Debt ceiling postures and pretense

A wheelbarrow of money to buy a loaf of bread. This is what Obama, with his fiscal cliff plan, threatens us with.
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Barack H. Obama pretends to be reasonable about the national debt and debt ceiling. Last night the pretense failed.

Dueling debt ceiling news conferences

Barack Obama, time to set debt ceiling priorities

As we have asked before: what priorities does Barack Obama have in the debt ceiling debate?

The man now holding office as President called a news conference after House Speaker John Boehner (R-OH) broke off talks for raising the debt ceiling. Several times during his opening speech, Obama said that he was not interested in pointing fingers or laying blame. Whenever anyone says that, especially more than once, he usually does not mean it. Obama proved no different. He blamed Republicans for not being able to say “Yes.” He blamed Boehner in particular for not “get[ting] control of his caucus.” In short, he sounded like an angry judge telling a divorce lawyer to get control of his client.

Boehner didn’t appreciate that. An hour and fifteen minutes later, Boehner accused Obama of bait-and-switch. Boehner had agreed to raising $800 billion in new revenues. Obama wanted $1.2 trillion. Boehner knew that only a massive tax increase could raise that. He also knew that the American public, who nearly jammed the Capitol switchboard and e-mail servers with protest calls and messages, would never accept that. (Whether John Boehner would accept that, if he had his way, is anyone’s guess. William Kristol seems to think that he wouldn’t. Other activists are more skeptical.)

The best thing that Democrats do is tax

Taxes, of course, are the Democrats’ favorite tool. From Senate Democratic Floor Leader Harry W. Reid (D-NV) to House Democratic Whip Steny Hoyer (D-MD), the message is the same. Without the power to tax, they cannot do their favorite social engineering. They know it. And that’s what they complain about. So when Hoyer says that the Republicans want to “permanently enshrine their own partisan budget priorities in law,” he really means that curtailing the taxing power would destroy the Democrats’ partisan budget priorities.

What would really happen to Social Security?

Social Security is a special case, though Obama pretends that it isn’t. It has $2.4 trillion in special government bonds in its “trust fund.” If Social Security cashes any of those in, the government isn’t borrowing that money anymore and may freely borrow it from somewhere else, debt ceiling rise or no.

The problem, then, is that the Social Security taxes might not cover current checks completely. But Obama has no excuse for not cutting those checks on time. As Thomas Saving said in this morning’s Wall Street Journal, Obama must want to spend that money on something else.

Sadly, the law allows him to do that. In Helvering v. Davis (301 US 619, May 5, 1937), the Supreme Court held that the Social Security tax system was constitutional because the law does not dictate where the government can spend the money. That’s another pretense that Obama seems to have dropped: the idea that Social Security taxes go to support Social Security and only Social Security.

Where do we go from here?

In about an hour, yet another White House meeting will take place. Most observers do not expect the two sides to agree. So the debt ceiling might not rise after all.

Featured image: the classic Weimar-era illustration of wheeling a barrow full of money to buy a loaf of bread.


Note: CBS News disabled embeds on their video of the Obama news conference.