Obama's Real Fiscal Problem

[WestVirginiaRebel]

Wall Street Journal:

President Obama is by all accounts more confident than ever since his re-election, telling everyone he sees that he's certain he can pound Republicans enough to get his way on taxes and spending. And if he can't, well, then he can always go over the fiscal cliff and blame Republicans next year for whatever happens to the economy.

And maybe he's right. If nothing else, he's been expert at dodging responsibility. The line he's taking so far in budget negotiations could hardly be tougher. House Speaker John Boehner was decidedly downbeat Thursday after a phone call with the President Wednesday night and a Thursday meeting on Capitol Hill with Treasury Secretary Tim Geithner and White House aide Ron Nabors.

Our GOP sources say the President is insisting on about $1 trillion in new tax revenues immediately by raising tax rates, plus another $600 billion in net new revenue as part of tax reform next year. He also wants $150 billion in new public works "stimulus" spending, $50 billion of it next year, and another extension in unemployment benefits (one year cost: $30 billion).

In return, Mr. Obama will only promise some $400 billion in entitlement savings next year, details to come later. Keep in mind this negotiation is supposed to reduce the deficit. We're told Mr. Geithner also demanded a permanent increase in the debt limit, meaning that no future action would be required to raise it again. There's more, or shall we say less, but you get the idea. As one senior Republican told us, "This was almost insulting."

This doesn't come close to an offer that Mr. Boehner can accept, not least because it couldn't get through the House, and maybe not even the Senate. If Mr. Obama really does want to force the GOP over the cliff, he's well on the way to doing it.

But if we may offer the President some friendly advice, his real challenge in a second term isn't the Republicans. He's beaten them like the Washington Wizards. His real problem is illustrated by the nearby table. It's his economic growth deficit.

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Obama is his own worst enemy.