Here’s a cross section of reporting and blog commentary on the debt limit ceiling crisis, including the latest development: that with time quickly running out before the U.S. slips into a politically-derived default there are reports that a compromise may soon be at hand.
Here are the outlines of a debt-ceiling deal that congressional leaders and the Obama White House are firming up in preparation for a possible announcement as early as Sunday afternoon.
In many respects, the deal will, if approved by all parties, resemble the contours of a short-lived pact negotiated last weekend by House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev. Obama rejected that deal, forcing Congress to wrestle with other inferior legislative options throughout the week.
Among the newest wrinkles, according to informed sources, is an agreement to extend the current $14.3 trillion debt ceiling very briefly to give the legislative process time to work without resorting to emergency, hurry-up measures.
President Obama has said he would only sign a short-term extension (days, not weeks) if it were linked to an extension of borrowing authority that lasts beyond the 2012 election.
According to sources, the Senate would use the military construction appropriations bill, one currently available for action, as the vehicle for the short-term extension. This element of the arrangement, like everything else, is subject to modification. But those close to the negotiations expect Congress to slow things down without jeopardizing the nation’s full faith and credit. A debt extension of days would achieve that goal.
—The Christian Science Monitor:
One of the sticking points during the months of trying to resolve the looming debt crisis has been GOP lawmakers’ fears that they will accept a deal that promises spending cuts that subsequent Congresses fail to deliver – the fate of the Reagan tax hikes in 1982 and the Bush tax hikes in 1990.
Even if the White House and congressional leaders agree on a deal, the task of selling it to highly engaged rank-and-file members is a formidable one, on both sides of the aisle. A deal capable of mustering a bipartisan, 60-vote majority in the Democrat-controlled Senate must also clear a deeply divided GOP-controlled House….
….Feelings are also running high on the Democratic side. Members fear that the emerging plan will not stand strong enough on core Democratic principles, such as requiring shared sacrifice from the richest Americans.
—The Daily Beast’s Michael Tomsky:
Lots of smoke Saturday. Let’s cut right through it: In a phrase, President Obama appears to have cut a deal with the Republicans, on their terms, or about 98 percent of them. Democratic congressional leaders are trying to push back but are up against it, with Harry Reid having pushed the cloture vote on his plan back from 1 a.m. Sunday to 12 hours later as he scrambles to try to find the votes to pass his version of a compromise. Jonathan Karl of ABC News was the first to report the Obama-GOP deal as fact in this short piece that was posted at 10:39 p.m. Saturday night. If he’s right—and it smells like he is—it’s a bleak day for this presidency, and really in American history, as we’ve now embarked on a path that’s very likely to lead to huge cuts in entitlement programs, the domestic budget, and more or less everything every Democrat in Washington (except, apparently, one) wakes up to fight for every day…
…If you followed yesterday’s events hour-by-hour and have a little experience at negotiation yourself, you saw the signs as clear as day. When Mitch McConnell said—around 4 Saturday afternoon—that he had been talking with Obama and Joe Biden and the country will not default, he was really saying: We’ve cut the deal. Harry Reid and Nancy Pelosi were at the White House at the time, with Obama. Were the three of them—or the four of them, with Biden—figuring out their next counter-move, as one might expect? Maybe. But it appears more likely that Reid and Pelosi were getting their marching orders and being read the terms of surrender.
When Reid took to the Senate floor around an hour later to say that McConnell was wrong and a deal was not forthcoming, he was refusing to march. He gamely tried to say that the basis for a deal could still emerge from the Senate. It still could, in theory. If somehow he finds 60 votes to advance his compromise bill, he will suddenly have the upper hand. We’ll find out today.
But everything about their postures and inflections suggested that McConnell knew the deal was done, and Reid felt sideswiped by the White House. McConnell’s letter with the signatures of 43 Senate Republicans saying they wouldn’t support the deal, released earlier Saturday afternoon, was the key move. Until then, Democratic insiders had had the sense that McConnell was going to play ball with Reid and agree to a plan that would pass in the Senate with real bipartisan support, putting pressure on John Boehner to ditch his Tea Party faction and pass a deal with Democrats and more mainstream Republicans….
…Reid said a very interesting thing in his late afternoon floor statement. There have been 72 debt-ceiling votes since 1962, he said, and never before had one been threatened by a filibuster (which requires that the majority find 60 votes) until Saturday. Both parties engaged in the usual posturing but had always agreed that a simple majority could raise the ceiling. Until Saturday. This tells us just what extremists these Republicans are. But McConnell knew he could get away with it, because few Americans even know what cloture is—and, more important, because he predicted, apparently accurately, that this president would roll over. And so the GOP will have won, and won big. Obama can call this victory if he likes, and insofar as default will be avoided, sure. But if he thinks this is what his voters sent him to the White House to do, he needs a serious reality check.
—The New York Times’ Maureen Dowd:
Amid the chilling anarchy, there’s not a single strong leader to be seen — not even a misguided one. All the leaders are followers. You have to wonder if President Obama at some level doesn’t want to lead. Maybe he just wants to be loved.
The citizens of this country tremble at the thought that these are the people governing them. Should we stick our money under our mattresses? It’s not only the economy that gets nourished by confidence; it’s also politics.
…Democratic lawmakers worry that the Tea Party freshmen have already “neutered” the president, as one told me. They fret that Obama is an inept negotiator. They worry that he should have been out in the country selling a concrete plan, rather than once more kowtowing to Republicans and, as with the stimulus plan, health care and Libya, leading from behind.
As one Democratic senator complained: “The president veers between talking like a peevish professor and a scolding parent.” (Not to mention a jilted lover.) Another moaned: “We are watching him turn into Jimmy Carter right before our eyes.”
Obama’s “We must lift ourselves to a higher place” trope doesn’t work on this rough crowd. If somebody at dinner is about to kill you, you don’t worry about his table manners….
And she concludes:
The laconic president emerges from the sidelines periodically to warn about economic default, but we’re already in political default.
Consider what the towel-snapping Tea Party crazies have already accomplished. They’ve changed the entire discussion. They’ve neutralized the White House. They’ve whipped their leadership into submission. They’ve taken taxes and revenues off the table. They’ve withered the stock and bond markets. They’ve made journalists speak to them as though they’re John Calhoun and Alexander Hamilton.
Obama and John Boehner have been completely outplayed by the “hobbits,” as The Wall Street Journal and John McCain called them.
What if this is all a cruel joke on us? What if the people who hate government are good at it and the people who love government are bad at it?
Fast-forward past the sound and fury…The debt ceiling is going up. Government is getting bigger. Real spending cuts are getting kicked down the can. Entitlement reform is going nowhere. Reid and McConnell will dilute Boehner’s already diluted plan behind closed doors. And everyone in Washington will rush to take credit for nothing much.
The AP reported earlier on the $2.4 trillion number, too, although they say the cuts will be “slightly more” than the debt-ceiling boost. That’s still enough to get Barack Obama past the 2012 election, but not by much. It guarantees that the debt ceiling will be a 2012 election issue, although by now that was a given anyway.
However, the added McConnell wrinkle is interesting — and potentially a big win for Republicans. Essentially, Republicans get to claim credit for the cuts while laying blame for the debt increases on Obama. If they “disapprove,” Obama will veto the disapproval and end up owning all of the political baggage for the debt-ceiling increases. That’s a steep price to pay for Obama just to protect himself through the next election, although he could turn it on its ear and refuse to veto the second increase disapproval and force this fight all over again. That would, however, put the country back in “crisis” mode, and that would still be all on Obama.
This brings the deal closer to what I predicted yesterday; in fact, it almost matches it exactly. But can the leaders get the votes for it? If Obama endorses this deal, most Democrats will have no choice but to back it; after all, they have been doing the most Chicken Little screeching about the consequences of legislative failure. Boehner and McConnell will lose a significant number of Republicans, but both will probably hold a majority of their caucuses. I’d expect an agreement along these lines to pass quickly through Congress, maybe fast enough to avoid having to pass a $50 billion, two-week extension to gain time for the debate.
So that’s $1.2 trillion in cuts. Then a super special committee recommends more cuts in time for turkey. Then Congress must approve those cuts in time for Christmas, and if doesn’t, guess what? We get cuts anyway. Merry Christmas! Gonna be a heck of a holiday season. And they’re not allowed to even consider raising taxes. Not on the table.
And, of course, Republicans get their vanity vote on a Constitutional amendment. Because the Constitution is sacrosanct—until they want to amend it.
From ABC News, the key detail: “The special committee must make recommendations by late November (before Congress’ Thanksgiving recess). If Congress does not approve those cuts by December 23, automatic across-the-board cuts go into effect, including cuts to Defense and Medicare. This ‘trigger’ is designed to force action on the deficit reduction committee’s recommendations by making the alternative painful to both Democrats and Republicans.”
The Medicare cuts would supposedly fall on Medicare providers, not beneficiaries. The trigger would also include a vote on a Balanced Budget Amendment — but no requirement that it be sent.
…..But a senior White House official urged caution. As of early Sunday morning, the official said, “major details” of the agreement were still being discussed, and the nature of the trigger described in these initial reports is incorrect.
We’ll know more very soon. The idea of this sort of penalty is to constitute policy both parties agree is bad — that way they don’t simply choose to punt on a larger deficit reduction bill. The idea here is that the threat of Medicare cuts will focus Democrats and the threat of defense cuts will focus Republicans, and they’ll agree to fiscal policy that includes the entitlement cuts Republicans want and tax increases Democrats want.
Republicans have insisted that the debt limit should not be raised by any more than the amount by which Congress agrees to reduce the deficit. This framework would allow Republicans to consider future cuts as “baked in” and thus to agree to raise the debt limit through 2012 — a key Democratic demand.
Needless to say, this is a truly horrible deal. $2.8 trillion in cuts to discretionary spending. An unaccountable “super committee” that will probably recommend cuts and “adjustments” to Medicare and Social Security. No new tax revenue of any kind.
It’s hard to imagine how it gets much worse than this. If this deal goes through, it would represent nothing less than a capitulation on the part of the President and the Democratic Senate to economic terrorism on the part of the Republican caucus, and would set a major precedent for more accountability-free hostage taking in the future. Grover Norquist seems pretty happy about it, and why not? The gameplan for drowning the government in the bathtub is obvious from here. It’s clear that the Democrats won’t do a thing to get in the way, because there’s no hostage the Democrats will be willing to shoot–or even threaten to shoot–when the GOP takes one, nor will the media abandon its postmodern “both sides are just as bad” shtick no matter how asinine the GOP becomes.
None of which even touches the fact that the discretionary spending cuts and bipartisan commission to recommend entitlement cuts are right in line with what President Obama has repeatedly said he wanted, anyway. We’re certainly not going to get any help to stand up to this atrocious “compromise” from the President: he actively wants most of what is in it.
The only saving grace here is that some reports suggest that this might be a trial balloon: i.e., that the reaction from the rank-and-file on both sides might affect the ultimate acceptability of the bill. This is true on general principle, of course: the bill would still have to get through Congress, regardless of what Obama, Reid, McConnell and Boehner may have hammered out behind closed doors.
Remember where we started with this whole debate back in the Spring. Obama and the Democrats were demanding a clean bill. They gave up on that. Then they were pushing for a balance between spending cuts and tax increases. Obama seemed to be hanging everything on the tax cuts for private-jet owners as if cutting out a provision in his own stimulus bill would raise anywhere in the ballpark of the kind of money we needed. The Democrats have given in on all of that so that the negotiations took place on the GOP battlefield – arguing over the amount and make-up of spending cuts. We’ll have to see the final outline to see where the first part of that $1.2 trillion in cuts come from. Are they all backloaded and made up of gimmicks? Hopefully, Boehner has learned his lesson on that and will have cuts closer to his second proposal. We’ll have to wait to see that.
Once the Democrats made it clear that the only thing they were willing to fight and die on was the necessity of saving themselves from revisiting this issue before the election, the GOP had the momentum to push the bill more to their side of that battlefield. The fact that they were the only ones to come up with plans and actually vote on them gave them a bit more street cred. Sure, that last Boehner plan with its totally ludicrous provision of demanding that the BBA be passed out of both houses was total symbolism, but if that is what it took to get his bill over the top, then it worked.
Given that neither side wanted a default and the Democrats were willing to cave in order to get this issue out of the way before the election, the GOP were able to go to the brink, hang tough, and come out with a deal that, in the end, is much closer to their original position than that of the Democrats.
Brinkmanship can be nerve-wracking and it’s definitely not pretty. But sometimes it can be effective.
If Jonathan Karl’s reporting is correct, the final deal on the debt ceiling is pretty good considering that this is a hostage situation. First, the president is getting enough money that he won’t have to go back and ask for more before election day in 2012. Second, the congressional debt committee will be authorized to recommend tax hikes. Third, the trigger to enforce action on the debt committee involves across-the-board cuts, but they hit the Pentagon harder than Medicare, and any Medicare cuts would hurt providers and not affect beneficiaries. If this is a true picture of the deal, then the Democrats came out better than most of us feared.
There is still no stimulus mentioned, like an extension of the payroll tax holiday or unemployment insurance. That’s extremely unfortunate, but it seems like the GOP’s bottom line is that nothing can be done by the federal government that might alleviate or improve unemployment.
Automatic cuts to Defense are tantamount to threatening the national security. If Democrats were simply obstinate and ran the clock down, they would put Republicans in the position of choosing between tax hikes and destructive cuts to defense spending.
This is not a good deal and could be a terrible one because the Democrats will not hesitate to play tax hikes off of national defense, which has already absorbed hundreds of billions in cuts. If in four months the six Democrats refuse reforms in entitlements and insist on tax hikes, the six Republicans will be facing the choice between gutting an already overstretched and underfunded military or accepting tax hikes.
I have to hope this report is wrong in crucial details on the trigger and the consequences.
This is not a good deal. But it is almost certainly the best doable deal. And if the across-the-board cuts can be made to stick, that would be preferable to another round of endless/fruitless/drama-queenatic horse-trading.
If Boehner can whip his caucus into line, there’s not a hemophiliac’s chance at a vampire convention that the President won’t sign it — no matter how he might protest tonight.
However the debt limit showdown ends, one thing is clear: under pressure from congressional Republicans, President Barack Obama has shifted to the right on budget policy, deepening a rift within his party heading into the next election.
Entering a campaign that is shaping up as an epic clash over the parties’ views of the size and role of government, Republicans have changed the terms of the national debate. Mr Obama, seeking to appeal to a swathe of independent voters, has adopted the Republicans’ language and in some cases their policies, signalling a willingness to break with liberals on some issues.
That has some progressive members of Congress and liberal groups arguing that by not fighting for more stimulus spending, Mr Obama could be left with an economy producing so few jobs by election day that his re-election could be threatened. Not only would independents be turned off but Mr Obama also risks alienating Democratic voters already disappointed by his escalation of the war in Afghanistan and his failure to close the Guantanamo Bay prison, end the Bush-era tax cuts and enact a government-run health insurance system.
”The activist liberal base will support Obama because they’re terrified of the right wing,” said Robert Borosage, co-director of the liberal group Campaign for America’s Future. ”But I believe that the voting base of the Democratic Party – young people, single women, African-Americans, Latinos – are going to be so discouraged by this economy and so dismayed unless the President starts to champion a jobs program and take on the Republican Congress that the ability of labour to turn out its vote … is going to be dramatically reduced.”
President Obama and congressional Republicans are close to nailing down a debt ceiling deal just two days before a possible government default, negotiators said today.
White House adviser David Plouffe told NBC’s Meet The Press that “we don’t have a deal,” but there has been progress and “today is obviously a critical day.”
“The hours are ticking here,” Plouffe said.
Over on CNN’s State of the Union, Senate Minority Leader Mitch McConnell, R-Ky, said “we’re very close” and “had a very good day yesterday.”
The parties are racing to try and reach an agreement by Tuesday, the day the Treasury Department says it loses borrowing authority and faces default on any number of government obligations.
“Trigger” is a fun word for this — you might as well call it the machine gun. If you paid attention to floor debate yesterday, you saw that Republicans still deal the “only Democrats want to cut Medicare!” card when they’re in a jam. Now we either automatically cut Medicare or negotiate Medicare cuts in a joint committee.
A vote, in both the House and Senate, on a balanced budget amendment.
We’ve been around the carousel on this one. Cut, Cap, and Balance required passage of a strict BBA in both houses before a hike in the debt ceiling — any hike in the debt ceiling. Boehner 1.0 required only that a BBA be voted on, and allowed “BBA classic,” the 1995 version of the amendment that didn’t include supermajority requirements for tax hikes, to fit the bill. Boehner 2.0 required that a BBA be passed before the second “tranche” of the debt increase — effectively sending us down the road to a 2/3 vote for the next debt limit hike.
The Senate comes into session at noon. Any deal needs to be choked down by the House and Senate; a depressingly large part of the sale will consist of convincing either party that, no, seriously, this was based on the deal their leader came up with.
Senator Lindsey Graham (R-S.C.), appearing on ABC’s This Week, suggested that half of the House Republican conference would end up voting for the debt ceiling compromise coming into focus, but not much more.
“I think half the conference in the Republican house must vote for this … I think that is the minimum,” said the South Carolina Republican. “I like [House Speaker] John Boehner. Maybe he can get more. But it is a $3 trillion package that will allow $7 trillion to be added to the debt over the next decade.”
Graham’s vote counting seems a bit suspect, though he did serve in the House before heading to the Senate. The bill that is being discussed meets nearly all GOP demands, as currently reported. It does not include revenues. It would empower a debt-reduction committee without the fear that the Bush tax cuts will be raised if that committee refuses to act. It also, reportedly, may allow for a vote on a Balanced Budget Amendment. Even Americans for Tax Reform’s Grover Norquist seemed to praise the deal in a follow up interview on ABC.
If Boehner only gets half his conference, it would mean that he would have to get just under 100 Democratic votes for passage. Judging by the initial reaction from non-elected Democrats, that would seem like a steep hill to climb.
Most of us have presumed from the outset that a disaster-averting deal would be struck, although the inability of Republican leaders to get their own caucuses to agree to seemingly slam dunk deals brought that into question. It’s always possible that the combination of defense and Medicaid cuts will cleave off enough Republican and Democratic votes, respectively, to kill the compromise. But it’s looking like people are ready to get this over with.
As is always the case in tense negotiations, one wonders why the deal couldn’t have been struck long ago. Most of these issues have been agreed to in principle for quite some time. But, as with labor deals, impending deadlines that impose dire consequences are usually necessary to get people to swallow bitter concessions.
—Washington Monthly’s Steve Benen:
Given how this process has unfolded in recent months, I’d recommend caution against reacting too strongly to any blueprint attributed to unnamed sources. We’ve seen several bogus leaks before, and we don’t know who’s leaking and why.
That said, if this is the general framework of the crisis-averting deal, it’s a bit of a disaster. The number of major concessions Republicans would be asked to make in this agreement is practically zero.
As for the details of the “trigger” (or, “enforcement mechanism”), note that Democratic demands for at least the possibility of new revenue would again be ignored. GOP officials would have some incentive in the next round of talks, however, if significant Pentagon cuts were the potential consequence of failure.
We should know more soon, but as the political world ponders the trial balloon, keep an eye on (a) how many Senate Democrats balk and say this goes go too far; (b) whether Speaker Boehner, who’s been largely silent on this, weighs in at all; (c) the number of House Dems, many of whom will be needed to pass a deal, who reject the plan; and (d) whether it includes anything in the form of economic “sweeteners,” most notably an extension of the payroll tax cut.
Joe Gandelman is a former fulltime journalist who freelanced in India, Spain, Bangladesh and Cypress writing for publications such as the Christian Science Monitor and Newsweek. He also did radio reports from Madrid for NPR’s All Things Considered. He has worked on two U.S. newspapers and quit the news biz in 1990 to go into entertainment. He also has written for The Week and several online publications, did a column for Cagle Cartoons Syndicate and has appeared on CNN.