Let’s Make A Deal
Josh Marshall helpfully lays out the four options for resolving the debt ceiling fight…and why each seems impossible. He calls them:
The Grand Bargain: This was the $4T in cuts proposed by Obama, entertained by John Boehner and rejected by Eric Cantor because it contained some modest revenue increases. It would have done the most to seriously address the deficit, but fails the Grover Norquist test.
The Less Grand Bargain: This gives Obama $2.4T in short-term borrowing authority to raise the debt ceiling, but Republicans insist every penny be matched by offsetting cuts over the next decade, with no revenue increases. Obama is willing to consider this, but not if all saving is achieved through cuts. This one appears to be a non-starter.
La Petite Deal: $1.5 T increase in the debt ceiling, offset dollar for dollar by deep cuts that everybody already basically agrees to. However, this carries the nation only for one year, and means the next debt ceiling fight occurs right before the presidential election… something nobody wants.
The McConnell-Reid Escape Hatch (which is so complex I won’t even try to summarize, I’ll just quote Josh Marshall):
McConnell and Reid are talking about raising the debt limit, potentially into 2013, by mixing the spending cuts in “Le Petite Deal” with a commitment to convene a Congressional committee tasked with cutting trillions from the deficit — including from entitlement programs. If the panel passed such a plan, the legislation would be guaranteed votes in the House and Senate before year’s end. The exact contours of the McConnell-Reid plan are still being worked out, but it’s the only proposal out there that would give everybody the cover they think they need, and result in the spending cuts both parties say they want. But it would either require Republicans to relent on the dollar-for-dollar standard, or else a bit of choreography: The cuts, aides say, could be paired with a procedural mechanism that would also allow Republicans to vote to block a higher debt limit. But Obama would be able to veto that move, thus assuring that (a) spending gets cut, (b) Republicans claim to have opposed raising the debt limit, (c) Democrats claim to have voted for deficit reduction, and (d) the country avoids default.…at a price unknown.
So there are the current options. What do you think the final deal is going to look like.. and why?