Wednesday, July 27, 2011

Coming next week: financial cataclysm

Six days from a fiscal cataclysm, Speaker of the House John Boehner can't keep enough of his GOP colleagues in the fold to pass his own legislation to raise the debt ceiling. Over on the Senate side, Majority Leader Harry Reid has thrown in the towel and is offering a half-hearted bill to raise the debt ceiling in return for some ephemeral spending cuts and no increases in revenue.

I watched President Obama's and Boehner's Monday night addresses — Boehner's live and Obama's via the Internet — and thought Obama came across more genuinely. Boehner made his political points but wasn't entirely honest in talking about a "bipartisan" House proposal and accusing Obama of wanting a "blank check." Boehner probably fired up the right wing while Obama was seeking a broader appeal, and he likely succeeded. His call for compromise was one most Americans would welcome, and although he couldn't resist parroting the Democrats' catch phrase about the rich paying their "fair share" of taxes, Obama's overall point was well taken. Obama was on much sounder ground and more persuasive in arguing that all Americans should share in the sacrifices necessary to get our fiscal house in order — the wealthy should feel the pain just as much as the poor who lose federal services or the middle class who pay more for college loans.

If this impasse continues and we get to next Wednesday with no debt ceiling bill in place, we will all regret it. America's credit rating will fall, and interest rates will rise. Our payments on the national debt will rise, and that will create even more federal debt or dismembering cuts to federal spending, including Social Security. Interest rates on mortgages and consumer loans will also rise, and that will throw us back into a deeper recession as home sales and car sales collapse. Business loans will be more expensive, and that will curtail jobs. The dollar will fall, and that will mean higher prices.

To the freshman Republicans who have vowed not to raise the debt ceiling, no matter what, and have fought any inclination Boehner might have to compromise, I can only ask: Are you happy yet? If all of this transpires, Democrats will be able to run in 2012 under the slogan "We're not crazy!" Of course, remembering Democratic congressmen Weiner and Wu, Republicans can counter with "We're not perverts (or at least haven't been caught at it)."

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