Saturday, July 30, 2011

Let's play 'Spot the Important Detail'

ABC News has learned that Republicans and the White House have struck a tenative[sic] deal to raise the debt ceiling before the Aug. 2 deadline. It's not done yet, but here is the framework of the tentative deal they have worked out, according to a source familiar with the negotiations:
  • Debt ceiling increase of up to $2.8 trillion
  • Spending cuts of roughly $1 trillion
  • Special committee to recommend cuts of $1.8 trillion (or whatever it takes to add up to the total of the debt ceiling increase) Committee must make recommendations before Thanksgiving recess
  • If Congress does not approve those cuts by late December, automatic across-the-board cuts go into effect, including cuts to Defense and Medicare.
Did you find it? Because it's certainly not a number, and it's certainly not reported above. The key to whether this deal is going to be a great deal or a terrible deal rests on one big factor.

How is the "special committee" going to be constituted?

This deal actually looks pretty good if you make a lot of unlikely assumptions about intentions and personnel of the "Special Committee." The primary assumption is that Speaker Boehner and Mitch McConnell want a deal. An equally important, but secondary assumption is that McConnell and Boehner leadership teams command enough support to invoke cloture in the Senate and pass a bill that enjoys significant Democratic support. If all Democrats voted for the bill (an unlikely assumption), Only 24 Republicans would be needed to pass it. And of course, the most egregious assumption: Democrats are in this fight to protect the middle class and poor, find some ways to spur job growth, and invest in America. If they're in this just to get the debt ceiling lifted and avoid a catastrophe, they're walking into a used car dealership having decided that they have to buy a car today.

That brings us to speculation. Could this be a short-term play in order to kick the can down the road? It's certainly possible, but the fact is that the debt negotiations will be front page news going into Thanksgiving night 2011. The issue will also resound around 2011 election night. Republicans don't like the look of their approval numbers, and while the NRCC ran ads against Pelosi last time, Boehner has elevated his own infamy sharply in the last two years. Democratic ads attacking the Republican Leadership on the issues would strike a chord with all but the 19% of Americans who approve of the job that "Congressional Republicans" are doing about the deficit. The timing is a political win for the Democrats; not for cynical electoral reasons, but because it will force Boehner and McConnell's hand-picked negotiators to make popular concessions. Most Americans support a mix of restored revenue and spending cuts (when asked, most think the Foreign Aid budget is a whole lot bigger honey pot than it is). The 2011 elections are mostly gubernatorial affairs in Southern States, but you can expect lots of discussion about what exactly is wrong with Washington.

More importantly, the cutting spending debate is postponed until after the budget for the fiscal year is due in September. Better to group the cutting debate and count those spending reductions in both the budget legislation and the Special Committee's bill.

Perhaps the second big detail is the politics around the triggered cuts. If either side gets painted as rooting for $1.8+ trillion in cut backs in social security, medicare, and defense, the party will have a long road back from the wilderness. This is a very potent trigger politically. Conservative groups were able to win many public concessions from the White House with escalating rhetoric and shape the debate on tax cuts. They hemorrhaged support from people paying attention to the process, then when the process reached a fevered pitch, lower-information political actors began tuning in. Opinion makers in communities (both media and social) shared their revulsion of over Republican. Public opinion turned. Leading the evening news for four weeks straight tends to build public interest.

The problem for John Boehner, and therefore the public fisc, is whether the House Republican negotiators can represent Boehner's interest in the negotiations (i.e. not killing the Republican brand). Many of the Tea Party freshmen did not plan on running for reelection (although that usually changes). Many of them have no more allegiance to the Republican leadership than they do to President Obama. This is an easy group to avoid, and seniority will certainly be a factor in who is picked for the Special Committee. What will be difficult is preventing the emboldened, tone deaf conservative base (see: Club for Growth) from pressuring the Special Committee members. Even many party stalwarts believe they are vulnerable to a right-wing challenger, and even non-Tea Party aligned Republicans are making extraordinarily conservative votes. If Boehner further insulates the committee by putting enough retiring House Members on it, it loses its actual political feet within the Republican caucus. I'm not confident that after three more months of bruising targeting from the Club for Growth, Michele Bachmann, and Jim Demint, there would be enough Republicans willing to vote for the Special Committee's debt pressure. Certainly they'll be opening up themselves to attack from the center, but in the post-2010 climate, most Republican incumbents are more immediately concerned about being primaried.

One name also hasn't come up much recently: Mitch McConnell. Both the Senate Minority leader and the House Speaker know that come November 2012, McConnell will almost assuredly be the Majority leader and Boehner, if he still is in the House, may not be in the majority or the leadership. This provides some very different incentives for Boehner's bridge partner.

Update: another account of the Senate deal includes a "No new revenue" bullet point. Of course, that all depends on how people decide to count 'revenue.' The last time anybody checked, tax credits are on the spending side of the ledger. Knocking out tax credits for mortgagstoes of second homes, corporate jets, or ethanol would be cutting spending. Depending on what "New" means exactly, we could restore the tax code to the 1998 edition, and the additional revenue might not be 'New.' "No new taxes" is as meaningless as talking point as it was in 1988.

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