I have been making predictions long enough to know that I am not any good at it. The first time I heard rap music a little more than 30 years ago, I said, “That will last about six months.” When the Nikkei 225 dropped from just under 39,000 in 1989 to around 16,000 in 1993, I said, “This is the bottom,” and I promptly loaded up on Japanese stocks, figuring there was nowhere to go but up. I figured wrong. In 1974, when the Symbionese Liberation Army demanded that the Hearst family distribute food to the poor as ransom for Patty Hearst, the inept operation resulted in a riot. The picture in the newspaper showed lots of poor black people fighting one another to get the food. So when Governor Ronald Reagan quipped, “It’s just too bad we can’t have an epidemic of botulism,” I said to myself, “He will never get to be president now.”
This much having been admitted, I now wish to discuss the upcoming fight over the debt ceiling. We have Obama’s word that he will not negotiate over this issue. But what is that worth? He makes promises, and then does not keep them. He makes threats, and then backs down. He acts as though he has a pat hand, and then gets caught running a bluff. Why should we believe him now? More importantly, why should the Republicans? They have every reason to think that they can get him to compromise over the debt ceiling increase. Why would they not act accordingly?
Just why raising the debt ceiling is a favor to Democrats, who must give something in exchange, is a presumption that has never been justified. But since Obama conceded the point the last time around, it is too late to contest it now. Of course, this did not happen by chance. During the first debt ceiling fight, Obama thought he had an opportunity to pull a fast one, to get what he has always wanted by making it appear as a concession. He called it a Grand Bargain.
Although Obama swore he would never cut the cost-of-living adjustments for Social Security during the 2008 campaign, he has been trying to do just that since he took office. He would be perfectly happy to implement the chained CPI for Social Security COLAs as a stand-alone bill, proudly signing it with dozens of pens in a Rose Garden ceremony, but he knows he could never get away with that. He needs the cover of a compromise. There must be the appearance that it has been extracted from him during tough negotiations with the Republicans. And so he offers it up as a bargaining chip every chance he gets.
Much to his chagrin, the Republicans have been unwilling play along. All Obama wanted was just a little tax increase, just enough for a fig leaf, so he could say he had to do it for the sake of fiscal responsibility, but Republican recalcitrance saved the day. Despite repeated failures, hope is one of Obama’s vices, so it is unlikely he has given up. The upcoming debt ceiling fight is his next best chance to cut Social Security, and possibly his last.
I admit there has not been one word of entitlement cuts in the last few weeks. All we have been hearing is that the fight will be over Obamacare. But it was not too long ago that Mitch McConnell and John Boehner were saying that they would insist on entitlement reform when the time came to raise the debt ceiling, and chained CPI is in Obama’s budget, after all. The stage is all set for a compromise: the Republicans will give up their objections to the Affordable Care Act and allow the debt ceiling to be raised, in exchange for cuts to Social Security. Therefore, I predict that Obama will offer chained CPI at some point in his negotiations with Republicans over the debt limit.
I only said my predictions were not any good. I didn’t say I was wise enough to quit making them.