ANALYSIS: Bin Laden death boosts Obama, but budget headaches loom

By Pat Reber May 6, 2011, 1:29 GMT

Washington - There's little doubt that the killing of the world's most hunted terrorist has burnished US President Barack Obama's national security credentials.

The bold raid early Monday in Pakistan that killed Osama bin Laden - hailed as the biggest US national security victory in a decade - answered doubters who have criticized Obama's foreign policy, and most recently his restrained response in Libya and the rest of the Middle East.

It boosted his foreign policy approval ratings by 8 to 9 per cent, according to various polls released this week. It even put the president in a positive approval range of 51.5 per cent, compared to the 45.9 per cent right before the raid, according to an average of national polls compiled by website RealClearPolitcs.com.

But by Thursday, it was back to the domestic reality of hard budget and debt negotiations in Washington, the outcome of which will likely have a greater effect on Obama's political future than the bin Laden triumph.

There is overriding public disappointment in Obama's economic performance, an issue that is likely to dominate the 2012 election campaign. The Quinnipiac University poll released Thursday showed the president's approval on the economy had barely budged, from 37 to 38 per cent.

High petrol prices, lingering high unemployment and towering national debt have provided ammunition for right-leaning Republicans who control the lower House of Representatives and are determined to force cuts not only in government operations but also in entitlement programmes such as those for old-age pensions and medical care for the elderly and poor.

Obama and his left-leaning Democrats are arguing for some cuts but more importantly, for cancellation of tax breaks for the rich granted under president George W Bush, when there was still a budget surplus, before two wars and severe recession eroded the treasury.

On May 16, the government is expected to reach its debt ceiling of 14.3 trillion dollars. Congress nearly every year approves a higher limit so the government can keep borrowing to pay its creditors, but this year is different.

While the 'sense of national unity' that Obama referred to in his Sunday announcement of the bin Laden raid 'may resurface again for a few days, there is little national unity about whether to raise the debt ceiling, to raise taxes on people earning over 250,000 dollars a year or to curtail entitlements,' wrote Stuart Rothenberg at the political newspaper Roll Call.

'The bump in the polls ... is likely to be short lived,' he added.

Treasury Secretary Geithner is trying to buy some time until early August with a series of extraordinary measures that include spending 100 billion dollars in cash kept at the Federal Reserve, suspending 232 billion dollars in special borrowing and other steps.

All told, the government needs 125 billion dollars a month to pay its bills, according to The Washington Post.

On Thursday, Vice President Joe Biden launched negotiations between the two sides, voicing optimism and saying 'we made progress.' The meetings are slated to continue over the coming weeks.

There was some sense of reconciliation in Washington's bitter, highly polarized atmosphere. House budget committee chairman Paul Ryan signalled that he does not expect 'a grand slam' deficit-cutting agreement that would tackle entitlements like old age health care before Congress votes to raise the debt limit.

The fact that the two sides were talking was considered major progress.

The New York Times greeted the news that bin Laden was killed as a way of purging the atmosphere of many of the personality-based attacks waged by Republicans against Obama.

'President Obama's display of leadership in directing the killing of Osama bin Laden raises the prospect that American politics can move away from mindless debates over the president's loyalties and fortitude,' it wrote on Wednesday.

'Perhaps the 2012 campaign might even shift to real issues, like the economy and the major parties' competing visions of government's role.'

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