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Democrats, Republicans Reach A Tentative Debt Ceiling Agreement

President's Call to Inaction To Be Withdrawn

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.

The great American engine of democracy is beginning to build up a head of steam, and it remains the finest device created by man to organize collective human action.

Two months ago, the conventional wisdom held that Washington would do nothing of consequence to start dealing with our fiscal crisis. Certainly, that was the political baseline for the president's Feb. 14 budget proposal for 2012, which, while roundly condemned as a call to inaction, was seen as politically "shrewd."

Then, about a month ago the Republican-led House of Representatives passed $61 billion in budget cuts for the remainder of the 2011 budget -- as the Democratic Party-controlled Congress had failed to pass any budget while they were in majority last year.

That action produced a new conventional wisdom -- that the GOP effort to make some cuts in the 2011 budget would lead to "civil war" between GOP leadership and the tea party faction -- and risked being condemned by the public for implicitly threatening to shut the government down.

Then about a fortnight ago, GOP Budget Committee Chairman Paul Ryan produced a proposed budget for 2012 that would reorganize and trim Medicare and Medicaid programs, otherwise bring federal spending back to its historic 20 percent of GDP level, reduce tax rates and loopholes (while keeping revenue neutral) and bring the budget into balance by 2040.

This assured most tea party freshmen that the GOP leadership was serious about deficit reduction and brought out the predictable Democratic Party response: The GOP wanted to cause cancer in women, "kill" women and the elderly and generally impose barbaric morals on a helpless public. Then conventional wisdom declaimed that Ryan was an honorable idealist -- but he was leading the GOP to political suicide.

However, over the last weekend, Speaker Boehner successfully negotiated a $40 billion spending cut for the remainder of 2011, civil war did not break out in the GOP and within hours, the White House suddenly announced that after all, the president would announce -- by this Wednesday -- his plans to deal with the deficit by, among other things, curbing entitlement costs.

Steady leadership by Boehner and the House GOP, powered by a growingly alert public, has turned the president of the United States' stated deficit reduction policy objective 180 degrees in two months. And this from a president who the Washington political and journalistic wizards have been proclaiming to be almost certain to be re-elected.

Well, no president who is confident of re-election chooses to embarrass himself by so conspicuously reversing himself on the central domestic issue of his time within two months -- unless he fears a new mood among the voters.

I don't know what new Washington conventional wisdom the network pretty parrots will be reciting Thursday morning after the president's remarks, but let me offer a broad assessment of the fast-emerging debt and deficit reduction fight strategies.

The GOP has bet the farm that the American public will more likely punish them for inaction than action. Good. The president seems to have come to the same conclusion regarding his chances with the 2012 electorate. So a fight over something that looks like real legislative action on the deficit crisis is going to be joined by the two parties.

But the nature of the Democratic Party's coalition for power must drive it to protect the excessive spending "at all cost." The Democratic Party coalition since FDR has been premised on the concept "tax and tax, spend and spend, elect and elect." The phrase was first reported in The New York Times by reporter Arthur Krock in 1938, allegedly as a quote from President Franklin D. Roosevelt's closest adviser Harry Hopkins. Hopkins denied saying it at the time, but it encapsulated the Democratic Party's successful method of getting elected by taxing the rich and upper-middle class, spending on the poorer public and thereby getting re-elected by that public.

If the Democratic Party gives up the vast spending that is driving the nation to fiscal catastrophe, they undermine their ability to win elections as a national political party. They will fight for years to prevent such a spending "drought."

But as it has suddenly become clear to the president and his strategists that they cannot be seen to be on the sidelines, they will have to offer what may seem like a plausible solution.

But even confiscating all the income of the rich cannot sufficiently fund the reduction in deficits. Nor can slight-of-hand waste, fraud and abuse savings in the entitlements cover the gap. Ultimately, the Democrats either will not in fact deal with the deficit or they will have to do so by very highly taxing the middle class (either way, they want to keep spending, but they will try to hide those alternative realities).

Thus the upcoming challenge for the Republicans will be less to persuade the country that entitlement reform is necessary (as the president will admit that) and more to: 1) unmask the true nature of the Democrats' purported proposals, 2) convince the country that a high-tax solution to the deficit threat will result in low economic growth and 3) convince the country the GOP low-tax solution will sustain the needed social safety net while inducing higher economic growth necessary to our future prosperity.

Politics is about to get much uglier -- but possibly more productive.

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