President Obama has boxed himself into a corner.  It was Obama who announced the August 2 sky is falling deadline.  He is the one who says the government will default if the debt ceiling is not raised.  But, he has done nothing.  He has proposed nothing.  Democrats have done nothing.  Democrats have proposed nothing. 

There is only one piece of legislation available to raise the debt ceiling.  That is the Republican’s Cut, Cap and Balance legislation.  The so-called bi-partisan gang of six proposal means nothing because it is a five page summary of a plan, a long way from being a piece of legislation.  The bottom line is that either Republicans cave and throw in some tax revenue to make Obama look good, or he has only bad options.

Obama admitted today that he cannot just raise the debt ceiling arbitrarily.  His lawyers told him that.  I am sure that behind closed doors the attorneys for Republicans not only told him that, they told him they would impeach him if he tried.  At least one Republican said that publicly.  Bill Clinton advised Obama to do that, but perhaps he just wants company on the “Presidents who have been impeached” list.

If Obama ignores the August 2 deadline it will be obvious that he was using scare tactics to try and get his agenda passed.  On the other hand, if he does not pay our debt, stops sending out social security checks, Medicare checks, veterans checks,  or stops paying our troops, there will be widespread outrage.  Republicans will quickly point out that there is more than enough revenue to do all of the above.  In addition, the constitution REQUIRES him to pay our debt.  I think one could make an argument that the definition of items required to be paid under the constitution includes all of the above.  It would be a violation of the constitution for Obama to default on our debt.

 What Obama will have to do, if the Republican legislation is not passed, or they do not throw him a financial bone, is start shutting down parts of the government.  He will have to send government workers home.  Or, he will do what California Governors had done which is to start sending out IOU’s. 

Obama has to be desperate and will probably agree to almost any deal to raise the debt limit, even for a few days, to buy himself more time.  I sure hope Republicans stand firm behind their current plan.  At a minimum, they should demand that Obama produce his plan with specific cuts.  Since he has no plan, that will be very hard for him to do.   If Republicans hold their ground, the President can scream and holler to the heavens, but he has very few options and all of them are bad.

 Cut, Cap and Balance was tabled by the Senate.  The vote was 54 to 46.  But I wouldn’t rule out seeing some Democrats switch over and support this legislation.  It only takes 5 more votes to pass.  If it does pass, I don’t see how Obama could veto it under the circumstances.

 Republicans could still fold, that has been their pattern, but right now it is Obama who has boxed himself in a corner.

TDM