Inside the budget battle: little progress as debt ceiling vote looms
Experts say there are two paths to financial ruin for the U.S.: default on its debt, which could happen if Congress doesn’t raise the debt ceiling by Aug. 2, or second, and more fundamentally, failure to address staggering deficits that are slated to overwhelm the economy in coming decades.
Can Washington kick its spending addiction? There are reasons to worry. Everyone seems to have a different plan, and negotiations between party leaders led by Vice President Joe Biden are going slowly enough that Republican House Speaker John Boehner recently pressed President Obama for a sense of urgency.
The pending debt ceiling deadline — Aug. 2, according to the Treasury Department — is a short-term matter. But it’s only one of numerous venues for a political war over the same core issue: where will Congress find trillions of dollars to right America’s fiscal ship? From tax increases, or spending cuts, or both? Top lawmakers like Democratic Sen. Mark Warner and Republican Sen. Jeff Sessions say there’s a “window” of two to three years before the problem gets permanently out of control.
One front in the battle is the “Gang of Six’s” endlessly delayed secret plan. After recently losing conservative icon Sen. Tom Coburn, Oklahoma Republican, two of the group’s members went before the cameras Wednesday, boasting of their bipartisanship and giving the distinct appearance they’ll introduce a plan shortly — with or without Coburn.
Another front is Republican budget wonderwonk Paul Ryan’s politically perilous House-passed budget. Commentators heaped praise on Ryan for his courage when he released the plan, but Democrats are determined to show why it was courageous in the first place. The Democratic National Committee is leading the push to savage Republicans over “ending Medicare” and, only sometimes by implication, killing Grandma.
A speech by Tim Pawlenty last week shows how important the role of the 2012 presidential contest will be in shaping the budget battle. Pawlenty offered a plan for radically simplifying the tax code and lowering rates in the process. But his optimism (“Let’s grow the economy by 5%”) drew ridicule from the left (“It’s a joke”). Pawlenty also backed a balanced budget amendment to the constitution just as House conservatives were pushing Boehner to demand one.
Here’s a look at some of the key players in the budget battle:
House Speaker John Boehner
As leader of the House Republicans, Boehner is arguably the single most important player. His troops, elected on a wave of Tea Party energy, are going to be the most difficult to please of any major contingent on the political landscape. They are lusting for spending cuts.
Boehner was able to thread the needle on the last spending battle, over the continuing resolution appropriations bill, keeping the right wing flank of his caucus in check and orchestrating an eleventh hour deal with President Obama that most political insiders saw as a Boehner victory.
But damaging revelations about the fine print of the deal – billions of dollars in “cuts” relied on accounting gimmicks – have left House conservatives less trusting on details.
Boehner’s job could depend on stemming a conservative riot; Washington is rife with speculation about his deputy Eric Cantor’s ambitions.
For these reasons, House Republicans think Democrats are underestimating how stiff Boehner’s backbone will be when it comes to the final negotiations over the debt ceiling.
Boehner’s budget chairman, Paul Ryan, is weathering the storm his budget wrought fairly well, but opponents have scored some hits, like criticizing his use of an overly-optimistic Heritage Foundation estimate.
Meanwhile, poll numbers about Ryan’s plan are enough to terrify some Republicans. For instance, watch this GOP Senate candidate in Florida, land of old people, spend almost five minutes refusing to answer whether he’d vote for the budget.
Rep. Jim Jordan
Jordan is the leader of the right wing flank. Just a week ago, he orchestrated a symbolic move to press Boehner on debt ceiling strategy: hand delivering a letter calling for the Republican Study Committee’s (RSC) “cut, cap and balance” approach in return for raising the debt ceiling.
The main departure from GOP leadership’s current position is the RSC plan’s focus on institutional reforms of how Congress spends money, the most important being a balanced budget amendment to the Constitution.
Jordan expects the negotiations over the debt ceiling vote to go up to the wire, all the way to the Aug. 2 deadline, and isn’t overly concerned with the consequences of missing it.
“What’s worse,” he asks in an interview, missing the Aug. 2 deadline, causing a “disruption in the bond market for a short time” but securing significant progress on long-term deficits? Or avoiding any short-term disruption without making a dent on the debt? His answer is the latter.
At a recent meeting between Republicans and Obama, Republicans pressed Obama on “what’s your plan?” According to Jordan, Obama pointed to his budget, released in February.
“With all due respect,” said GOP Whip Kevin McCarthy, your budget just failed 97-0 in the Senate.
Indeed, that budget is dead. Obama’s do-over budget speech, which called for $4 trillion in spending cuts and tax increases over 12 years, also appears to have already faded into the ether. It was never accompanied by the level of detail necessary to scrutinize it.
Obama was elected in part because of hopes, by both Democrats and Republicans, he would be an “adult” leader of the country, willing to forsake political cheap shots for the national interest. But as Obama stands by idly as his party’s political apparatus savages Republicans over Medicare, the sentiment seems outdated.
Senate Majority Leader Harry Reid
Like Obama, Reid’s not much of a player on the budget issues, but at least he’s honest about it. “It would be foolish for us to do a budget at this stage,” he told The Los Angeles Times.
The question for Reid, though, is whether it’s worth it for his party to endure the costs of failing to pass a budget for over two years. Republicans are using this to counter Democratic attacks on Medicare.
Sen. Kent Conrad and the Gang of Six
“Kent Conrad’s great. He’s not up for reelection, he doesn’t care,” said a GOP source close to the Gang of Six negotiations. The idea is Conrad is showing an unusual willingness to slaughter sacred cows.
His top Democratic ally in the effort, Sen. Mark Warner of Virginia, bristles with scorn for political team playing. “We need to check our partisan hats at the door,” he said in an appearance with fellow Gang member Sen. Saxby Chambliss before the Economic Club of Washington Wednesday.
However, when asked if he supports his party’s attacks on Paul Ryan’s budget (DNC chief Debbie Wasserman Shultz described Ryan’s plan as “we’re going to throw you to the wolves”), Warner offered praise for Ryan, but wouldn’t criticize his own teammate.
“I give him a lot of credit for putting out a serious plan, and that’s what we’re trying to do as well,” he said when asked about the attacks.
Chambliss is so obviously enjoying his moment in the Senate’s “it” negotiating group, one wonders whether this is as much a branding exercise as it is a quest to make law. “This is exactly the way the Senate is supposed to work,” he said. Chambliss is the Senator who won his office in part by blasting war veteran and triple amputee Max Cleland, the Democratic incumbent, for “vot[ing] against President Bush’s vital homeland security efforts 11 times!”
Sen. Jeff Sessions
Jeff Sessions has to be driving Kent Conrad crazy.
Since being named Republican ranking member of the Senate budget committee in January, Sessions turned his spotlight on Democratic inaction into his party’s best talking point, in the process also becoming the top foe of the Gang of Six and “secret meetings” everywhere.
“Comprehensive plans don’t often come out of secret meetings with a small group of people,” he said in an interview.
“The reason it’s ‘foolish’” for Democrats to pass a budget is “they would have to explain to Americans what their vision is, and it would be rejected as tax and spend,” Sessions said.
Also at stake is turf: the importance of the Senate Budget Committee, of which Sessions is the top Republican.
“I don’t think anyone I know has the brainpower to compute how it’s gonna all end up,” one Republican said. It’s a complicated chess board with a host of players that have various motivations.
The stakes are incredibly high, but right now there’s no light at the end of the tunnel. Right now the question isn’t how Washington will solve the debt ceiling and deficit problems, but whether it will.