Trying to survive the political storm around them, Democrats would postpone the toughest decisions until after November’s elections, when a presidential fiscal commission is scheduled to make its report to Congress. But there is no escaping the political bind that grips the party, exhausted from the debate over health care reform and under political pressure to extend Bush-era tax cuts.Politico adds this feel-good bit to soften the damage:
Health care ate up most of the available Medicare savings and popular tax offsets that might otherwise be tapped to narrow the deficit. And as a result, it’s harder to dig out of the deficit hole, and little progress will be made in the short term absent a further surge in the economy.
The administration may be hoping for this. Economic adviser Larry Summers was almost heady Wednesday, posting his own White House blog celebrating the turnaround in the auto industry and early repayment by GM of some of its loans. But the stubbornly growing debt is a problem, even as Democrats appear frozen in place.Too bad it is all hocus pocus:
New Chevy Kabuki: I like Larry Summers, but does he really think GM repaying $6.7 of the over $50 billion the taxpayers have sunk into it means there is a significant chance for "a return of most of the taxpayers’ investment in these companies"? The $6.7 billion "payback" seems like an obvious PR move designed to disguise GM's ongoing trouble, even as the Obama administration moves to sell its stake for a gigantic loss. ... Truth About Cars' Edward Niedermeyer explained all this back in November. ... If Obama had really made the "politically difficult" decision and forced the UAW to take even a mild cut in hourly wages, the story might be different, of course. ...The loans were reported to have been paid back with TARP funds, enjoy those ads that are all over television.
EDIT: More on the TARP shell game posted at Potluck.