So House Majority Leader John Boehner has a debt reduction plan on the table. It is competing with Senate Majority Leader Harry Reid’s plan. (Notice how both sides are cutting President Obama out of the discussion.) Both plans cut spending by $1.2 trillion. Neither plan involves a tax increase. In fact, the two plans are extremely similar. Philip Klein gives us a useful comparison:
— Both plans claim to reduce discretionary spending by $1.2 trillion.
–Both plans create a joint, bipartisan, Congressional committee to find future savings.
— Neither plan includes specific entitlement reform.
–Neither plan includes specific tax increases.
— Reid’s plan wants to raise the debt ceiling all in one chunk (and boosts the claimed deficit reduction number by relying on savings from the expected wind down of the wars in Iraq and Afghanistan), but Boehner it raised in two parts.
— While both plans endorse a joint committee, the Boehner plan makes the second debt limit increase contingent on Congress passing $1.8 trillion in additional deficit-reduction based on its recommendations.
— Boehner plan would ensure a vote in both chambers on a Balanced Budget Amendment.
— Boehner proposes caps to future spending.
Possibilities for compromise:
— It would be easy for Reid to allow a vote on the Balanced Budget Amendment.
— The differences over whether the debt limit increase should be short-term or last through the 2012 election is not an ideological-based disagreement, so it seems either side could give way on that one.
— Depending on the level of the spending cap, there may be some compromise there.
And yet, for all of the similarities, both sides are still at each other’s throats. Not only that, Boehner’s own party is in revolt against his plan. I’m not sure why. Surely the Republicans are getting what they want, over a trillion dollars in cuts and no new taxes. The main issue now is political: Reid is proposing a two year package, tiding things over until after the 2012 elections, while Boehner wants to go through all of this again in a year.
Meanwhile, the country faces default and probably worldwide economic collapse if the debt ceiling isn’t raised by August 2.
Under President Clinton, the ascendant Republicans in Congress shut down the government, sparking a popular backlash that re-elected the unpopular president. I suspect the same thing will happen again: Today’s ascendant Republicans, giddy with having taken the House of Representatives, will show themselves willing to shut down the economy, sparking a popular backlash that will re-elect President Obama.