Obama Still Trying To Sell GOP On “Grand Bargain” Debt Deal

It was a largely fruitless weekend in the debt negotiations.

Last night’s meeting at the White House didn’t go well at all apparently:

Talks among President Obama and congressional leaders Sunday evening failed to break a partisan stalemate over how to raise the federal borrowing limit, leaving the politically charged negotiations in limbo three weeks before the administration says the country will begin to default.

The White House meeting adjourned after roughly 75 minutes without agreement over how far the parties should go in cutting the deficit over the next decade or whether tax cuts and entitlement reductions should be a part of any deal. Congressional leaders will return to the White House on Monday to continue talks, administration officials announced, and Obama will hold a morning news conference before they do.

Both sides appeared Sunday to dig further into their positions, leaving the talks deadlocked, a historic default looming and a fragile economy increasingly vulnerable to the consequences of Washington’s entrenched partisanship and ideological divide over taxes and entitlements.

House Speaker John A. Boehner (R-Ohio) jolted the negotiations Saturday when he announced that his party would not support the larger deficit-cutting plan Obama has proposed because it includes tax increases, complicating the meeting’s agenda. According to a Democratic official familiar with the Sunday talks, Obama asked Republican leaders, “If not now, when?”

The enduring disagreement, drawn sharply along partisan lines as an election year approaches, brought warnings from the administration and congressional Democrats that, unless a deal is reached within two weeks — to give Congress time to approve it — the United States would default on its fiscal obligations for the first time.

Asked whether the parties could reach a deal in the next 10 days, Obama, flanked by congressional leaders in the Cabinet Room before the meeting, said simply, “We need to.”

During the meeting, Obama apparently still pressed for the long-term $4 trillion debt deal that he and House Speaker John Boehner had been talking about until Saturday:

The president argued several times that negotiators should work toward a $4 trillion package for reducing the deficit rather than the smaller one favored by Republicans, calling on them to stand up to their base to get it done. He said both parties would suffer politically, but they need to do something substantial, said a third Democratic official familiar with the meeting.

“If not now, when?” the president said to the group, according to the official.

House Majority Leader Eric Cantor (R-Va.), who spoke most often for the Republicans, argued that a grand bargain that includes new tax revenue would not pass the House, so they should fall back to the $2.5 trillion framework from the talks led by Vice President Joe Biden.

And thus, we are at an impasse. The President will be speaking at a news conference this morning, and negotiations are set to resume at the White House this afternoon. The logical thing to believe is that, eventually, a deal will be made because one simply can’t believe that American politicians would be so stupid as to create a panic that would lead to higher interest rates, and a weaker dollar. Right?

After all, even Mitch McConnell claims that “nobody” is talking about not raising the debt ceiling:

Senate Minority Leader Republican Mitch McConnell discussed the debt ceiling negotiations with Bret Baier on Fox News Sunday. McConnell was in agreement with Speaker John Boehner’s decision not to support a large deficit deal, yet also made a curious assertion that none of his Republican colleagues have ever claimed they will not be in support of raising the debt ceiling.

Baier, filling in for Chris Wallace, pressed McConnell on what would happen if no deal could be worked out and whether he was concerned with the consequences of what might happen if the debt ceiling is not raised. McConnell confidently responded, “nobody is talking about not raising the debt ceiling. I haven’t heard that discussed by anybody.” Yet Baier informed him that Congresswoman Michele Bachmann, among others, have explicitly said just that. Baier even quoted Bachmann saying “don’t let them fool you that the economy is going to collapse” if the debt ceiling isn’t raised.

Not just Bachmann. Senator Rand Paul has said he would filibuster any attempt to raise the debt ceiling, and Sarah Palin sent a warning to John Boehner in a recent interview:

Former Alaska governor Sarah Palin has issued a stern warning to House Speaker John Boehner (R-Ohio) as Boehner sits down with President Obama Sunday night to negotiate a raising of the debt ceiling: don’t do it.

Palin, in an interview appearing in Newsweek, “made it clear that she’s against any deal that raises the debt ceiling and would hold House Speaker John Boehner’s feet to the fire if he a”No, we have to cut spending. It is imperative, and I will be very, very disappointed if Boehner and the leaders of the Republican Party cave on any kind of debt deal in the next couple of months,” she said.greed to one” according to the magazine.

With rhetoric like this, is it any wonder that Boehner is having trouble putting together a deal? Something will likely be done before its too late, but I’m fairly certain now that we’re going to do down to the wire, and the possibility of a brief market panic is becoming more and more likely.

 

 

FILED UNDER: Barack Obama, Congress, Deficit and Debt, Politicians, Taxes, Tea Party, US Politics,
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. It takes two to not tango.

  2. Pete says:

    “We aren’t raising taxes, but we need to cut trillions in spending immediately. We aren’t cutting national defense, period, so that means $2 trillion in domestic spending. When the president brings us a list of at least $2 trillion in cuts he will support, we will meet again. If he doesn’t bring us that list, we won’t raise the debt ceiling.”

    The GOP message

  3. Hey Norm says:

    Cantor said the big deal can’t pas because of revenue increases and so they need to fall back to the small deal which Cantor walked away from because it held revenue increases.
    All you need to know is that Cantor is shorting the United States and will benefit financially when the economy crashes.

  4. Pete says:

    Norm, do you have proof of Cantor’s “short” position?

  5. Hey Norm says:
  6. Pete says:

    Norm, it certainly is a curious position for him to be in, but do you honestly believe that is any real motivation behind what he is doing in the talks? Or are you just venting and throwing stones?

  7. mattb says:

    At this point, Obama only has things to lose by caving. Giving in to the GOP demands means that they get to claim victory, and the status quo remains — which isn’t the best news for the President.

    Bohner is in a double bind position. On on side are the tea party backed people who don’t even want to raise the limit. And, I suspect that pragmatic members of the party are concerned that the 4 trillion deal makes Obama look too good.

    As long as Obama can get the message out that he was willing to compromise and put entitlements on the table, and the GOP walked away because they felt that the 15% of the deal that was ending some tax breaks was equivalent to tax hikes, then public support will end up on his side.

    His biggest problem will be whether or not he can actually communicate that in the simplest, most understandable terms — that’s where Reagan had him beat hands down.

  8. ponce says:

    that’s where Reagan had him beat hands down.

    I didn’t vote for Obama to get simpleminded.

    If America is to the point where a majority supports the Republican plan to default on our debt, no amount of talking can save us.

  9. Hey Norm says:

    Pete…
    Well it is clear that he is willing to crash the economy. Keep in mind the market is unpredictable…it’s not the sort of thing that is guaranteed to wait until Aug. 2nd to tank. The market is fickle and can turn on a false rumor. So Cantor is playing with fire every time he Walsh away from the table.
    Obviously at the level he is invested in the fund the potential gain is minimal.
    He also stands to gain the speakership if Boehner does what is right for the country, and he sticks with the base.
    So no…I do not claim to know what is in his heart. Neither, i would point out, do you. But it sure does strike me as funny that one of the most stubborn anti-deal negotiator has more to gain from the deal folding.

  10. MBunge says:

    The latest wrinkle from the GOP seems to be going back to the Biden talks and dredging up some trillion or so in spending cuts that were supposedly amenable to both sides. They’ll take those cuts, pass the debt limit and declare victory. I’m not sure it’ll work, but it does indicate they’re finally looking for a way out of this mess.

    Mike

  11. Hey Norm says:

    @ MBunge…
    But the Biden deal also included revenue increases, which Cantor walked away from. When any level of taxation is too high of a level of taxation then reasonable compromises cannot happen. The so-called republicans should just admit they really do not care about the debt, and pass a clean bill and let’s move on. They’ve shown their stripes. It’s all about protecting the wealthiest 10% from any tax increase. Just stop the charade.

  12. Jay Tea says:

    @Hey Norm: Why not use the budgets for the past couple of years as a starting point, and work from there?

    Oh, that’s right — the Democrats didn’t bother to even try passing budgets in well over two years.

    How the hell can you consider them having the slightest sense of fiscal responsibility in light of that? Yeah, the Republicans passed some bad budgets before the Democrats took over both Houses in 2007, but at least they passed SOMETHING.

    J.

  13. john personna says:

    @charles austin: “It takes two to not tango.”

    LOL, that shows that not all pithy sayings are fully reversible. While it does take two to tango, it does actually only take one to quit and ruin the dance.

  14. Rick DeMent says:

    @Jay Tea:

    While I shudder at the thought of the Tea Stains getting control of all branches of government, the only thing I look forward to is seeing how the GOP will pass anything when they now need 60 votes in the senate.

  15. Jay Tea says:

    @Rick DeMent: They CAN’T be any worse than Nancy Pelosi, Rick.

    J.

  16. Pete says:

    The GOP response to Obama’s presser; as imagined by one conservative:

    I am sure you saw the president’s remarks this morning, and I hope your networks carry my brief remarks in response in full.

    The president loves to campaign and he’s already in campaign mode. But we have to govern, and that requires real numbers and real cuts. We are not going to engage in any more set-pieces and provide any more props for the president’s re-election campaign. What we will do is raise the debt ceiling a dollar for every dollar in cuts the president sends us, as soon as he sends them, provided they are real. We will not raise taxes and we won’t cut defense spending, but beyond that we will take every cut the president offers and send it over to the Senate.

    The president has it in his power to avoid any collision with the debt ceiling. We don’t need any more meetings. We do need a list of cuts, cuts only he can propose.

    Thank you.

  17. Liberty60 says:

    I used to be a Republican back in the days when we were considered the green eye shade guys, the ones who took a cautious, sober view of government and loved to say things like “there is no free lunch” ( thats how it was in the 1970’s, in my memory at least).

    Today the conservative base is the party of magical thinking and free-lunchism.

    No matter how many times it is pointed out that it is mathematically impossible to have a balanced budget, pursue multiple foreign wars, and low tax rates, they keep shouting louder and louder.

    You notice how in an earlier thread I laid out the 5 basic categories of federal spending-
    1. Defense/ Homeland Security;
    2. Social Security
    3. Medicare;
    4. Debt Service
    5. Everything Else

    I challenged any conservative to assign a round SWAG number to them, and balance the total against the $2 Trillion or so in tax reciepts, to see what would result.

    The answer, as it has been the last 3 years I have been making this challenge, is crickets.

    They aren’t serious. This is religion and ideology, not accounting.

  18. Hey Norm says:

    @ JT….
    Again with the tired song about budgets not passed? Do you realize how irrelevant that is? There is nothing requiring a budget to be passed.
    Why not pass the debt ceiling as a clean bill, as it is about debt already incurred, and not future spending? The so-called republicans started this kabuki theater. Now they are getting bitch-slapped with their own game.

  19. Hey Norm says:

    @ Pete…
    You are wrong. The House can determine the cuts on their own. The House is where budget items start. But it’s a divided government. So if you are going to hold the Debt Ceiling hostage over future spending, when it is really only about past spending, then you need the Senate to go along, and the President to sign it. Hence the need for compromise by reasonable people.
    And if you think Boehner and Cantor and McConnell aren’t campaigning then you are crazy.

  20. Wayne says:

    The Democrats are probably waiting once again to do a last minute deal so very few will have a chance to read the deal before voting for it. It will be another deal where they cut defense spending, raise taxes, and make “promises” of “future” spending cuts years from now.

  21. Hey Norm says:

    @ Wayne…
    You mean like the ACA, which was debated for a year?

  22. Hey Norm, I call bullshit if you are talking about the PPACA, which even SpeakerPelosi said had to be passed so we could find out what was in it. No one even got a chance to read the final version of the bil that was passed and signed by the president.

    And you are even more wrong about this only being about past spending. If it was only about the past then there would by definition be now reason to have to raise the debt limit. It is all about the future.

    And your wrong about budgets… Oh, to hell with it.

  23. Hey Norm says:

    Chuck, Chuck, Chuck…
    We hit the debt limit on May 16th. That is the past…a time previous to this time. We continue to accrue debt because of legislation and obligations made in the past…a time previous to this time. The future is time after this time.

  24. Hey Norm, nice try but that’e the same kind of bullshit that baseline budgeting brought us so increases of 6% instead of 8% annually can be called cuts.

  25. mattb says:

    @ponce:

    me: [getting a message out is] where Reagan had [Obama] beat hands down.

    Ponce: I didn’t vote for Obama to get simpleminded.

    That’s not my point. Go back and listen to some of Regan’s early uses of the bully pulpit — the man was great at boiling down a complex idea to something really tangible.

    Obama’s biggest problem is that, while he is an amazing speaker and clearly a smart dude, he lacks some of that immediacy. He comes across as a professor — which I dig, but it doesn’t help him in these situations.

    Reagan really crafted his writing and speaking skills during the 60’s and 70’s emerging as not just a conservative voice, but also a conservative thinker and communicator. Learning to keep it simple and maintain that gravitas is as area where I wish Obama was more developed.

  26. An Interested Party says:

    The GOP response to Obama’s presser; as imagined by one conservative…

    In other words, “give us everything we want, Mr. President, with nothing you want, otherwise, we won’t agree to raise the debt ceiling”…that’s not a response, that’s blackmail…oh, and as Norm noted, anyone who doesn’t think that Republicans aren’t also in campaign mode is delusional…