Here’s the Deal
It was a nail-biter up until the final vote, but on Monday, August 1, just hours before the Treasury-imposed deadline, the House passed legislation allowing for an increase in the debt ceiling.
The House voted 269–161 to pass the bill, once called “An Original Bill to Make a Technical Amendment to the Education Sciences Reform Act of 2002″ but now gutted and reborn as the Debt Control Act of 2011. (Roll call votes at the embedded link.) As of this writing, the Senate has scheduled a vote for noon Tuesday August 2, but passage is virtually certain.
As I watched the drama unfold, first from an unfamiliar hotel room and then in an airport waiting area, I found myself asking two questions.
1. How did this come to pass? What were the House whips doing?
2. What’s in the deal?
So, here’s the deal.
By noon Monday, Nate Silver was suggesting that the bill might fail in the House by a narrow margin, 212–219. Minority Leader Pelosi, who as a smart politician was keeping her powder dry, and her second-in-command, Minority Whip Steny Hoyer, both threw their full support behind the bill in the debate on the House floor. In just three hours, that brought the whip count to 225 yeas (Silver) or 252 yeas (The Hill). Nate thought the 252 an over-estimate, but in the event, it was an under-estimate.
There may have also been a groundswell because of the return of Rep. Gabrielle Giffords (D-Arizona), who re-entered the House to thunderous applause and voted with the yeas. Clearly, the Democrats pulled out all the stops to make this happen.
What fascinated me was that rarity of recent days, where the two whips, on either side of the aisle, must have been in constant communication to ensure the measure had a sufficient number of yeas. Measures like PPACA had only one party’s support, so there was no need (for example) for the Democratic whips to know what the Republican whips were doing, since they’d assume the minority party was agin whatever was proposed. Similarly, in the 112th Congress, the Republican whips have not needed to consult with Democratic whips. But this process must have required a sort of bipartisan coöperation so that disaster could be averted. Clearly, many of the Democrats and Republicans were released to vote their conscience, or at least vote strategically. Republicans voted 174–66 in favor of the bill (slightly under The Hill’s final whip count), while Democrats split evenly at 95–95 (outperforming The Hill’s final whip count by 23 votes). The Tea Party Caucus members claimed before the vote that they would not approve a debt ceiling increase regardless of the circumstances. However, Tea Party Caucus members voted 32–28 in favor of the bill, indicating that a majority never really intended to kill the hostage in the first place. It was a bluff.
What’s in the proposal? The bill text may be found here.
For Herman Cain and others who don’t like reading legislation, former Biden advisor Jared Bernstein has blogged on what the bill means. There is a $2.4 trillion promise of reductions, but that’s over a ten-year span and I would consider such projections highly speculative. For fiscal 2012, which begins October 1, 2011, the promised reduction is a paltry $21 billion ($22 billion by some estimates, still not much). In 2013, a big jump to a $157 billion cut is mandated. Over the ten-year period, these cuts compound to over $2 trillion. These larger cuts are to be found by a bipartisan commission which has yet to be constituted.
There’s something for everyone to hate. For the Tea Party, there’s the specter of tax increases, or at least the expiration of Bush-era tax cuts, which are likely to be recommended by the bipartisan commission formed by the bill. For the left, there’s the feeling that President Obama totally capitulated to hostage-takers and predictions of a complete and utter destruction of the economy. Keynesian economists continue to insist that the economy may be driven into a second recession because of the reduction of economic stimulus. If this happens, the bill could increase rather than decrease the deficits by reducing revenue even more than spending. Bloomberg, not normally a left-leaning organization, also hates the deal. The Heritage Foundation really hates the automatic trigger provision.
Glenn Greenwald, who is well to the left of the President but a political pragmatist at heart, gives what I believe is a pretty good rundown of why the debt ceiling deal was not a capitulation by President Obama. As he says,
Obama’s so-called “bad negotiating” or “weakness” is actually “shrewd negotiation” because he’s getting what he actually wants (which, shockingly, is not always the same as what he publicly says he wants). In this case, what he wants — and has long wanted, as he’s said repeatedly in public — are drastic spending cuts. In other words, he’s willing — eager — to impose the “pain” Cohn describes on those who can least afford to bear it so that he can run for re-election as a compromise-brokering, trans-partisan deficit cutter willing to “take considerable heat from his own party.”
The bill establishes a bipartisan commission, six Democrats and six Republicans (a total of 12, with six from the House and six from the Senate), which will recommend the $1.2 trillion in promised cuts. If they fail to do so, then an automatic trigger cuts defense spending by about $50 billion (“defense” means Departments of Defense and Homeland Security under so-called Function 050) and non-defense discretionary spending by $50 billion. Medicaid, Social Security, Veterans benefits, and other entitlement/social programs would be exempt from these cuts.
Like the earlier Defense Base Realignment and Closure (BRAC) Commission, the “Super-Congress” recommendations would be subject to an up-or-down vote in both houses of Congress, without any possibility of amendments.
I’m guessing that the “Super-Congress” will necessarily use the Simpson-Bowles Commission recommendations as a starting point, given the limited amount of time available to them and the importance of the task. No one wants to see the automatic trigger take a meat cleaver to the budget. I think that’s what President Obama intends, as well. I tend to side with those that think he got the best deal possible, given the weak hand he was dealt.
- Pelosi’s Gutsy Stand (thedailybeast.com)
- House Passes Debt Limit Deal (huffingtonpost.com)
- House Democrats Not Whipping Debt Ceiling Bill (politicalwire.com)
- House of Representatives passes debt bill (guardian.co.uk)