Don't Get Your Hopes Up About A Deal On The Budget

Jacob Lew Gene SperlingAPNational Economic Council Director Gene Sperling and Treasury Secretary Jack Lew

Jonathan Chait, not exactly a Pollyanna, for some reason
sees green shoots: are Republicans and Democrats in Washington finally softening the positions that have stopped them from reaching a long-term budget deal?

Sorry, Jonathan. They’re not.

A conference committee is supposed to report back with a bipartisan budget compromise by December 13. We won’t get one for the same reason as ever: Democrats are only interested in doing a deal if it raises taxes, and Republicans won’t raise taxes.

Chait sees two shifts: Some Obama Administration officials, particularly National Economic Council head Gene Sperling, aren’t talking as loudly or clearly about their demand for tax increases in a deal; and Rep. Tom Cole (Okla.), a House Republican who is close with leadership, said he was open to revenue increases.


1) The White House is already walking back Sperling’s signal of flexilibility on tax increases, if that’s what he was even sending. Chait wrote:

Meanwhile, Gene Sperling also made the case for a budget deal, in elliptical terms that sounded like a softening of the revenue demand, without any explicit statements to that effect. Josh Green, listening closely, followed up:

“I hustled after him to ask if was really proposing an entitlement-cuts-for-stimulus budget deal. Sperling smiled a little awkwardly and said something about how he’d love to negotiate with me. … But he didn’t rule a deal that cut entitlements without additional tax revenue, even when I asked him a second time.”

But Josh Green’s Bloomberg Businessweek story has an update:

In an e-mail responding to this article, White House spokeswoman Amy Brundage wrote, “Gene was reiterating what our position has been all along: that any big budget deal is going to have to include significant revenues if Republicans insist on entitlement reforms. And any budget deal needs to have first and foremost the goal of creating good jobs for middle class families and growing the economy — that’s our north star in any budget deal, big or small.”

2) Tom Cole was also saying in 2011 that Republicans might do a big fiscal deal that included a revenue increase, so long as that didn’t mean raising tax rates. Remember 2011? That was when Grand Bargain talks collapsed because — wait for it — House Speaker John Boehner couldn’t convince his Republican caucus to vote for revenue increases, even if they came attached to big entitlement cuts.

Here’s what Chait is excited about today (emphasis added):

Rep. Tom Cole (R-OK), a deputy majority whip and close ally of Speaker John Boehner, told Bloomberg’s “Political Capital With Al Hunt” he wants the newly formed budget conference committee — of which he is a member — to reach a deal that includes entitlement changes and some added revenue via curbing tax loopholes (but not by raising rates).

“Well, I think that’s possible,” Cole said in an interview set to air Friday night. “I think both sides would like to deal with the sequester. And we’re willing to put more revenue on the table to do that, and we would like to do it with entitlement savings.”

And here’s what Roll Call wrote about Cole in 2011 (emphasis added):

Rep. Tom Cole (R-Okla.) noted that any package will probably need Democratic votes and won’t be particularly popular for either side. While general tax increases can’t get the votes, there might be some flexibility on getting rid of corporate tax breaks.

“My personal opinion is there probably is some flexibility in that regard,” Cole said. But he added: “Nobody’s going to tip their hand on that this early in the process. At the end of the day, you either trust your negotiator or not. I trust John Boehner.”

Cole said tax rates simply can’t be part of the equation.

Plus ça change…

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