Another try for a Grand Bargain

What happened

Congressional Republicans and Democrats began preparing for the opening next week of major budget negotiations that will show whether the two parties can forge a Grand Bargain over taxes, spending, entitlement reform, and the mandatory cuts known as the sequester. Senate Minority Leader Mitch McConnell said that whether the GOP reaches a broad agreement with Democrats, the party had learned its lesson over tactics. “There will not be another government shutdown,” he said. “You can count on that.” A Washington Post/ABC News poll released this week found that 53 percent of Americans blamed the Republicans for the shutdown, against 29 percent who blamed President Obama. Sen. Lindsey Graham (R-S.C.) called the impact of the shutdown a “wake-up call” for the party. “This was a political gift to the president by the Republican Party at a time he needed it most,” he said.

The bicameral talks on spending cuts will be led by Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.). Under terms of a deal passed last week, the conference must agree on a spending bill by Dec. 13, and Congress must pass it before government funding runs out on Jan. 15. Obama said he was willing to make concessions on entitlement reform and spending if Republicans would meet him halfway and agree to raise additional revenue by closing tax loopholes for the rich. “I will look for willing partners wherever I can to get important work done,” he said.

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What the editorials said

The Republican Party has been “chastened by its disastrous provocation of a government shutdown,” said The Washington Post, making a budget deal more likely than ever before. And the conditions for a Grand Bargain do exist. The GOP must agree to relax the across-the-board sequester cuts to domestic programs agreed to as part of the 2011 debt ceiling deal. In exchange, Democrats must accept Medicare and Social Security reforms previously suggested by the president—a change in how inflation is calculated, for example, or means testing. Such a compromise could finally produce the “fiscal bargain America needs.”

A deal can be reached only if Democrats drop the demands for new revenue, said The Wall Street Journal. Taxes already rose for all working Americans on Jan. 1, and Republicans will stand firm against any further increase. The president holding out for higher taxes is just as pointless as the GOP insisting that Obama defund the health-care law. “It will kill any deal.”

What the columnists said

Republicans have the “upper hand” in these negotiations, said Fred Barnes in The Wall Street Journal. The sequester cuts already reduced spending by $84 billion this year and will cut another $109 billion in 2014. It’s true that next year’s cuts “take a huge bite out of Pentagon spending,” which many Republicans rightly feel may degrade military readiness. But the sequester’s “value as a political instrument” is immense; if Democrats insist on new taxes or refuse to cut entitlements, Republicans can just “sit on their hands” and watch spending drop.

That’s a bluff, said Jonathan Chait in NYMag.com. Not too long ago, Republicans considered the sequester a “horror show,” with House Speaker John Boehner criticizing its “meat ax approach” to spending cuts. What makes the GOP think Obama will willingly agree to cut trillions of dollars from Social Security and Medicare—“programs so popular Republicans would never dare enact the cuts themselves”—in exchange for a few billion dollars in immediate spending increases that the GOP actually wants? There’s no way Obama will take this “terrible, terrible deal.”

So forget a Grand Bargain, said Robert Robb in the Phoenix Arizona Republic. The GOP will inevitably overreach in negotiations, while the Democrats will refuse to cut entitlements without their “nonstarter” demand for tax increases. In the Senate, Democrats might work with hawkish Republicans to relax the sequester on military spending, but that proposal will flounder in the House, “where deficit hawks overwhelmingly outnumber defense hawks.” Even a minibargain is too much to hope for in these polarized times. “The more likely scenario is an impasse even more prolonged and difficult to bridge.”