Democratic and Republican lawmakers are balking at the “grand bargain” under consideration by President Barack Obama and Speaker of the House John Boehner, dimming hopes that a deal can be reached this weekend to prevent the government from defaulting on August 2.
As aides meet in advance of the principals session on Sunday, Obama and Boehner are struggling to keep their respective parties in line.
The $4 trillion agreement, which appeared to be just over the horizon earlier this week, is now very much in doubt.
Obama and Boehner
Both leaders have reached the conclusion that a deal is necessary, and that bigger is better for the country and their personal political fortunes.
They also each acknowledge the other’s political limitations, with Obama unable to accept a deal free of revenue increases, and Boehner having no choice but to oppose tax increases.
If their “grand bargain” were to pass, the two could claim historic victories in getting the nation’s finances in order.
Cantor vs. Boehner
Conservative Republicans, led by House Majority Leader Eric Cantor (R-VA), are using this Friday’s grim job numbers to call for steep spending cuts without new revenues. Their position puts them at odds with Boehner, who has privately indicated to Obama he would accept up to $1 trillion in new revenues in exchange for cuts to entitlements.
In his public statements on the negotiations, Boehner has been careful to oppose tax increases (a no-go with his base) while making room for accepting new income — likely from ending corporate and other subsidies.
But Cantor says he would not agree to an agreement that includes the closing of tax loopholes, unless the changes are revenue neutral — removing their significance to the deal.
For Cantor, who has the loyalties of most of the GOP’s class of 87 freshmen, standing up to Obama and Boehner on new revenues endears him to the party’s conservative wing, thereby bringing him closer to his goal of one day occupying the Speaker’s office.
Pelosi vs. Obama
Meanwhile House Minority Leader Nancy Pelosi (D-CA) is leading the liberal charge against Obama’s willingness to cut entitlements. Pelosi has repeatedly emphasised she would not support any deal including benefit cuts, which are necessary to reach Obama’s deficit reduction target. “No. Medicare. Cuts,” she said in a press conference Friday, hours after meeting with Obama to discuss the negotiations.
Pelosi has struggled to maintain the level of influence she had as Speaker before Republicans retook the House of Representatives in last year’s landslide. Democrats will likely benefit politically in next year’s elections if they stand firm on protecting entitlement benefits.
A “grand bargain” can still happen, even without their support
Obama and Boehner can still pass a sweeping deficit reduction deal, assuming they can muster enough support from both sides of the aisle to put together a majority in the House of Representatives. Already Pelosi’s deputy, Minority Whip Steny Hoyer (D-MD), is reportedly open to entitlement cuts as part of a larger deal, and he would bring a sizeable number of moderate Democrats along to vote for the deal. Boehner’s bloc of the House GOP caucus would bring nearly 100 votes to support a deal.
The path in the Senate is much clearer, with both Majority Leader Harry Reid (D-NV) and Minority Leader Sen. Mitch McConnell (R-KY) likely to back a grand proposal.
Obama and Boehner’s pursuit of “bigness” — perhaps the most promising deal to raise the debt limit and lower the deficit — will come down to the next 36 hours.
Long-time Beltway observers put the prospects of a deal getting done at about 25 per cent.
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