The details are still rolling in, and probably will be for the better part of Monday. But based on what we know now, House Republicans drove the harder bargain on the debt-ceiling deal. (See the White House’s talking points here and Speaker John Boehner’s, via Hot Air, here — and note right off the bat a discrepancy in how they’re describing the stages in which the ceiling will rise.)
There was a lot of hand-wringing over the past couple of weeks that the federal government might default. For the most part, I think it was overblown. And that’s not just because a failure to reach a deal probably would have resulted in something more akin to a partial government shutdown than an actual default. I just don’t think there were enough members of Congress prepared to take the chance of finding out exactly how that result would have played out. (Here, a knock-on-wood acknowledgment the House and Senate rank and file still have to ratify this deal struck by their leaders.) Nor do I think President Obama was really going to veto any bill that actually came to his desk.
All that said, the bill that’s poised to arrive at the Oval Office looks a heckuva lot more like what the House GOP demanded than the clean bill Obama first requested, or the “balanced [read: tax-laden] approach” he later championed.
It doesn’t give him the entire debt-ceiling increase in one fell swoop, just an initial increase and a framework for further ones. This won’t be the last we hear of the debt ceiling during his presidency.
Each increase in the debt ceiling must be accompanied by dollar-for-dollar cuts, as Boehner insisted at the beginning of these negotiations. Yes, the 10-year time frame for the cuts looks wimpy compared to the immediacy of the new borrowing authority, but that’s all the more reason why it was silly for Democrats to object to Boehner’s requirement all along.
It doesn’t envision any tax increases. While there will be a bipartisan joint committee of Congress to recommend further measures, some of which in theory could be tax increases, it’s very unlikely to produce anything that goes beyond returning to Clinton-era tax rates because of the way those measures must be scored. And even returning to those tax rates will be the subject of continuing, intense debate between now and November 2012 (and probably afterward, too).
It does include the threat of steep defense cuts — but the cuts on that side of the ledger reportedly could include reductions to foreign aid and homeland security. So, there’s still some wiggle room for hawks even as some kind of further cuts are reinforced.
It includes a vote on a balanced budget amendment to the Constitution. That vote will probably fail in the Senate, but it’s interesting that the vote must come between Oct. 1 and Dec. 31, with the joint committee’s recommendations due by Nov. 23. If the recommendations are unpopular, could there be a push for the BBA in their place? Probably not, but the time frame here is intriguing.
Are there flaws in the agreement? Of course. I’ve already mentioned the differences in time frames between the new borrowing authority and the spending cuts. Describing the cuts as “cuts” is also somewhat inaccurate: We’re really talking about reductions from the Congressional Budget Office’s baseline, which means we’re talking about smaller future spending increases rather than actual cuts. (Another reason all the Democratic howling about painful cuts was ridiculous.) And it’s always possible that Congress will find a way to punt rather than follow through on the bulk of this deal.
In the end, however, it’s pretty clear that the compromise went like this: The president gets more borrowing authority; the House gets some further momentum toward cutting spending, which originally seemed unlikely to come from the debt-ceiling debate; and the Senate put the brakes on what the House wanted just a bit.
I won’t presume to tell liberals how to interpret this deal. My guess: They’ll just try to claim victory for preventing the wild-eyed tea partyers in the House from sending the country into financial oblivion, rather than trying to justify the deal itself.
But, assuming there are no less-satisfactory details to emerge, I think conservatives ought to accept the deal as the best that could be expected given the current distribution of power in Washington — and as motivation to keep the pressure on lawmakers going forward.
– By Kyle Wingfield