StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



Was This The Best Day For The White House Since Bin Laden?

13 Feb 2012
Posted by Stan Collender

This was a big day for the Obama administration on the budget...and it had nothing to do with the budget it submitted to Congress.

What in the world were House Republicans thinking when they announced today that they had reversed themselves and agreed that spending cuts weren't needed to pay for the extension of the payroll tax cut that will expire at midnight on February 29?

There were two huge political implications for this beyond the dramatic flip-flop on the need for offsets, 

First, from a pure PR standpoint, the GOP stomped all over the story it wanted to get the media to cover about its opposition to the Obama 2013. That was trumped and then some by the GOP announcement .

The story of the day is now about how the GOP capitulated to the congressional Democrats' demands about the payroll tax cut extension, how this is a win for the president, etc.

Second, the GOP's agreement to extend the payroll tax cut without getting anything in return meant that it voluntarily gave up the only legislative leverage it was going to have until Election Day to get the White House to do something it doesn't otherwise want to do.

After all, the government is now funded through the end of the fiscal year so there will be no threatened shutdowns before October 1 (and it's hard to imagine that anyone will want to take responsibility for a shutdown a month before the election). And...the current debt ceiling isn't expected to have to be raised until a lame duck session of Congress at the earliest so there will be no federal cash shortage.

My guess is that the White House is ecstatic.

debt ceiling gambit?

will this bring us close to the debt ceiling before the election?




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