Hoagie Summit

Partisan Discord at Obama Budget Meeting: GOP Faces Uphill Debt Battle

Patricia Murphy reports on how the Democrats are in the driver’s seat for this year’s debt showdown.

Pablo Martinez Monsivais / AP Photo

Washington Republicans found themselves between a hoagie and a hard place on Wednesday, as they laid down demands for spending cuts at the White House over sandwiches but came away further than ever from getting a deal for the carved-down federal budget they’re looking for.

The White House hoagie huddle came on the second straight day of budget battles in Washington, with the Senate voting down four separate budget blueprints, including the president’s proposal and the GOP plan from Rep. Paul Ryan. Hours earlier at the White House, Obama hosted a meeting about the looming budget impasse with GOP and Democratic congressional leaders, in which the only agreement was a bipartisan thumbs-up for the sandwiches the president brought back from a local shop for lunch.

Republican and Democratic aides even disagreed over the level of disagreement about the budget during the conversation between the president and House Speaker John Boehner. An aide to Boehner said the speaker enjoyed the hoagies but indicated that the conversation grew contentious when Boehner reiterated Republicans’ unwillingness to go along with any tax increases in the future, as well as his plan to seek trillions in spending cuts in exchange for an increase in the debt ceiling, which the country will reach at the end of the year.

But White House press secretary Jay Carney called the meeting “congenial,” although he agreed that no common ground emerged from the conversation. “You have to ask the speaker of the House whether or not he intends or he believes that it is the right thing to do for the American people or the American economy to play chicken with the full faith and credit of the United States of America,” he said.

If Democrats and Republicans talking past each other while the country hurtles toward financial catastrophe seems like déjà vu all over again, it is. And it isn’t. Because while last year’s debt deadline required the president to convince his fellow Democrats to extend the Bush tax cuts and go along with spending cuts to get GOP agreement on the debt ceiling, Congress has already agreed to many of the changes that Democrats want this time around, including the end of the Bush tax cuts and cuts to defense spending.

In other words, if Congress lives up to its recent reputation as a do-nothing body, and does absolutely nothing, Democrats like Minority Leader Nancy Pelosi will have already gotten much of what they wanted. Without new laws being passed by both the House and Senate, the Bush tax cuts will end Dec. 31 and large defense cuts, which Republicans agreed to last year but are now trying to unwind, go into effect Jan. 1, 2013.

When The Daily Beast recently asked Pelosi why so few members of Congress seem interested in debating the expiration of the payroll-tax cut, unemployment insurance, the Bush tax cuts, and a number of other expiring provisions, she said the hope is for the economy to improve to make some items like the payroll tax cut unnecessary by January, although Congress would evaluate the strength of the economy in December to make a final decision.

“As for the Bush tax cuts, they expire. There is no need to have any discussion about that,” Pelosi said. “They expire.”

With current law on their side, Democrats undoubtedly have the upper hand in the year-end debt negotiations for now. Although they’ll still need House Republicans to agree to increase the nation’s debt limit, Republicans’ threat from last year of doing nothing will only guarantee an outcome that most Democrats can more than live with.

Just one event could change that—the November elections. If Republicans retake the Senate and the White House, they will be free to convene the 113th Congress as soon as President Romney takes office and pass their own bills to restore the defense cuts and remake some sort of tax package that looks like the Bush-era tax rates, if a handful of moderate Democratic senators go along with the idea.

But November is a lifetime away in political terms, and the country will be facing a default at the end of the year no matter who wins the elections.

Democrats and Republicans, most likely in the lame-duck session in November and December, will have to find a way to approve an increase to the debt, but Republicans will have less to bring to the negotiating table than they did last year with a newly elected House majority and an American public that did not quite believe either party would push the country’s credit to the brink.

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Pelosi left the hoagie summit Wednesday saying she was happy the speaker enjoyed the sandwiches, but not with much else she heard in the meeting.

“You can’t say, ‘Unless I have more savings than are even in the increase, that will draw a line in the sand, and we will not lift the debt limit,’” Pelosi told reporters. “It’s irresponsible. It’s immature. It’s not honoring the full faith and credit of the United States of America.”