Behind the political one-upmanship and bipartisan bashing, the underlying problem preventing a compromise to cut the deficit and increase the federal debt ceiling is the gap between what needs to be done and what politically can be done.
The crucial players in closing it remain House Republicans.
After all, virtually everyone who has proposed a serious deficit reduction plan — except Republican Rep. Paul Ryan of Wisconsin — has concluded that any package must include savings in four areas: domestic discretionary spending; entitlements such as Medicare, Medicaid and Social Security; defense spending and revenues.
Every recent bipartisan panel has said that, and it was the path pursued by previous presidents of both parties, Republicans Ronald Reagan and George H.W. Bush and Democrat Bill Clinton. It’s what President Barack Obama is urging.
But given present positions, no such package can pass the House — where many GOP members were elected on platforms opposing any debt ceiling increase — and possibly the Senate. So both parties are pursuing political goals.
House Democrats, whose votes may be required if most House Republicans stand firm, oppose cutting entitlements without curbing tax breaks for wealthier Americans. Senate Democrats are divided, but most oppose further domestic spending cuts and entitlement reductions without some revenue increases.
Senate Republicans floated that old panacea, a constitutional amendment requiring a balanced budget, but don’t have the votes.
And House Republicans, who have enough votes to pass or block anything if they stick together, insist they won’t consider any increase in revenues.
Internal congressional politics complicate the situation. House Majority Leader Eric Cantor’s decision to quit Vice President Joe Biden’s bipartisan talks seemed designed to pressure Speaker John Boehner against accepting any increases in revenues or face a revolt by anti-tax Republicans that could undermine his speakership.
But on Wednesday, Cantor indicated he may be willing to accept provisions closing some tax loopholes.
House Democrats see political value in resisting Medicare cuts to benefit from the opening that Ryan provided with his unpopular plan to replace Medicare with a voucher system. They also complain that they’ve been ignored in the negotiating.
Given this impasse, both sides have resorted to political demagoguery aimed more at placing blame for any debt default caused by failure to reach a deal than actually reaching one.
One example is the repeated GOP contention that Obama bears major responsibility for failing to present a specific proposal. Since Republicans would instantly reject any Obama plan, this seems mainly designed to goad him into proposing something that would reduce their damage from Ryan’s budget.
But Obama hardly helped matters by contrasting congressional work habits against those of his two daughters and using exaggerated examples suggesting Republicans favored tax breaks for corporate executives and the super-rich over college scholarships.
Both sides have floated ways to avoid the real problem. Some Democrats claim the 14th Amendment’s provision that the validity of the national debt “shall not be questioned” means congressional action is unnecessary. Some Republicans argue the Treasury’s current Aug. 2 deadline for acting is mere fiction.
The Senate GOP — plus former President Bill Clinton — suggested a shorter extension of the debt ceiling and a smaller deficit reduction package. House Republicans fear that would require their politically vulnerable members to cast additional votes on the issue before the 2012 election, and Obama rejected it Tuesday.
One hope is that the elements of a feasible deal are evident. Biden’s talks reportedly identified $1.5 trillion to $1.7 trillion in spending cuts, reductions in farm subsidies and federal retirement benefits, Medicare and Medicaid cost savings, a formula to reduce annual Social Security increases and a mechanism for curbing spending.
House Democratic Whip Steny Hoyer and Boehner previously proposed gradually increasing the Social Security retirement age and reducing benefits for higher-income recipients. Independent Sen. Joe Lieberman and Republican Sen. Tom Coburn proposed limiting Medicare benefits for wealthier Americans.
These proposals provide the basis for a compromise in the national interest. But many Republicans think Obama’s acceptance of large spending cuts means they are winning this fight, though a recent Pew Research Center-Washington Post poll suggests they won’t escape the primary blame if they force a default.