Where Things Stand in the Debt-Ceiling Standoff
President Obama, Vice President Biden, and the eight most powerful members of Congress talked at some length yesterday about how to craft a debt-reduction deal. Participants were pretty tight-lipped afterwards, but we have enough information to piece together where things stand as of this morning.
President Obama, for example, explained at the outset "that he would not accept any package that did not extend the debt limit through the 2012 elections." That's a sensible move -- if this is going to be done, it's crazy to think about doing it again next year in the heat of a national campaign.
At that point, Obama presented the so-called "Gang of 10" with three broad options about the eventual size of the agreement and which of the three the participants should try to reach: a more modest series of cuts ($2 trillion), a larger package in line with the Biden-led talks ($3 trillion to $3.5 trillion), or the more ambitious approach leaked by the White House on Wednesday night (roughly $4 trillion).
Each member was asked to express a preference. Most backed the largest, boldest option, but it's important to note who dissented and why.
When it comes to targets, Obama and House Speaker John Boehner (R-Ohio) appear to share a goal, if not a means to reach that goal.
Boehner enthusiastically endorsed Obama's call for a far-reaching plan. Later at the Capitol, Boehner made his own pitch to reluctant Senate Republicans, arguing in a closed-door luncheon that securing the nation's economic future requires bold action.
According to the NYT account, Boehner reportedly declared that he took the job of speaker to get things accomplished, not just to latch on to the title.
All of the Democratic leaders, including House Minority Leader Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.), also backed the most ambitious approach.
But two of the participants balked.
Six of the eight expressed their support for the biggest deal, the aides said. But Representative Eric Cantor, the House majority leader, and Senator Jon Kyl of Arizona, the ranking Republican on the Senate Finance Committee, favored the midrange $2 trillion, voicing doubts about how they could sell a $4 trillion deal to their rank and file, officials said, since it would involve tax increases.
This is critically important, because Cantor's and Kyl's opposition would mean the bold approach almost certainly can't happen. They're well aware of a fact that generally goes unsaid: rank-and-file Republicans claim to be concerned about the debt and deficit, and even claim it's a "crisis," but don't really want to address the budget shortfall if it would mean additional revenue.
Regardless, if Cantor and Kyl had said they want to aim for the $4 trillion package, I'd still say it's a long shot. If they're not willing to even to try to reach the goal, I'd say this practically impossible.
Looking ahead, Harry Reid said a deal "must be sealed by the end of next week to give congressional leaders enough time to draft the legislation, submit it to congressional budget analysts and marshal the votes before the Aug. 2 deadline." The president will reconvene the members at 1 p.m. on Sunday, and Obama told then to dress casually because "they are going to be there a while."
Given the scope of the work, and the skepticism from leading Republicans, how anyone expects this to come together in the next few days is a mystery.