Obama's fiscal tightrope

President Obama walks a thin line as he tries to negotiate a deal to raise the national debt limit and tax revenues.Congressional Republicans are using the effort to showcase what they believe are needed cuts in spending. The White House seeks to negotiate a settlement that both raises taxes and the debt ceiling while cutting spending and keeping voters happy.

LOS ANGELES (Catholic Online) - Big spending cuts are already conceded but neither side can agree on where to make them. Democrats would like to end overseas conflicts and cut defense spending while Republicans are targeting social programs they feel are unnecessary.   In any case, billions ins pending cuts will happen, both parties agree.

The sticking point are taxes and entitlements. While Democrats claim to want to reduce subsidies, close tax loopholes and entitlements, the Republicans are resisting anything that they perceive as a tax increase. Furthermore, President Obama does not want to give the Republicans any ammunition in next year's campaign by being seen as raising taxes.

The impasse over tax increases is unlikely to be resolved until the last minute. Neither side wants to see a default, so the debt ceiling will almost certainly be raised, but analysts predict the negotiations will continue until the last minute.  What remains beyond that deal is just how each side will construe the agreement to their advantage.  

Many have called on President Obama to present to the American people a thoughtful and well considered plan to balance the budget. President Obama is widely viewed as having deferred to congress on many issues which has led to criticism that his leadership is weak.

As the negotiations over the debt ceiling approach their August climax, President Obama must choose his stance and words very carefully if he is to be seen as a genuine leader and avoid alienating voters who will remember what happens now in 2012.

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