Washington’s Next Debt Showdown
“Fortunately, the ugly part of the process is behind us.” – Rep. Judy Biggert, R-Ill.
Congress is in a good mood this week, having finally emerged from a seemingly existential struggle over spending, taxing, and paying America’s debts. Morale on Capitol Hill soared even higher with the poignant return of Gabrielle Giffords to the House floor. But nobody should start feeling too warm and fuzzy about our leaders. This whole thing is about to start all over again.
The compromise plan that is making its way to President Obama’s desk will remove the threat of default and its potential to further weaken the economy. But it also revives the debate that just ended, with Thanksgiving and Christmas deadlines to boot. That’s no doubt meant to put pressure on negotiators, but it's a good bet the time frame will end up ruining both holidays.
Phase one of the two-step deficit-reduction deal involves about $1 trillion in spending cuts. That’s simple compared with phase two—the one with the holiday deadlines—in which a 12-member bipartisan committee of senators and House members is supposed to come up with $1.5 trillion in further deficit reduction.
The third rails of each party—tax hikes and entitlement cuts—are now charged and dangerous. Will Republicans go for tax reform that yields additional money for the government? Will Democrats allow entitlement reform that reduces future Medicare or Social Security benefits? Will “my way or the highway” be preferable to automatic cuts in defense and Medicare that would be triggered by failure? And how will all this play out the year before a presidential election?
A word to future supercommittee members as you ponder how to proceed: You’re starting out in a deep hole. The public has been focused to an unusual degree on Congress for the last several weeks. The result is rock-bottom approval ratings and an image nobody wants to own.
The Pew Research Center released findings this week headlined “Public Sees Budget Negotiations as ‘Ridiculous’, ‘Disgusting’, ‘Stupid’–Leaders’ Images Tarnished.” Congressional Republicans are No. 1 when it comes to losing ground in the court of public opinion.
Democratic strategist Mark Mellman says there is potential for the bipartisan committee to conclude, as several bipartisan debt commissions did, that both spending cuts and new tax revenues are needed to ease ongoing structural deficits. But there’s a catch: It may need to ditch the circus atmosphere for an ivory tower.
“There’s going to have to be further compromise in the context of sober reflection,” preferably in a closed room without hourly pronouncements for the TV cameras, Mellman says. “Presumably, they are not going to send out press releases every day or make speeches every day about what’s wrong with the other guy. The discussion will be somewhat submerged for a while.”
Possible? Maybe. Probable? Maybe not.
“I think it’s going to be pretty rough,” says Republican strategist John Feehery, once a senior aide to former speaker Denny Hastert. For a start, Feehery predicts, lobbyists will spend the next few months in a frantic state. “There are a lot of interests that are going to get skewered if they don’t act,” he says.
Furthermore, Feehery says, Democrats will resist entitlement reform and Republicans won’t want to give Obama a victory on tax reform as he’s gearing up for reelection. “It doesn’t make sense,” he says. “If the president gets reelected, you do it then. If he doesn’t, then you make a deal with a Republican president.”
Clues to potential strife or harmony will come in the next two weeks as House Speaker John Boehner, House Democratic leader Nancy Pelosi, Senate Majority Leader Harry Reid, and Senate Republican leader Mitch McConnell select their three committee members apiece. In the Senate in particular, each party has members who have indicated they are not wedded to party orthodoxy. Some, such as Republican Tom Coburn and Democrat Dick Durbin, were members of a bipartisan deficit commission who concluded that both entitlement cuts and new tax revenue are needed to control the debt.
Feehery predicts Republicans won’t name people like that to the special committee. “I’m pretty sure neither Boehner nor McConnell is going to put anyone out there who might possibly go wobbly on taxes,” he says. “I don’t think Coburn will be one of the three. I like Tom Coburn. I like what he did, but I just don’t know if McConnell wants to take that fight on.”
Reid suggested Monday that he is not inclined to name anyone whose views are already known. “It’s extremely important that I pick people who are willing to make hard choices but are not locked in,” he told reporters at the Capitol. “I think it doesn’t bode well for me to choose somebody that the world knows how they feel about it before they go into it.”
Are there a dozen lawmakers in Washington who haven’t made clear how they feel about taxes, Medicare, or Social Security? Between votes, pledges, speeches, interviews, press releases, Facebook, and Twitter, that seems unlikely. It’ll be interesting to see who Reid comes up with.
Before Congress had started voting on the plan that creates the committee, much less anyone being named to it, there were signs that the last round of contentiousness would morph seamlessly into the next. Boehner and other Republicans insisted they had cut off any means for the White House to try to raise taxes. White House Press Secretary Jay Carney called the assertion flat-out false.
It’s hard to know if Boehner’s hardline rhetoric was meant to convince conservatives that he’d negotiated a good deal for them, or if it foreshadowed his appointment of inflexible negotiators to a committee tasked with drawing up Grand Bargain Part Deux. If the latter, this could devolve into arguments over everything from the role of government to the shape of the negotiating table. If the former, there may yet be room for some creativity and compromise.
Before every session, everyone on that committee ought to read Gabby Giffords’ statement of support for the debt deal.
“I strongly believe that crossing the aisle for the good of the American people is more important than party politics. I had to be here for this vote,” Giffords declared.
The commission members should also watch the video of her valiant appearance amid the hugs, cheers, and tears of her colleagues. They'll be reminded that they have an important task. They shouldn’t let her, or the rest of America, down.