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Amid Din, Serious Talk on Debt

Let’s have an adult conversation about the federal budget — because Washington has started one.

US Capitol Building with cash
US Capitol Building with cash

No, seriously.

It’s hard to hear through the clamor surrounding rival approaches to the budget by President Obama and House Republicans. Because the din was linked to the volatile debate over raising the debt limit, it sounded like a typical partisan brawl with an atypical ability to destabilize financial markets and the economic recovery.

But listen closely, and you can hear something different: moves by Republicans and Democrats to decouple what they must resolve within the next two months from what they’ll battle over for the next two years.

Consider the reaction of Representative Paul D. Ryan, chairman of the House Budget Committee, after Mr. Obama’s speech excoriated Mr. Ryan’s proposal as an attempt to take money from older people with health problems and give it to millionaires.

“It definitely poisons the well on a comprehensive solution to our budget problem,” Mr. Ryan said on CNBC. The picture the president painted of his budget, Mr. Ryan added, was that “basically it’s un-American.”

Yet Mr. Ryan, a Wisconsin Republican, went on to separate the impact of Mr. Obama’s words on long-term budget negotiation from their impact on the short-term challenge of persuading Congress to raise the federal debt limit.

“As far as the debt limit, we’re just going to have to forget about the president for now,” Mr. Ryan said. “He’s out campaigning, giving us this kind of demagoguery and this kind of rhetoric.

“We’re going to have to work with our colleagues, Democrat colleagues here in Congress, act like adults, and try and get a solution to that particular problem. Which we intend on doing.”

In today’s Washington, that’s the sound of the White House and Congress working together.

Blending Approaches

Decoupling short-term challenges from long-term battles over debt and deficits won’t be easy. The issues overlap; the ideologies behind the two parties’ approaches hardly overlap at all.

Republicans see the long-term solution as a fundamental diminution of the role of government, foremost in the entitlement programs of Medicare, Medicaid and Social Security.

Democrats aim to preserve the essential character of those huge programs. They would pare deficits by combining less-consequential spending cuts with tax increases, particularly on the most affluent Americans.

Given the nation’s political divisions, enacting a solution will almost certainly require a blend of both approaches. That’s what the Senate’s bipartisan “Gang of Six” is trying to negotiate.

Even if the six succeed, however, 10 times as many of their colleagues must agree to move anything through the Senate. So odds tilt strongly against passage of substantive changes in taxes or entitlements until after Mr. Obama and his Republican adversaries place their alternatives in front of voters in the 2012 presidential campaign.

Yet House Republicans insist on immediate steps toward a long-term solution — as their price for raising the debt limit, which both sides acknowledge must happen before Washington’s authority to borrow runs out around July 8. Those more limited steps are the subject of negotiations that Mr. Obama initiated with Republicans, even as he blistered their budget.

Signals of Agreement

Already, both sides have backed similar long-term goals of $4 trillion in deficit reduction, the level advanced by Mr. Obama’s bipartisan fiscal commission. They’ll haggle over budget process “triggers” intended to force the government to hit numerical targets.

Still unclear is what policy disputes must be settled in an agreement to smooth the path for raising the debt limit. In addition to the familiar “tax reform” euphemism to avoid Republican opposition to tax hikes, Mr. Obama has offered a new one: “reduce spending in the tax code.”

But public comments by Republican leaders as well as their private discussions with Mr. Obama have signaled mutual commitment to an agreement allowing a debt limit increase to pass Congress. Representative John A. Boehner signaled as much last November, even before he took the speaker’s gavel, when he said “we’re going to have to deal with it as adults.”

Passage last Thursday of the 2011 budget agreement provided a template for cooperation. That morning, the House Republican whip, Kevin McCarthy, informed his Democratic counterpart, Steny H. Hoyer, that because of conservative defections, the deal needed Democratic votes. The 81 votes Democrats provided let it pass easily.

What leaders don’t want to replicate is the brinksmanship that left the federal government within an hour of shutting down. On the debt limit, suspense itself could produce the falling confidence and rising interest rates that business and government both want to avoid.

“Everybody agrees that a countdown clock will be harmful,” Mr. Hoyer said in an interview.

In a White House meeting last week with Mr. Obama and Congressional leaders from both parties, Mr. Hoyer offered an idea to keep one from starting: pass a debt limit increase by June 8, a full month ahead of the deadline.

Republican leaders didn’t commit. But “nobody said, ‘No, we can’t do it,’ ” Mr. Hoyer said.

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