Morning Examiner: Why Obama rejected a short-term debt deal

President Obama insisted yesterday that Congress reach a long-term budget deal, not a short-term “quick-fix” that could put the debt ceiling debt smack in the middle of the 2012 campaign next year. This is a major shift. Since January, the Obama administration has been calling for a “clean” debt limit hike to avoid economic “catastrophe.” As recently as two weeks ago the White House signaled they were open to a short-term deal. Now Obama’s position is that the deal must include reforms for Medicare, Medicaid and taxes, all to be completed by July 22. Why the monumental shift in position?

Obama wants to minimize how often Republicans in Congress can ask for spending cuts and maximize his own opportunities to seek tax hikes aka “revenue.” Obama has been asking for a $2.4 trillion debt hike that would allow enough deficit spending to last into 2013. That would be after the Bush tax cuts expire in 2012. If Obama gets a deal that locks Republicans into to a couple trillion in long-term spending cuts now, then he is free to push for trillions in tax hikes when the debate shifts to extending the Bush tax rates later in 2012. That gives Obama two bites at the tax hiking apple: He’ll except some tiny tax hikes now, paired with a couple trillion in spending cuts, but then in 2012 he’ll push for $5 trillion in tax hikes by ending the Bush rates. Why any conservative would sign on to this deal escapes us.

Around the Bigs

The Washington Post, Obama calls lawmakers to White House in effort to break debt stalemate: Calling the debt limit deadline “a unique opportunity to do something big” Obama rejected any short-term debt limit deal yesterday, and invited lawmakers to the White House for talks Thursday.

The Washington Examiner editorial, Put budget negotiations on C-SPAN and let the sun shine in: For too long the White House has been allowed to play a game where they say one thing at the negotiation table, and then leak phantom “offers” for The New York Times to run on page one. Enough. The Examiner has a solution: “Let Senate and House leaders appoint their respective negotiators, then meet with Obama, with the C-SPAN cameras rolling, and keep on meeting until they reach an agreement.”

The Washington Examiner, Obama to field ‘tweets’ on jobs, economy: Obama will host a twitter town hall on live television tomorrow from the White House. Officials from twitter, not White House staff, will be choosing which questions to ask the president. You can watch the broadcast on the Twitter Blog, here.

The Wall Street Journal, For Small Businesses, Recession Isn’t Over: According to a recent U.S. Bancorp survey, 78 percent of small businesses say the economy is still in recession and 70 percent have no plans to expand their staffs over the next 12 months. Respondents told Bancorp that “economic uncertainty and inflationary pressures” have caused them to delay hiring and expansion.

The Hill, States lag in implementing health insurance exchanges: Only ten states have signed laws that establish health insurance exchanges required by Obamacare. In 2013, the Department of Health and Human Services will begin analyzing state programs to see if the feds need to step in and create an exchange on their own.

The New York Times, Better Lives for Mexicans Cut Allure of Going North: Citing data from Mexico showing as many as 4 million Mexicans have returned from the United States, The Times claims “economic, demographic and social changes in Mexico are suppressing illegal immigration as much as the poor economy or legal crackdowns in the United States.” Any admission by The Times that immigration enforcement works is a huge victory for sovereignty and the rule of law in the United States.

The Los Angeles Times, California pays more than 1,400 workers in excess of $200,000: Thanks to union contracts offering generous unused vacation and sick time payments, hundreds of California government employees are making more than $200,000.

Campaign 2012
New Hampshire: WMUR released its latest Granite State Poll conducted by the University of New Hampshire Survey Center yesterday. Former Massachusetts Gov. Mitt Romney still holds a commanding lead with 35 percent of respondents naming him as their first choice.

Rep. Michele Bachmann, R-Minn, trailed at 12 percent followed by Rep. Ron Paul, R-Texas, at 7 percent. Undeclared Texas Gov. Rick Perry beat out both former-Minnesota Gov. Tim Pawlenty and former-Utah Gov. Jon Huntsman. Four percent of respondents chose Perry while only 3 percent chose Pawlenty or Huntsman.

Pawlenty: Former Minnesota Gov. Tim Pawlenty earns a front page Wall Street Journal profile under the header Pawlenty’s Homespun Tale. The Journal notes “he’d be the first president who had never lived outside his home state” and reports that Pawlenty “plans to double down on this homespun narrative in a burst of campaigning starting Wednesday in Iowa.” Part of that “doubling down” included an announcement Tuesday that Sarah Huckabee, daughter of 2008 Iowa Caucus winner Mike Huckabee, will be campaigning with Pawlenty in the state. The more resources Pawlenty puts into Iowa, the bigger the stakes for him at next month’s Ames Straw Poll.

Gingrich: Former Speaker Newt Gingrich raised just $2 million in the second quarter this year and his campaign is still over a million dollars in debt.

Perry: The New York Times reports on the “long simmering rivalry” between Texas Gov. Rick Perry and former President George Bush. The Times notes that Perry has accused Bush of going on “a big-government binge” and has downplayed Bush’s accomplishments in Texas. Any distance Perry can place between himself and Bush only helps his chances in the GOP primary. The Times seems intent on helping Perry … for now.

Righty playbook

  • In the City Journal, Steven Malanga explains how The Compensation Monster Devouring Cities, reporting: “In the typical city, town, or school district, by contrast, compensation costs generally range from 70 to 80 percent of the budget.”
  • Power Line‘s John Hindeaker posts an email from an expert in the energy field criticizing Obama’s recent use of the Strategic Petroleum Reserve. His source writes: “The SPR’s release of 30 million barrels of oil was sold to oil refiners and traders at more than $10/bbl BELOW market. Can the US taxpayer afford the $300mm subsidy? Does the public know that prices are the same now, less than two weeks since the SPR announcement? Was this money well spent?”

Lefty playbook:

  • The Nation’s Katrina vanden Heuvel joins the chorus of liberal activists calling on Obama to invoke the 14th Amendment and ignore the debt ceiling. In The Washington Post, she writes: “President Obama should commit to exercising this obligation — as a last resort. And he should commit publicly, as soon as possible. Doing so will give him the leverage he lacks in the debt-ceiling negotiations.”
  • Talking Points Memo is now attacking Rep. Michele Bachmann, R-Minn., for being a foster parent. They claim she has cut funding for “vulnerable youngsters” and has been “AWOL” on foster care policy.

Beltway Confidentialmorning examinerUS

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