- The Washington Times - Tuesday, August 2, 2011

The air was thick with bombastic predictions throughout the months-long battle over raising the debt ceiling. A deal appeared impossible, and pundits were predicting the divided Republicans and Tea Party insurgents who had ignited the budget-cutting revolution would be the political losers.

But in the final moments, there was a deal that dodged defaulting on our debts - largely the work of Senate Republican Leader Mitch McConnell in an ice-breaking, face-to-face White House meeting with President Obama. The vote in the House, the chief hurdle in the fiscal fight, wasn’t even close: 269-161. Not only did a substantial majority of Republicans (174) support the compromise, but half the Democrats did, too. The Democratic-run Senate passed it Tuesday by a vote of 74-26.

As it turned out, House Democrats were much more divided than the GOP, with 95 voting yes and 95 voting no, mirroring deepening divisions within their party’s angry liberal base who think Mr. Obama sold them out once again. Even the liberal Washington Post reported that in the final, down-to-the-wire deal-making, the president “blinked.”

Republicans pushed for deeper spending cuts right to the end, sensing that a politically weakened Mr. Obama was fighting a rear-guard action as the final days of the battle played out. But seasoned budget analysts knew the fight was all but over.

“The Republicans won, and they don’t know how to accept victory,” said Robert D. Reischauer, the former Congressional Budget Office director, to the New York Times at the end of last week.

As to who ended up with the better deal, Mr. Obama and his party were the clear losers. The president originally had demanded a clean debt-ceiling increase with no budget cuts but eventually was forced to accept as much as $2.5 trillion in spending cuts to offset the increased debt over the next two years.

He also lost big time on his chief demand: that the deal must include tax increases on big corporations and anyone who makes more than $200,000 a year. No tax increases are in this agreement - at least not yet.

Just a few months ago, it appeared the Republicans were on the ropes, getting battered by the Democrats for threatening to block any debit-limit increase and for their proposed Medicare reforms to replace the medical care program for future seniors with a voucher plan.

Now the Democrats are the ones on the ropes, with an economy that has virtually stopped growing and is tilting dangerously close to a double-dip recession amid forecasts that we will be saddled with high unemployment in the 9 percent to 10 percent range for the remainder of Mr. Obama’s term.

The president’s surrender in the debt-ceiling battle was the latest in a long line of cave-ins in the face of stiff Republican opposition. He caved in December on extending all of the George W. Bush tax cuts. He threw in the towel when the GOP threatened to shut down the government if it did not extract additional budget cuts. And now his concessions on the debt-ceiling.

“Maybe it’s just me, but I see a pattern here,” groused liberal New York Times economic columnist Paul Krugman, who is one of the president’s fiercest critics on the left.

“It is, of course, a political catastrophe for Democrats, who just a few weeks ago seemed to have Republicans on the run over their plan to dismantle Medicare; now Mr. Obama has thrown all that away,” Mr. Krugman wrote Sunday.

The Republicans didn’t get all of what they wanted, either, in the final budget negotiations, but they managed to extract probably as much as they could in this round - though there will be many more rounds to come.

“Did we get 100 percent of the discretionary cuts we were looking for? No; we got two-thirds” of what House Republicans had sought in their fiscal 2012 budget plan, said Budget Committee Chairman Paul Ryan of Wisconsin.

But this deal still leaves a mountain of entitlement debt ahead of us that is only going to grow exponentially in the next 10 years if Congress does not reform Social Security, Medicare and Medicaid. The special, bipartisan, 12-member panel that this week’s legislation creates may tackle Medicare, but that remains to be seen.

And it’s important to remember that this budget-cutting deal is not written in stone. A new Congress can repeal or change any part of it and make deeper and more sweeping cuts in the years ahead. This agreement does not end the power of appropriations committees.

The Republicans clearly won this round in the continuing battle of the budget, even with the Democrats tenuously holding the White House and controlling the Senate with a vulnerable four-seat margin.

But with Mr. Obama’s economy on the brink of another recession, his job-approval scores stuck in the low 40s, and a bleak jobs situation facing us this year and next, the political landscape clearly favors the GOP in 2012.

Donald Lambro is a syndicated columnist and former chief political correspondent for The Washington Times.

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