Throughout the afternoon, details kept leaking. President Barack
Obama and House Speaker John Boehner were “starting to close in on
a major budget deal,” reported
the New York Times, citing unnamed sources close to
Democratic congressional leaders. The Obama-Boehner pact would
include “$3 trillion in spending cuts over 10 years to avert an
unprecedented U.S. default,” a “senior Democratic congressional
aide” told Reuters.
Cue jokes about “Denial” being more than a river in Egypt. “We
are not close to a deal,” White House spokesman Jay Carney said
Thursday. “There is no deal,” Boehner told Rush Limbaugh,
reiterating his support of the House-passed Cut, Cap and Balance
plan.
As we go to press, rumors swirl that we stand at the precipice
of a major bipartisan agreement that would rein in entitlement
spending, pave the way for tax reform, and increase the debt
ceiling with no guarantee of tax hikes. One would think both the
president and the speaker would be hailing this as a major
victory.
Yet it remains the deal that dare not speak its name.
Why? In part because restive liberals could object to any
meaningful spending cuts outside the Pentagon and demand tax
increases in a fragile economy. Democratic leaders also object to
their exclusion from the talks that reportedly produced the
deal.
But let’s face it: disenchanted liberals have yet to stand in
the way of any deal Obama has had to strike, from the continuation
of Bush’s wars and tax cuts to the dropping of the public option
from the health care bill.
The greater risk is that conservatives in Boehner’s House will
torpedo the plan. Many of them campaigned in favor of serious
spending cuts. A majority took the Taxpayer Protection
Pledge, which could be violated if loophole closings aren’t
matched dollar-for-dollar by marginal rate cuts. Some don’t even
think the version of Cut, Cap and Balance that passed the House
goes far enough. A few oppose raising the debt ceiling under any
attainable circumstances.
Conservatives will be wary of any “balanced plan,” for by
balanced the president does not mean balanced budgets. That is code
for revenue raisers and enhancements, among other euphemisms for
tax increases. The history of bipartisan betrayals is long and
baleful.
We are constantly reminded that in 1982, Ronald Reagan raised
taxes as part of a deficit-reduction deal with congressional
Democrats. He believed he had achieved $3 in spending cuts for
every $1 in tax increases. Reagan later lamented, “Congress never
cut spending by even one penny.”
Eight years later, George Bush accepted tax increases as part of
a similar deal. He was promised $2 in spending cuts for every $1 in
tax hikes. Instead all $137 billion of the tax increases happened
but spending went up $22 billion over the baseline. The actual
spending cuts came from the defense budget. At the end of the
five-year budget window, non-defense spending was $91 billion
higher than what the Congressional Budget Office had projected
before the 1990 agreement was reached.
As recently as April, Republicans accepted a deal to avoid a
government shutdown. There were no tax increases this time, but
precious little in the way of spending cuts either. First it was
advertised as cutting $38 billion out of $3.8 trillion. Then the
CBO later found the bipartisan agreement reduced this year’s
deficit by a mere $352 million.
But it is the memory of the 1990 budget agreement that lingers
the longest. For not only did it help usher “Read My Lips” Bush out
of office, but it fueled the rise of Newt Gingrich, who opposed the
tax increase, and the fall of then House Republican leader Bob
Michel, who dutifully supported it. There is no shortage of
conservatives in the House who would relish the opportunity to play
Newt to Boehner’s Bob Michel.
Boehner is no Michel, obviously. He is better trusted by members
of the House Republican Conference than some potential Gingriches.
But he was clear in his interview with Rush Limbaugh that he does
not believe the United States can risk default by not raising the
debt ceiling. Since that’s how the speaker sees the stakes, he is
likely to cut a deal with Obama in the end, even if he needs some
Democratic votes to pass it.
There’s an old, possibly apocryphal story about a Republican
congressional aide who told a group of visiting Russian legislators
that the U.S. has a two-party system divided between the Stupid
Party and the Evil Party. “Periodically, the two parties get
together and do something stupid and evil,” the aide is supposed to
have said. “That is called bipartisanship.”
That tale captures the mood of many Republicans right now and
the hurdle Boehner will have to clear in selling them any deal with
Obama.
