisting on ending the Bush-era tax cuts.

I am starting to get a vague sense of deja vu though as I see headlines like "House Democrats feel jilted by the president in budget, debt talks."

Just as House Democrats did in December after Republicans took a large net gain of House seats,the biggest turnover of seats in decades, to take control of the House of Representatives, House Democrats are now upset, feeling that they are being taken for granted and ignored and complaining publicly.

“How is it that the House Democrats played such an important role [in the majority], and all of a sudden [the White House says], ‘Forget it, we’ll work with the Senate and the Republican leadership?’ ” asked Rep. Henry Cuellar (D-Texas), vice chairman of the Democrats’ Steering and Policy Committee.

House Democrats’ frustration with Obama is boiling in the intense heat of negotiations to reach a budget deal and raise the nation’s $14.3 trillion debt ceiling.

Capitol Hill Democrats have been steaming for months, since being sidelined during talks to extend the George W. Bush-era tax rates and fund the government this year. Many say the White House takes their support for granted but ignores them when it comes to making policy.

“Before this year we were playing a strong role,” said Cuellar, but “now a lot of us feel like we’re almost being ignored.”

Before this year they played a strong role because they had an overwhelming majority, and they had a Democratically controlled Senate and White House and were able to shove anything that they wanted through because the GOP could not stop them from railroading laws and bills.

November 2010 midterms ended that one party reign.

They are frustrated, speaking out to reporters, angry and aren't at the point where they can admit the reason they are being "ignored" treated as if they are "irrelevant" is because House Democrats are irrelevant at the moment.

Of course Obama is taking them for granted, who else are they going to support in 2012? The Republican candidate against Obama?

I don't think so.

Obama knows the answer to that question and so do the House Democrats that are throwing their temper tantrums.

The Obama administration needs the debt ceiling voted on, passed and raised by August 2, 2011.

Republicans have made it clear that for any debt ceiling raise to pass the House of Representatives, an equal amount of spending cuts be part of the deal. Want $2 trillion (example) then cut that same $2 trillion. Republicans want a balanced budget amendment to show they are serious about stopping the practice of spending more money than we have.

Republicans seem to have learned their lesson when they were thrown out of leadership positions the last time by their base for spending like drunken sailors with taxpayer money. They understand they campaigned in 2010 on the premise of cutting spending and lowering our deficit and if they do not fight to keep those promises, they can be replaced again in the next election.

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Wasteful Government Spending

Gallup found that 73 percent of national adults understand what liberal Democrats and Barack Obama (yes, redundant) do not seem to be able to... that wasteful government spending is more to blame for the rising federal budget deficit than not raising enough money in taxes.

Corporate Taxes vs Budget Cuts

In May, a New York Times/CBS News poll (neither organization can be accused of a "conservative slant") shows that most Americans prefer budget cuts over raising corporate taxes.

In general, however, few Americans back increasing taxes on American businesses: only 37 percent said corporate taxes should be increased to help reduce the federal budget deficit. The rest agree with an alternative argument that increased taxes would discourage American companies from creating jobs and hurt them in the global marketplace. Thirty-two percent would rather see corporate taxes remain as they are now and 26 percent said taxes on corporate profits should be decreased.

Government Shutdown vs Spending Cuts

In April Rasmussen found that 57 percent of polled voters suggest that a government shutdown would be preferred to not doing the deep spending cuts necessary to get the federal budget on its way toward balance. Only 31 percent believe that avoiding a shutdown is more important.

The bottom line here is that this battle, like the previous budget battles since November is being aired publicly with the same public referred to in the polls above, watching as Republicans fight for spending cuts, a balanced budget amendment and Democrats fighting to raise taxes.

I can almost see all those public statements used in GOP campaign videos with Democrats and Obama stating over and over again "raise taxes" with the GOP candidate saying "cut spending."

Democrats need to stop playing to their 13 percent fiscally liberal base and start playing to Americans as a whole or even to the 38 percent that view themselves as moderate on fiscal issues, or 2012 is going make their massive losses in 2010 look like a walk in the park.