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Attacking the debt — three weapons and a strategy

I was pleased to read in Politico that, according to high level House sources, at least 90 percent of Republican House members are prepared to allow the sequestration cuts to take effect. President Obama would like to compromise by substituting revenue increases for some spending cuts. But if Politico is right, this is a non-starter in the House.

By contrast, according to Politico, only a bit more than half of the GOP House members are prepared to refuse to raise the debt ceiling unless Obama agrees to dramatic cuts he has repeatedly said he opposes. A refusal to raise the debt ceiling would likely carry dismaying consequences. This makes a hard-line Republican stance extremely risky.

The third possibility is to bring on a government shutdown by refusing to extend the “continuing resolution” that funds current government operations until March 27. According to Politco, this move has more support than the default option, but less than the sequester. We saw during the 1990s the political risks associated with a Republican-induced government shutdown.

I’ve argued for some time that the sequester is where Republicans have the upper hand. Obama views it as draconian and so do many Republican insiders. On the other hand, I doubt the public sees anything draconian about across-the-board government cuts to the tune of about 8 percent. And I think the public is basically right. Many conservatives (including me) won’t be happy with large cuts to the Defense Department budget. But if the debt is the time-bomb conservatives represent it to be, we cannot expect the Pentagon not to take hits.

In any event, unlike with a default or a government shutdown, sequestration would give Obama nothing of much resonance for which to blame Republicans. Our one-trick pony president would be shorn of his one trick

Obama and his friends in the media will try to change the public perception of the sequester. But in my opinion, they can do so only by deliberately mismanaging it so as to maximize the public pain. And this is too risky for Obama to attempt. The public likely will expect him to be able to manage what it will view as non-major cuts in government spending.

If Obama realizes that Republicans are prepared go ahead with the sequester, and will not give him the new revenue he craves, he will have to work with Republicans to make the cuts more rational. Republicans should, of course, cooperate; this would be one time in which the two parties actually have some common ground. But Republicans should insist that the total amount cut through the sequester — $1.2 trillion — stays the same.

If Politico is right, House Republicans are prepared to do so.

As for the debt-ceiling and the continuing resolution, I think Republicans should kick those cans down the road a few months and play only their potentially winning hand on the sequester. However, if Obama changes his mind and is willing to talk about some entitlement reform in exchange for raising the debt limit, Republicans should see what he has to offer and proceed accordingly.

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