Friday, July 22, 2011

Open Thread & News Round-Up: Debt Negotiations

I suspect we're going to get news of a "deal" sometime today, but in the meantime, here's the latest...

New York TimesBoehner and Obama Nearing Deal on Cuts and Taxes (isn't is strange that the president's name would come second in that headline?):
Congressional and administration officials said that the two men, who had abandoned earlier talks toward a deal when leaks provoked Republicans' protests, were closing in on a package calling for as much as $3 trillion in savings from substantial spending cuts and future revenue produced by a tax code overhaul. If it could be sold to Congress, the plan could clear the way for a vote to increase the federal debt ceiling before an Aug. 2 deadline.

But the initial reaction to the still-unfinished proposal hardly suggested a quick resolution. This time, the flak came mostly from senior Congressional Democrats, who are angry at some of Mr. Obama's concessions and at being excluded from the talks.

The president worked to ease concerns from members of his party, inviting Democratic leaders to a White House meeting on Thursday evening that lasted nearly two hours. The participants would not comment afterward.
PoliticoDebt talks have senators angry about being left out: "Furious Democrats directed their ire squarely at Obama’s budget director, Jack Lew, at a closed-door lunch meeting, while Republicans peppered their leaders with questions about the possibility of being jammed into a multitrillion-dollar bill with virtually no time for review. The frustration was evident in virtually all corners of the Senate on Thursday as it became increasingly possible that the body where landmark deals are usually made could effectively be left out of this one."

TPMDC—Reid Presses Obama Not to Agree to Debt Plan With No Revenue:
The White House is denying reports, including this one, that President Obama is close to a deal with House Speaker John Boehner (R-OH) on a debt limit/deficit reduction package comprised of concrete spending cuts, and aspirational revenue increases.

White House spokesman Dan Pfeiffer tweeted that reports of a $3 trillion deal without revenues were incorrect. "POTUS believes we need a balanced approach that includes revenues," he wrote. However, what the President believes and what he may ultimately feel compelled to sign off on are not necessarily the same. Equally, Pfeiffer's tweet would not seem to rule out the idea of "aspirational" revenues that would come at some unspecified time in the future, while coupled with cuts that could begin immediately.

With that in mind, Senate Democrats are worried. One top Dem aide explained the problem: In early negotiations that ultimately collapsed, Obama and Boehner considered passing a package of spending cuts with a promise to tackle tax reform in the coming months. But -- this is key -- a failsafe written in to the grand bargain would have decoupled most of the Bush tax cuts from those cuts benefiting only top earners. If comprehensive tax reform failed to pass this Congress, those top bracket cuts would expire.

Now, the aide says, Democrats are concerned that the White House might abandon that failsafe.
Related Reading from Glenn Greenwald in the GuardianBarack Obama is gutting the core principles of the Democratic party: "The same Democratic president who supported the transfer of $700bn to bail out Wall Street banks, who earlier this year signed an extension of Bush's massive tax cuts for the wealthy, and who has escalated America's bankruptcy-inducing posture of Endless War, is now trying to reduce the debt by cutting benefits for America's most vulnerable – at the exact time that economic insecurity and income inequality are at all-time highs."