With just a week to go before a potentially ruinous U.S. government default, the partisan war over raising the federal debt ceiling ground on in Washington on Tuesday.
But judging by the latest plans advanced by Senate Majority Leader Harry M. Reid (D-Nev.) and House Speaker John A. Boehner (R-Ohio), both sides appear to have substantially conceded.
The two plans
Speaker of the House John Boehner is back defending a GOP plan to raise the national debt ceiling this year and revisit the issue in the spring. (July 26)
Everything you need to know about the debt ceiling
The big question is whether these concessions constitute reasoned compromises or weary capitulation.
President Obama devoted most of his remarks in a prime-time address Monday to the idea that the wealthy need to pay higher taxes to reduce the debt. And yet, Reid’s proposal to lift the $14.3 trillion debt ceiling by $2.7 trillion — an idea the president supports — closes no tax loopholes and asks corporations to pay no more.
On the other side of the fence, Republicans swept the 2010 midterm elections by promising they would never raise the debt ceiling without major changes to the way Washington works. In a response to Obama’s speech Monday, Boehner praised a stalled measure that would have required Congress to pass a balanced-budget amendment to the Constitution before the borrowing limit could rise.
Boehner’s proposal calls for $1.2 trillion in cuts to agency spending over the next 10 years — the same figure adopted by Reid — in exchange for raising the debt ceiling for a few months. It would require a vote on the balanced-budget amendment but not its passage.
Late Tuesday, the Congressional Budget Office announced that Boehner’s proposal might cut only about $850 billion in discretionary spending over 10 years. The speaker’s office said the bill will be reworked to hit the $1.2 trillion target.
“We’re here to change Washington — no more smoke and mirrors, no more ‘phantom cuts,’ ” said Boehner spokesman Michael Steel. “We promised that we will cut spending more than we increase the debt limit — with no tax hikes — and we will keep that promise.”
Broader, more difficult changes would be left to a congressional committee tasked with finding the agreement that has eluded a divided Washington and trimming $1.8 trillion more.
“These are both pretty sad,” said Michael Tanner, a senior fellow at the Cato Institute. “We’re down to fifth- and sixth-best options now. When you get down there, you take what you can get.”
Analysts who have examined the Reid and Boehner plans said Tuesday it is striking how similar they are.
“It does seem like if there’s a will to get to an agreement, there’s a path,” said Ed Lorenzen, a policy adviser for the Committee for a Responsible Federal Budget.
The one big difference is in the groundwork each side is laying for future fights. Boehner’s plan would allow the debt ceiling to rise by just $900 billion now, forcing Congress to make further cuts before the president could lift it again sometime next year. Reid’s proposal would raise the limit enough to last through the 2012 election.
Both plans offer a series of legal limits on “discretionary” federal spending, which is the category that includes federal agencies. Each party says these reductions would amount to $1.2 trillion over 10 years, but neither bill, for the most part, specifies what would be cut.
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