–Parties Less Interested in Resuming Deficit Talks Than Shifting Blame
–Accounts Suggest Boehner, Obama Were Close To Deficit Deal Last Year
–Last Minute ‘Gang of Six’ Deficit Plan May Have Complicated Talks
By John Shaw
WASHINGTON (MNI) – There is no better indication of the state of
high-level bipartisan budget talks than the fact that the two parties
still seem to be spending far more energy blaming each other for the
failure of last summer’s debt ceiling talks between President Barack
Obama and House Speaker John Boehner than in trying to build on those
talks and actually reach an agreement.
The high-stakes negotiations between Obama and Boehner last summer
on the debt ceiling culminated in an extraordinary series of meetings
and proposals in late July that brought the two leaders within striking
distance of an agreement on a deficit reduction plan of nearly $4
trillion over a decade.
Ever since the debt deal unraveled in late July and Congress and
the White House agreed on a much narrower and less ambitious deficit
cutting package, the two parties have offered very different narratives
about what happened during those talks by Obama and Boehner.
In the last several weeks, the Washington Post and the New York
Times Sunday Magazine have published detailed narratives of the debt
limit talks in which lawmakers and White House officials have offered
often gripping descriptions of the negotiations to secure a deficit
reduction agreement as part of a deal to raise the debt ceiling.
In the Washington Post’s March 18 account, written by Peter
Wallsten, Lori Montgomery, and Scott Wilson, Boehner and Obama are
described as near an accord July 17 to achieve a deficit cut of more
than $3.5 trillion.
The package would have included more than $1 trillion in
discretionary savings, $250 billion in Medicare savings, $200 billion in
other entitlement savings and $800 billion in additional revenues. The
plan would also have eventually used the chained CPI for indexing Social
Security benefits.
There appears to be a disagreement between the White House and
Boehner if this package was an agreement (as Boehner contends) or a
tentative framework (as the White House says).
But there is little disagreement that the Obama-Boehner talks were
greatly complicated by an announcement July 18 by so-called “Gang of
Six” in the Senate that they had reached a bipartisan accord on a more
than $4 trillion deficit reduction plan with almost $2 trillion in new
revenues.
By the Post’s account, Obama tried to persuade Boehner to increase
his revenue offer from $800 billion to $1.2 trillion, an increase
Boehner rejected. Obama’s view was that since a bipartisan group of
senators was suggesting additional revenues of $2 trillion he could not
sell a plan to congressional Democrats that had only $800 billion in new
revenues.
Boehner accused Obama of changing the terms of the negotiation in a
fundamental way.
“There was an agreement with the White House for $800 billion in
revenue. It was the president who walked away from this agreement,”
Boehner told reporters in late July.
The account of the deficit talks in the New York Times Sunday
Magazine April 1 by Matt Bai argues that a dispute still rages about
whether this July 17 package was a preliminary draft or an agreement
that later Obama backed out of.
In Bai’s telling, there are two dueling narratives about the debt
limit talks. There is Boehner’s account of Obama “moving the goal posts”
and seeking much larger revenues than the Speaker could accept.
And there is Obama’s view that Boehner became convinced that he
could not round up enough House GOP support to pass a major deficit
reduction agreement so he was looking for a pretense to break off talks.
Bai calls this the “Boehner couldn’t deliver” narrative.
Bai’s account contains tales of intrigue within the House
Republican caucus with House Majority Leader Eric Cantor directly
contradicting Boehner in front of Obama during the talks about whether a
deficit deal could pass the House.
Bai’s article concludes that the deficit talks further poisoned
the relationship between the White House and congressional Republicans,
but he also adds that the negotiations “forced policy makers on both
sides to wrestle with their own capacity for compromise.”
“They didn’t get the sprawling deal they were after, but they did
produce a serious blueprint for bipartisan reform, a series of
confidential memos that left them just a few hundred billion dollars
apart,” he writes.
There is little dispute that both parties have pulled back since
last summer’s negotiations and have fallen back to budgets that are
designed only to appeal to their political bases.
But with the end-of-the-year expiration of Bush era tax cuts, the
phasing in of across-the-board spending cuts in January of 2013, and the
need for another increase in the debt ceiling this year or early next
year, the big question that emerges is whether Obama and Boehner can
resume their intense fiscal talks and reach a deficit reduction deal at
the end of this year.
In his concluding comments to Bai, Boehner leaves open the
possibility of a big budget agreement at the end of the year.
“We’re heading toward a very big moment, where big decisions are
going to have to be made about the future of the country,” Boehner said.
** Market News International Washington Bureau: (202) 371-2121 **
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