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Should the United States fund the service program AmeriCorps? President Obama would increase its budget. Rep. Paul Ryan would eliminate federal funding for the program.

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Right Turn
Posted at 05:45 PM ET, 07/13/2011

How are those debt talks going?

The short answer is “badly.” A senior House Republican adviser said the McConnell backup plan “at this point just can’t pass the House. But, that could change as the markets get rockier and default gets closer. The Speaker will not drop the ‘cut more than you hike’ rule, which is an important component to remember as this plays out.” Well, at least there is a backup, because the main talks seems to be going nowhere.

Majority Leader Eric Cantor (R-Va.) put out a statement dismissing New York Sen. Chuck Schumer’s invitation to “step up to the plate” on taxes. Cantor wasn’t buying and fired back a response that read:

“Today we will continue meetings at the White House to try to find consensus surrounding the debt limit. Though none of the plans being discussed right now could garner the 218 votes needed for House passage, we have found areas of agreement. I am glad the President has finally agreed that Medicare as we know it will be bankrupt within 10 years unless we do something about it, and I am glad he has agreed that we need to address our debt crisis now. As we move forward in this debate, I would ask that we work in earnest on these areas of commonality instead of demanding that areas of agreement are tied to items of fundamental disagreement like raising taxes. The President refuses to compromise on the repeal of ObamaCare, and House Republicans refuse to raise taxes, so both have been ruled out. Further, the simple reality is that tax increases cannot pass the House, and the constant demand for them makes coalescing around any increase in the debt limit less likely.
“Currently, there is not a single debt limit proposal that can pass the House of Representatives, but I believe the path forward is to focus on what we can agree upon, and though it doesn’t go as far as our budget, House Republicans can likely agree with the general spending cuts and entitlement changes in the ‘big deal’ proposed by the President. That isn’t everything that we want, as the President’s proposal appears to be around $3 trillion in spending cuts, compared to the reforms and the more than $6 trillion in cuts House Republicans supported in the Ryan budget. I also believe that the President should release the basic framework and details of his spending cuts so that both Republicans and Democrats can make well informed decisions about something of this magnitude. To date, we have not seen the details of his plan and we must be able to — the stakes are too high for anything less.”

So we remain stuck. Obama won’t agree to significant cuts without tax hikes, while the Republicans won’t agree to tax hikes. If you ask House Republicans how this is going to work out, the honest ones will tell you, as one confided to me this afternoon, “I’ve got no clue.”

Right Turn guest blogger Matt Continetti speaks for many when he writes this week:

The chances of a reasonable deal seem to grow smaller every day. I’ve come to the conclusion that a clean debt ceiling increase that gets us through 2012 actually would be better than a bad deal that increases the debt ceiling, increases taxes, doubles down on Obamacare-style cuts to Medicare, guts defense spending, and promises across-the-board cuts to discretionary spending that can always be undone.
Maybe Obama will agree to a deal with spending reductions and mild changes in entitlements in exchange for raising the ceiling and closing that corporate jet loophole he keeps yapping about. That would at least allow us to move on to the fight over the fiscal year 2012 budget. If not, well, I’ll no longer disagree with the idea that America is in decline.

Eager bloggers and readers pepper me with suggestions to “put ObamaCare on the table.” After all, taxes are a nonstarter for Republicans, so why should Democrats have to deal with one of their dearest items? Fine. And then what? Obama and the Democrats aren’t going to play that game. We are stuck, plain and simple.

There are, I think, three likely outcomes. One is that Obama blinks on taxes, as he did in last year’s lame duck session. I rate the chances of that happening as slim. The second is that we hit “default” and everyone scrambles for a few days to, yes, get the Social Security checks out. Everyone is shaken and there is that “grand compromise.” I put the likelihood of that at close to zero. And finally, there is some other variation (McConnell’s or another backup plan) that avoids a default and does not force Republicans to vote for tax hikes. That seems the most likely for now.

The real solution is for the voters to participate in a great referendum. More government and tax hikes or less government and no tax hikes? That’s what the 2012 election will be about.

By  |  05:45 PM ET, 07/13/2011

Categories:  Budget

 
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