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Right Turn
Posted at 09:33 AM ET, 07/07/2011

Debt-ceiling tussle

The Post reports today:

President Obama is pressing congressional leaders to consider a far-reaching debt-reduction plan that would force Democrats to accept major changes to Social Security and Medicare in exchange for Republican support for fresh tax revenue.
At a meeting with top House and Senate leaders set for Thursday morning, Obama plans to argue that a rare consensus has emerged about the size and scope of the nation’s budget problems and that policymakers should seize the moment to take dramatic action.

A Republican House aide confirms to me that Social Security is on the table, but muses, “I’m sure the White House is getting holy hell from their allies right now. Let’s see if they can stand fast.” Moreover, Ezra Klein’s suggestion that there is a “deal” between the White House and Speaker of the House John Boehner is wrong, says Boehner spokesman Michael Steel. “There has been a discussion of options. No ‘deal.’ We’ll discuss where we are with the [House Republican] Conference this morning.”

As for the tax issue, what has been portrayed as a split between House Majority Leader Rep. Eric Cantor (R-Va.) and Senate Republicans is nothing of the kind. Cantor’s office confirms that while Cantor might be open to closing loopholes, “Eric will not support a deal that raises taxes.” In short, if the White House is willing to trade loophole closings for cuts elsewhere, or better yet, comprehensive tax reform, there might be a deal.

Is there a deal in there somewhere? Not today. There are weeks of posturing to come. But the bottom line is that President Obama, both for economic reasons and his reelection prospects, needs a deal. Unless and until he gives up on the tax-hike fetish, he won’t get it. That said, he might come out smelling like a rose and go a long way toward ensuring his reelection if he agree to trillions in cuts and real Medicare and Social Security reform. To do that, however, would require that he go to war with his base. It is quite a conundrum, isn’t it?

By  |  09:33 AM ET, 07/07/2011

Categories:  Budget

 
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