No ‘grand bargain’ on the debt ceiling

What happened

Negotiations over raising the nation’s debt ceiling failed to break a partisan deadlock this week, as Republicans rejected President Obama’s offer to forge a “grand bargain” that would cut $4 trillion from the deficit over 10 years through spending cuts, Social Security and Medicare reform, and tax increases. House Speaker John Boehner (R-Ohio) initially seemed open to Obama’s offer, but pulled out of talks last weekend when his caucus objected to raising about $1 trillion in new revenue over a decade by removing tax breaks for oil companies, corporate-jet owners, and hedge-fund managers. “Washington has a spending problem,” Boehner said. “We don’t have a revenue problem.” Republicans are now seeking a smaller deal to cut $2.5 trillion in spending without any revenue increases, but the president was holding out for a “big deal” to repair the nation’s long-term fiscal imbalance. “We might as well do it now, pull off the Band-Aid, eat our peas,” Obama said.

With no sign the impasse will be broken, Mitch McConnell, the Senate minority leader, proposed a “last-chance option” to stave off government default. His plan would give the president authority to raise the debt ceiling in three smaller increments over the course of the year, without congressional approval. That would put the burden of responsibility for raising the nation’s debt squarely on Obama. The president dismissed the offer as “partisan politics,” and warned that if Congress fails to raise the debt ceiling by Aug. 2, and the government goes into its first default in history, checks might not go out to recipients of Social Security, military pensions, and other government benefits.

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What the editorials said

If you’re wondering who is responsible for this mess, said The Boston Globe, blame the voters. If either party “touches entitlements”—George W. Bush in 2006, congressional Democrats with Obama’s health-care-reform plan in 2010—they lose the following election, and the reckless spending goes on. And whenever a minority party takes a “strictly obstructionist” position, as the Republicans did last year, the voters reward them for it.

Obama’s “grand bargain” was a trap, said The Wall Street Journal. Obama claims he’s willing to cut entitlements, but he has taken what may be the costliest one of all—Obamacare—“off the table.” To pay for that Big Government boondoggle, Democrats snuck in $900 billion in new, health-care-related taxes over the next decade. And now Obama wants to add $1 trillion in additional taxes by closing so-called loopholes? Forget it.

What the columnists said

It’s become fashionable to say “both sides are equally at fault” for the deadlock, said Eugene Robinson in The Washington Post. “This is patently false.” Obama proposed around three dollars’ worth of budget cuts for every dollar of new revenue, and still Republicans rejected the offer. The GOP deserves the blame here, for taking the absurd position “that not a cent in new revenue can be raised,” even if it’s by closing loopholes for the richest Americans.

Clearly, “no deal is possible,” said John Podhoretz in CommentaryMagazine.com. That being the case, Republicans should embrace McConnell’s “fiendishly clever” proposal. It allows the GOP to claim responsibility for breaking the deadlock, and also to attack Obama for the ever-increasing debt ceiling right up until the 2012 elections. If it had been up to Boehner and Obama alone, said David Brooks in The New York Times, that big deal would have been possible. They both understand “you need bipartisan cover if you really want to cut spending” and reform entitlements and the tax code. Sadly, “they are bracketed on all sides” by partisan extremists who see politics as warfare.

It really is starting to look like a stalemate, said Ezra Klein in The Washington Post. With Republicans digging in their heels on tax increases, and Obama refusing to cut spending without some increase in revenues, only two developments can force someone to blink: “public fury arising out of a government shutdown, or a market panic arising out of near-default.”