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Coming Soon: Boehner's New Debt Deal

Let's take a deep breath and re-establish the timeline.  Over the weekend, Speaker Boehner, Sen. Reid, and Sen. McConnell reportedly agreed in principle to the primary contours of a bipartisan debt deal.  Their staffs were collaborating to generate the plan's legislative language when the president rejected it "out of hand," aborting the process.  In light of Obama's stubborn opposition, Reid is now formulating his own plan, which largely accedes to GOP demands -- although there's a good chance quite a few of his proposed cuts will turn out to be budget gimmickry.  Boehner has also gone back to the drawing board, and will release his revised plan at a press conference at 4pm ET.  He called Rush Limbaugh with some specfics of the two-step proposal, and Fox News fleshed it out even further:


--Cuts That Exceed The Debt Hike. The framework would cut and cap discretionary spending immediately, saving $1.2 trillion over 10 years (subject to CBO confirmation), and raise the debt ceiling by less - up to $1 trillion.

--Caps To Control Future Spending. The framework imposes spending caps that would establish clear limits on future spending and serve as a barrier against government expansion while the economy grows. Failure to remain below these caps will trigger automatic across-the-board cuts (otherwise known as sequestration).

--Balanced Budget Amendment. The framework advances the cause of the Balanced Budget Amendment by requiring the House and Senate to vote on the measure after October 1, 2011 but before the end of the year, allowing the American people time to build sufficient support for this popular reform.

--Entitlement Reforms & Savings. The framework creates a Joint Committee of Congress that is required to report legislation that would produce a proposal to reduce the deficit by at least $1.8 trillion over 10 years. Each Chamber would consider the proposal of the Joint Committee on an up-or-down basis without any amendments. If the proposal is enacted, then the President would be authorized to request a debt limit increase of $1.6 trillion.

--No Tax Hikes. The framework included no tax hikes, a key principle that Republicans have been fighting for since day one.


What we don't yet know is what that first tranche of cuts and caps actually looks like.  Are they real cuts, or the sort of smoke-and-mirrors nonsense that infused the last "grand" compromise with a bitter aftertaste?  In policy terms, the forced vote on a BBA is a waste of time because a remotely acceptable BBA (read: one with robust mechanical limitations on tax hikes) simply will not pass this Congress with 2/3 majorities.  Politically, conservatives could use the period between now and the promised vote to drum up support for the already-popular measure, then hammer Democrats for voting "no."
Some conservatives aren't happy with the new blue ribbon commission established under Boehner's plan.  They worry that it won't result in any real reforms (quite possible), and that its recommendations could inadvertently fast-track bad proppsals, including tax hikes.  I think these fears are overblown.  Boehner and McConnell would have sole discretion over selecting the Republican members of the evenly-split panel.  Both GOP leaders have been absolutely steadfast in opposing tax increases at every step of this process.  Why would they suddenly go wobbly?  Furthermore, tax increases were rejected in December, and it appears they've been stymied again.  Does anyone really believe Congress will work up a greater appetite to enact tax increases in an election year? 
In short, the Boehner plan seems fairly reasonable.  It also has the added bonus of incorporating one of the attractive elements of the much-maligned McConnell plan: Forcing the president to preside over another debt debate as he's campaigning for re-election.  For this reason, I suspect Democrats will fight it tooth and nail (as I write this, Harry Reid and Chuck Schumer are denouncing it as a "dangerous" nod to right-wing Tea Party) extremists.  This tension may end up strengthening Republicans' hand in negotiating a better version of Reid's alleged plan, which has the basics right, but still contains too many TBA specifics.  Democrats have tipped their hand, politically speaking:  They're willing to give up on taxes to protect themselves -- and especially the president -- from another bruising round of debt talks next year.  Much hunch is that Republicans can probably live with that, but they may be able to extract a few more real spending cut concessions from Democrats in exchange for their desired election year insulation on the larger issue.
In the meantime, President Obama is still insisting that any deal include tax increases.  Maybe he missed the part where his party caved on that point.  Boehner's plan also faces opposition within his own ranks.  The conservative Cut/Cap/Balance coalition (spearheaded by the RDC) is signaling its opposition to the Speaker's proposal.  To the president and the RSC, I ask: What's your viable alternative?

UPDATE - After knee-capping Reid's bipartisan agreement over the weekend, the White House now appears to be embracing Reid's new plan.  From Jay Carney:

Now, faced with the “my way or the highway,” short-term approach of the House Republicans, Senator Reid has put forward a responsible compromise that cuts spending in a way that protects critical investments and does not harm the economic recovery.  All the cuts put forward in this approach were previously agreed to by both parties through the process led by the Vice President.

UPDATE II - Two more useful nuggets:  Jen Rubin reports that Boehner's plan is nearly identical to the bipartisan proposal Reid endorsed over the weekend, only to back off after Obama's coniption.  In other words, Reid agreed to the very framework he now calls "radical."(I say again, what a hack). Also, TWS' John McCormack is still seeking an answer on how many of Reid's cuts will occur in FY2012 -- a key question.  Reid referred McCormack to his staff because he's "not much of a numbers wonk."


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