Jul 18, 2011 1 Comment ›› Pat Dollard
President Barack Obama and the two top House Republican leaders held an unannounced meeting at the White House Sunday, trying to get debt talks back on track with just two weeks left before the threat of default.
Speaker John Boehner and Majority Leader Eric Cantor were both part of the discussions which come even as the House GOP has scheduled floor votes Tuesday on a newly revised debt ceiling bill that is remarkable for its total absence of compromise at this late date and represents a real shift to the right.
Boehner’s office confirmed the meeting to POLITICO Monday but said that the goal was to keep lines of communication open, not to change the legislative plan for this week.
“As we said throughout the weekend, the lines of communications are being kept open,” said Kevin Smith. “But there is nothing to report in terms of an agreement or progress. We believe cut, cap and balance represents the best path forward, and we are looking forward to the House vote on it tomorrow.”
Final revisions made Friday submerge conservative demands to reduce all federal spending to 18 percent of gross domestic product — a target that threatened to split the GOP by requiring far deeper cuts than even the party’s April budget. But Republican congressional leaders still want a 10-year, $1.8 trillion cut from nondefense appropriations and have added a balanced-budget constitutional amendment that so restricts future tax legislation that even President Ronald Reagan might have opposed it in the 1980s.
Indeed, much of the deficit-reduction legislation signed by Reagan would not qualify under the new tea-party-driven standards. And even the famed Reagan-Tip O’Neill Social Security compromise — which raised payroll taxes — passed the House in 1983 well short of the 290 votes that would be required under the constitutional amendments being promoted by the GOP.
Dubbed Cut, Cap and Balance, the House bill allows for a $2.4 trillion increase in the Treasury’s borrowing authority but effectively uses the Aug. 2 deadline as a Republican anvil on which to hammer out cuts President Barack Obama would otherwise veto.
On the Sunday talk shows, proponents praised the initiative as a “common-sense” and “real deal” framework for final negotiations with the White House and Senate Democrats.
“At least we will have demonstrated we can pass legislation to deal with the debt ceiling and put the onus on the Senate to act,” Rep. Robert Goodlatte (R-Va.) told POLITICO. But in a blistering statement, Robert Greenstein, head of the Center on Budget and Policy Priorities, said the bill “stands out as one of the most ideologically extreme pieces of major budget legislation to come before Congress in years, if not decades.”
Statutory caps would drive spending down to 19.9 percent of gross domestic product by 2021 — a $1 trillion difference with Obama in that year alone. At the same time, Pentagon appropriations are assumed to grow even as Supplemental Security Income payments for the elderly and the disabled would be exposed to future sequesters to enforce the caps.
Republican insiders argue that the floor votes are a necessary step to establish a conservative record before compromises are made to get past the crisis. In fact, at a meeting Friday with Obama’s chief of staff, Bill Daley, Boehner floated a new version of the $4 trillion compromise he has previously pursued with the president. Cantor was also in that meeting as the two Republican leaders try to avoid oa repeat of the divisions that have plagued them in these talks.
But at this late hour, the House bill represents a major political escalation that risks undermining Boehner’s standing. And going into 2012, congressional Republicans seem focused on driving their conservative base, displaying little confidence that one of their presidential candidates will oust Obama.
Budget resolutions are nonbinding and intended to set goals for Congress. This bill goes much further: writing those targets into law and reverting to the same tactics used in the government shutdown crisis but with far higher risks to the American economy.
Back-channel talks continued during the weekend, and Obama, who met with senior advisers on Saturday, was weighing whether to call congressional leaders back for another session at the White House.
Thrust into the limelight, his shy budget director, Jack Lew, made the rounds on Sunday talk shows, battling impatient news anchors as well as the GOP.
“Leadership requires a partner,” Lew said on NBC’s “Meet the Press.” And he returned to the same theme on ABC’s “This Week,” putting the focus on Boehner.
“I think the speaker knows quite well how far the president is willing to go,” said Lew. “And I think the president has shown that he’s willing to move into space that is a very hard place for Democrats to go. … We need a partner to work with.”
While Obama pursues Boehner, Senate Majority Leader Harry Reid (D-Nev.) is more agitated about what all this means for his partnership with Minority Leader Mitch McConnell (R-Ky.).
Staff talks have made progress on a McConnell-Reid fallback plan, but McConnell is reluctant to proceed until his GOP colleagues have had a chance to weigh in on the House debate. This means much of this week could be lost — narrowing the window left to shuttle deals back and forth between the two chambers before the Aug. 2 deadline.
The odds increase, therefore, that Washington will fall into late-night theatrics Aug. 1 akin to the government shutdown. And Treasury Secretary Timothy Geithner is privately warning leaders that financial markets won’t discern the difference between political base-building “show” votes and real decisions on the debt.
The new House escalation is all the more striking because Senate Democrats have begun to offer concessions, going beyond the administration’s position in some cases, on appropriations cuts for 2012 and 2013.
A two-year spending freeze at $1.047 trillion has been discussed as part of the McConnell-Reid talks. That’s still $28 billion more than House Republicans want for 2012 but about $20 billion less than the Congressional Budget Office score for the discretionary totals for 2011 — after April’s deal.
Boehner’s latest offer assumes substantially smaller appropriations savings over the next 10 years than the bill he is bringing to the House floor. And to a surprising degree, Republicans also seem conflicted over whether to count a substantial peace dividend if the U.S. successfully winds down its commitments in Iraq and ends combat operations in Afghanistan.
Boehner’s new offer appears to rely on a portion of these savings, as does the Cut, Cap and Balance bill. But Cantor has argued against the reduced war costs being counted in the deficit-reduction efforts now.
The bottom line to the debt fight may be a Washington rule of thumb about the two parties:
Democrats hate tough budget votes — as evidenced by the Senate’s failure to even bring up a budget for so long. And Republicans love tough-sounding votes but often fix the deck so they lose and can score political points without having to live with the results.
That’s why the debt ceiling presents such a quandary: It requires both parties to take a tough vote — and it must pass.
The balanced-budget amendment could still be a way to pull GOP votes toward a deal. But thus far, it has been a classic case of Republicans appearing not to want to win.
In the mid-‘90s, proponents came within one vote of sending an amendment to the states for ratification. Now, the GOP is back but with a version that makes it harder to get the required Democratic votes.
The most common House version would cap spending at 18 percent of GDP, requiring nearly $476 billion more in cuts in 2021 than even House Budget Committee Chairman Paul Ryan (R-Wis.) has proposed. And to pass any revenue measure, Congress would need two-thirds of all the members in both chambers — an immensely tough standard to meet.
The final draft of the Cap, Cut and Balance bill signals some openness by trying to smooth over these demands. No longer is the 18 percent of GDP target spelled out and the two-thirds majority need be only of those voting on a given day, not the entire membership.
Goodlatte, a big promoter of the constitutional amendment, suggests more compromise is possible. “I just want the toughest amendment I can get,” he told POLITICO.