Final Act in Debt Ceiling Melodrama Unfolds

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Final Act in Debt Ceiling Melodrama Unfolds

Rick Moran

As John Boehner gives Obama the cold shoulder on debt negotiations, the president is preparing the ground for a full court "blame Republicans before me" press, believing that he holds the upper hand if there is no deal in place by the end of next week.

In fact, Obama holds most of the cards. He and Treasury Secretary Geithner will be able to manipulate the situation so that any budget cuts forced on the government because the debt ceiling isn't raised will fall on people and programs that will bring maximum political impact in order to make the GOP look bad.

The government won't have to cut payments to old folks in wheelchairs. But Obama will make sure that it does - or some program equally heart tugging. It's the power of the presidency and Obama will play it for all that it's worth.

Wall Street Journal:

A debt downgrade, while not as serious as a default, could send interests rates higher and cause investors to panic. Mr. Obama raised that prospect Friday night in making the case for a larger deal.

"If we can't come up with a serious plan for actual deficit and debt reduction, and all we're doing is extending the debt ceiling for another six, seven, eight months, then the probabilities of downgrading U.S. credit are increased, and that will be an additional cloud over the economy and make it more difficult for us and more difficult for businesses to create jobs that the American people so desperately need," Mr. Obama said.

Mr. Obama also said as leaders work through the weekend, they should keep in mind that the stock markets will be opening Monday.

"Do as I say or granny gets it" may be a flippant way to describe Obama's approach. But the GOP won't be laughing when he actually pulls something like that on August 3.