Don't Make It a Game of Chicken

Are the Republicans carefully to make the debt ceiling urgency a game of chicken? Is the original goal now to force Obama and the Democrats to "cave" on their demands for tax hikes on the rich? Much of rhetoric from the hard right confirms this as the extreme test of success.

If the Republican leadership lets the situation get to a point where forcing the other side off the road and into a ditch becomes the be-all and end-all, the Republicans will finally emerge as the bad guys, and the American people, once again, will get shortchanged for the sake of political greed.

We can't lose sight of what's at stake with this crisis. Technically, the federal government has already hit the existing debt ceiling limit of practically .3 trillion. Without Congressional approval, added debt is off the table. Since the federal government is now borrowing more than 40 cents on every dollar it spends, a cold turkey approach to added debt would likely trigger huge painful adjustments real fast.

No one nothing else but knows how such a mess would play out because today's numbers and circumstances are unprecedented. But it doesn't take much of an imagination to spin disaster scenarios that leave everyone shaking in their boots. Treasury Secretary Geithner has now set August 2 as the drop dead date, the time at which the federal government will no longer be able to timely pay its obligations.

If the Democrats had it their way, the debt ceiling would just be bumped up another few trillion and the weighty deficit spending would roll on. Had the Republicans failed to win control of the House last November, there would be no immediate crisis, and America would continue on a course to spend itself to death.

But the Republicans did win. And the new Republican-controlled House has made it clear that the past will not be a blueprint for the future. The trillion dollar plus yearly deficits in each year of the Obama management have exceeded by many times the deficits of the past and have ballooned the total debt to limits no one could have imagined just a few years ago. The newly-elected representatives promised to rein in hereafter spending. The debt ceiling urgency gives them a prime occasion to start to make good on those promises.

To date, the negotiations have been rough. To appease the Republicans and get the ceiling raised, the Democrats are calling for a balanced approach, a mixture of hereafter spending cuts and tax increases on the rich. But it doesn't appear as if the White House or the Democrats are nothing else but hung up on the scope or depth of the tax hikes on the rich, so long as there are some.

Obama's campaign promised tax increases for the rich, something he failed to deliver last December in the negotiations to increase the Bush tax cuts. As he now prepares to "concede" huge spending cuts to get a "must-have" debt ceiling increase, he just wants something for his base. And nothing sounds good to his base than tax hikes on the rich (of anyone variety).

There is petite doubt that the Republicans now have the upper-hand in the negotiations and a occasion to nail down some serious long-term spending cuts. The Republicans have adamantly refused to discuss any tax increases, claiming that any tax hikes will hurt small businesses and job creation. The issue now is whether this refusal to play ball on taxes is strategic positioning to make the best deal possible or a mission to insure that Obama and the Democrats get nothing. Let's hope it's the former.

Indications recommend that the negotiations are working. Some evaluation that the long-term spending cuts now on the table may exceed by more than four times the requested tax increases. So the balanced approach nothing else but isn't all that balanced. And maybe added stonewalling on tax increases will added add to the lopsided mix as the witching hour approaches.

Plus, if the Republicans nothing else but play their cards right, they likely can trade some inoffensive tax increases on the rich for distinguished tax incentives for all those, together with the rich, who build businesses and originate jobs. The net result would be a allowance in taxes to drive businesses and encourage investment. There is fullness of fertile tax ground that can be profitably mined over the next week or so. All it will take is some smart advocacy and a willingness to throw the Democrats a few inoffensive tax hits on rich Americans.

And that's where the risk of a mindless chicken game may surface. There are some Republicans who seem to view their "no tax increase" position as some kind of mission or cause that must transcend all else. They would risk a dollar for a plug quarter to preclude the other side from getting anything.

If there are adequate of these zealots to hold up the show and risk it all for the sake of forcing the Democrats to fold, the Republicans likely will end up the extreme losers. They won't emerge as skilled negotiators who know how to smartly play, but not over-play, a good hand to nothing else but improve America's future. They will be correctly perceived as very shortsighted political opportunists.

If this happens and the selfish recklessness of the right is exposed as the moment of truth speedily approaches, most in the middle will turn on the hard-nosed players who are willing to put it all on the line for political gain. The likely end result of this debt ceiling round will be a lost occasion and a weak deal for the American people. And the Republicans will belatedly seek that they played right into the hands of the Democrats by driving themselves into a ditch as a prelude to the all-important 2012 showdowns.

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