What happened yesterday that created the public disruption in talks between President Obama and John Boehner on the debt ceiling and deficit reduction? Pretty clearly, this was the only substantive impact of the Gang of Six’s intrusion on the issue. Their proposal has turned out to be vaporware — it doesn’t actually address the debt ceiling, for one thing, and they don’t have an actual plan, either, not one that commits to language that can be scored. However, it provided enough of a distraction to allow Obama to shift the goalposts on revenue halfway down the field, as Jim Pethokoukis reports from sources on the Hill:
We never had agreement on a revenue number. But the WH did demand more revenue post gang of 6 – a lot more revenue. Entitlements [changes included] Medicare raising age, significant savings, combining Medicare parts A and B, means testing. Also chain cpi on social security and additional savings. GOP proposed over 200 billion in medicaid savings, WH up to 120. But n agreement on$800 billion. But there would have been tax reform and 3 flat rates – broadened base, lower rates. WH wanted higher rates post gang. …
Despite what WH briefers may be saying, any new revenue in the framework would NOT have been generated by letting the current tax rates expire. That is simply false. Under the framework discussed, a CEILING was agreed upon that could generate $800 billion in new revenue over ten years. This would be done through comprehensive tax reform that would clear out deductions, credits, and loopholes in the system – and spur economic growth. After the gang of six plan came out, the White House moved the goal posts and insisted on $400 billion more in higher taxes – a 50% increase in revenue – and wanted that to be the FLOOR instead of the ceiling. The President acknowledged this in his remarks tonight. “Letting tax cuts expire” was never part of the tax reform agreed to.
As much as I like Senator Tom Coburn, some of the blame for this nonsense belongs to him. Early this week, he laid out what I believe is the best, most comprehensive plan for dealing with the deficit, which would have cut $9 trillion over the next decade and put the US firmly on the path to right-sizing the government. Instead of sticking with that, though, Coburn threw in with the Go-6 the very next day, even though the Go-6 plan didn’t really exist in any meaningful form. That was enough for the Go-6 to grab headlines and to seemingly weaken Boehner’s position. In the end, however, the Go-6 group had to admit that they had no real plan and that they wouldn’t for months, making them irrelevant.
Of course, that didn’t mean that Obama had to give up that apparent advantage, even though there would be no way to use the Go-6 to meet his own announced deadline on the debt ceiling. He stuck to his guns, but so did Boehner. When it became clear that the goalposts would not be moved back, Boehner publicly dismissed the President to focus on Harry Reid instead — and that caused Obama to have his temper tantrum at the podium last night.
All of this was entirely predictable after the Go-6 entry, and so is what will happen next. Despite all of the charges and countercharges yesterday, the talks will go on, this time with public postures clarified. I had dinner with friends last night, one of whom remarked that it was unbelievable that the two sides couldn’t sit down and talk things through rather than just rely on party positions. I replied that there were actual principles at stake on both sides, not just party gaming, but that appearances aren’t what they seem anyway. In reality, Boehner has no one else but Obama and Reid with whom to negotiate, and Obama and Reid have no one but Boehner. They’re stuck with each other, and they all know that some agreement has to be reached shortly. The strategic and tactical advantage goes to Boehner, however, who has an opportunity to divide Reid and Obama, while the two Democrats have no one but Boehner with whom to deal.
At The Corner, Robert Costa hears much the same thing from former Rep. Tom Reynolds:
Former New York congressman Tom Reynolds, a past chairman of the National Republican Congressional Committee, tells me that the big takeaway from tonight’s dueling press conferences is that the talks are still on. Yes, Reynolds says, the negotiations have collapsed, but with party leaders meeting tomorrow at the White House, it is clear that both sides are still looking to deal and used tonight to draw fresh lines in the sand.
“There are still options and opportunity,” Reynolds says. Moving ahead, however, “Boehner is going to have some challenging times. He is one leg of a three-legged stool, surrounded by big-spending liberals, and now the fight has gone public.”
Reynolds says the “grand bargain” may be dead (again), but some bargain will be reached. Last night’s pas de deux gave Boehner a chance to reset the dynamic after the Go-6 intervention. We’ll see if goalposts start shifting back this weekend.