A statement from the Speaker:
Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase.
It does appear we are at an impasse – Democrats won’t go for a major package without tax hikes, while we can’t accept tax hikes. Unless there was a cave-in by the GOP, this is pretty much what I expected.
Of course, it would be better if we didn’t agree to any increase in the debt limit – there would be scare stories aplenty if that happened and the markets would at least temporarily tank…but as the markets are due to tank, anyway, the actual economic effect would be minimal. And I do believe that as on the morrow of no new debt the world did not end, people would shrug off the event and any hit we took in the polls would be short-lived – and the long term payoff would be immense as the people would absolutely trust us on the matter of the budget.
But, we don’t quite have that sort of Congress, yet. We’ll have to work for one in 2012 – meanwhile, a mini-deal which actually cuts spending will be good for the country and good for us…and we can carry the fight in to next year, with the Democrats having to defend Big Government while we defend freedom.
Now, if we could only get the GOP leadership to make it a fight against Big Government and Big Corporation and really hang the rotten system on the Democrats, that would be wonderful…