The Telegraph
When it comes to the debt talks, Obama is no Bill Clinton
By Tim Stanley
It feels like history is repeating itself. In 1995, Bill Clinton was locked in negotiations with a Republican congress over how to reduce America’s spiralling deficit. They demanded big slashes in spending and taxes; he proposed smaller cuts in spending and none at all in taxes. Sixteen years later and another Democratic president is facing down another Republican bid to slash the debt with a package of savage cuts that he just can’t accept. So what are the similarities between the crises and what are differences? And what do the experiences of 1995 prophesy about the political outcome of the 2011 battle?
The similarities are so strong that it’s tempting to call Obama “Clinton With Ethics”. In 1995, the Republicans had been handed control of Congress thanks to a conservative sweep in the 1994 midterm elections. The base wanted the GOP leadership to deconstruct the welfare state. Clinton found that morally unacceptable and offered a modest package of cuts instead. A game of chicken ensued as the country edged towards default. Neither side could give way: Clinton faced the wrath of his party if he caved in to Republican demands, while Republicans could expect primary challenges by more conservative candidates if they didn’t get spending and taxes down to 18th century levels.
Perhaps the parallels are big enough to have convinced Obama to borrow Clinton’s negotiating strategy. Like Obama today, Clinton tried to triangulate his way out of the problem. He started by doing an ideological 180 and endorsed the message of the midterms that trounced his party. He declared that “the era of big government is over” and offered a debt-reduction package that stole the Republicans’ best ideas. But Clinton drew the line at cutting entitlements for the vulnerable. It redefined the battle as compassionate conservatism vs tight-fisted fundamentalism. It worked. The Republicans appeared to be the nasty party. When they eventually caved, they looked spineless too. The GOP’s presidential candidate, Senate Majority Leader Bob Dole, was tarred by the whole affair and Clinton sailed to re-election in 1996.
But if Obama is copying that strategy by offering to negotiate on cuts but hold firm on social spending and tax increases, here’s his problem: this isn’t 1995 and he ain’t Bill Clinton. In 1995, thanks to Clinton’s wholesale theft of Republican fiscal and trade policy, the country was out of recession and unemployment was low. The underlying issue that year was how to share the proceeds of growth: expand services or shrink government and return the money to the people. The deficit was a totem in a standard partisan debate. Today, the deficit is a very real, very big problem that goes beyond party politics. How America deals with its mounting debt will affect business confidence, external investment, Chinese foreign policy, the solvency of Social Security, and the price of basic goods. America’s entire future as a world power is at stake. Government shutdown in 1995 meant that services were suspended and a few driving test examiners didn’t get their daily fix of failing people. Shutdown or default today could extend the recession for another 12 months. With unemployment already at 9.2 per cent (it was averaged just 5.6 per cent in 1995), that’s a risk that isn’t worth playing chicken over. Even Bill Clinton understands that, which is why he’s called for corporation taxes to be cut.
Nor does Obama have Clinton’s charm – his remarkable ability to shoot a man square in the chest and then convince a hundred witnesses that it was suicide. There have been many different Clintons – the liberal, the conservative, the party lover, the devoted husband. Bill’s brilliance lies in his ability to inhabit each role totally, to believe that he is the part he is playing. In 1995, he masterfully turned himself into a conservative with a heart and the public bought it. In contrast, Obama (more a lecturer than an actor) has already stacked up a record as a big spender. It defines him: he is nothing unless he is superhero who bailed out the ghetto and brought health insurance to the needy. Without tangible social benefits, he’s just another Democratic turncoat travelling the country handing out false hope. Obama lacks Clinton’s ability to convince everyone that he is all things at once. It is his strength and his liability: the key to his re-election lies in convincing his hungry coalition that he’s remained faithful, not wooing big business.
The budget battle of 1995 discredited the Republicans and re-elected a Democratic president. This time, it could do the opposite. The economy is in such a shambles that the GOP has no need to fear looking ruthless: most voters understand that a bit of ruthlessness is required to kick-start the market. This time around, it’s the Democrat incumbent who can’t afford to crumble and who will be ridiculed if he does. Yet he must. In the time that it took to write this article, America’s debt went up by 150 million dollars.
http://blogs.telegraph.co.uk/news/timstanley/100096412/when-it-comes-to-the-debt-talks-barack-obama-is-no-bill-clinton/
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