Obama Blames Republicans for Compromise Failure

Following the failure of the U.S. Commission for Deficit Reduction to reach a compromise, it has come down to mutual recriminations. Meanwhile, time is running out for the nation.

The United States recently surpassed the unimaginable $15 trillion debt mark. That’s more than 100 percent of GDP. Nevertheless, the government was able to sell the idea that the euro crisis alone was the greatest threat to the global economy. But that may now change as this Thanksgiving week saw the re-emergence of the threat of yet another downgrade of U.S. creditworthiness.

The commission, composed of six Democrats and six Republicans, announced on Monday that they had failed to find a compromise for debt reduction.

After narrowly avoiding a declaration of bankruptcy last August, they decided there had to be consensus on the conditions for again raising the statutory national debt limit. But both sides were unable to reach a compromise, a fact now confirmed by an increasing number of leading politicians.

Now it’s all about the blame game. Nearly all Republicans agree that the debt should be reduced solely through reduced spending and that tax increases were out of the question. Most Democrats want to avoid cuts in social spending by raising taxes on the richest Americans. In Washington on Monday, President Obama accused Republicans of refusing to compromise, saying there were “still too many Republicans in Congress who have refused to listen to the voices of reason.”

Following simple mathematical rules, the ideologically driven solutions don’t work. Likewise, waiting for an improving economy that would flood the government coffers with more revenue — a hope both sides still cling to — won’t solve all of America’s problems either. It will be necessary to have all three in concert: higher taxes, lower expenditures and programs to boost the economy, principally the removal of unnecessary regulatory hurdles.

Since the start of the economic collapse following the financial meltdown, the government has been taking in only $2.4 trillion but has been spending $3.6 trillion annually. One-third of the current budget has therefore relied on borrowed money. Income just covers the three major expenditure areas of Social Security, Medicare and defense. There’s little that President Obama can do to change that fact, because budgetary matters are the responsibility of Congress. But Congress threw in the towel and kicked the can down the road past the 2013 elections. Meanwhile, the mountain of debt keeps right on growing.