Former OMB official Jim Capretta -- whose tenure at the White House lasted from 2001-2004, when the average annual deficit was roughly one-seventh of 2011's shortfall -- has written a very important piece for NRO. He argues that the current 'Gang of Six' framework is a "terrible" plan, and calls it "certainly much worse" than the McConnell contingency. Follow the link and digest his full argument. It's required reading. If you're pressed for time, here are a few pull-quote takeaways:
First, there’s a relatively small bill to supposedly save $500 billion immediately with a combination of discretionary spending caps through 2015, a move toward the chained CPI for indexing Social Security and the tax brackets, repeal of the CLASS Act, and other unspecified process provisions. Although unstated, presumably it is this bill that would carry a temporary debt-limit increase to get past August 2, and probably provide about six months of room before another debt-limit increase became necessary.
Republicans must understand that even in this small, initial part of the package, the Democrats are insisting on a tax hike. The chained-CPI proposal will increase taxes along with slowing inflation increases in Social Security.
The second part of the Gang of Six package is far worse. It’s essentially a call for a budget “reconciliation” bill, with no specifics yet available. Senate committees with jurisdiction over taxes and entitlements would be tasked with achieving targeted amounts of savings or tax increases. For instance, the Finance Committee would be charged with reporting out a tax-reform plan that increases taxes by about $2.3 trillion over a decade. That committee would also be charged with finding savings in Medicare and Medicaid, but there’s absolutely no indication of how the savings will be achieved.
Republicans would be foolish to think this process will produce anything worthwhile. The Democrats control the Senate, and all of the committees. They will write the tax and entitlement changes, and look for Republican votes. It’s a recipe for another round of useless mishmash posing as “entitlement reform.”
Capretta's bottom line on the 'Gang:'
In short, the Gang of Six has essentially offered a plan in which Republicans would hand over control of the budget process to Democratic senators and hope for the best. Enough said.
Oof. The critical question then becomes, what now? Capretta suggests the GOP should play small ball, raise the debt ceiling (he makes a persuasive case for why this is essential), and keep the McConnell compromise up their sleeve, just in case:
What conservatives should be doing is seizing the initiative in the House. They should move immediately to pass a small debt-limit increase, on the order of $500 billion, coupled with a reasonable set of spending cuts, including caps on discretionary spending. They should then send that to the Senate as the starting point for discussions. Doing this now would increase Speaker Boehner’s leverage immensely, as he would become the only person in the room who had shown by his actions that he doesn’t want a default. Moreover, at this late stage, there’s a very real chance it would become the vehicle for getting past August 2. If Republicans can’t find their way to make such a move (for whatever reason), then they have little choice but to work with Senator McConnell on his version of Plan B. But they should make it absolutely clear that no version of the Gang of Six plan will be acceptable.
But will the White House agree to a shorter-term patch? The president has sent mixed signals on this question, but does he really have the stones to veto a $500-700 Billion temporary deal with the deadline less than 300 hours away?
UPDATE - Why yes, the White House apparently will consider a short-term increase. Amazing. Last week, body-snatcher Obama unilaterally ruled this option out -- so much so that his press secretary couldn't say if a temporary fix would be any better than outright default -- before he put it back on the table, only to snatch it back away yesterday. And now this:
President Barack Obama would support a short-term extension of the debt limit if Democrats and Republicans reach agreement on a broader deficit-cutting deal but need more time to move it through Congress, White House Press Secretary Jay Carney said Wednesday.
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