Is Boehner barking or biting?
(Kevin Lamarque/Reuters)
Is John Boehner
drawing a line in the sand, or just rattling his saber?
The president and his party may want a debt limit increase that includes tax hikes, but such a proposal cannot pass the House. The president and his party may want a debt limit increase without spending cuts that exceed the amount of the debt limit hike, but such a proposal cannot pass the House. The president and his party may want a debt limit increase without budget reforms that will restrict Washington's ability to spend in the future, but such a proposal cannot pass the House.
These are the realities of the situation. If the president and his allies want the debt limit increased, it is only going to happen via a measure that meets these tests.
After reading his statement a couple of times, my sense is that Boehner's bark may be louder than his bite.
The first issue seems like it's the most contentious, but it's important to note that Bohener does not seem to be talking about reductions in tax expenditures (loopholes and the like). Instead, he's talking about actual tax hikes—increases in tax rates. The thing is, under current law, tax rates are going up at the end of 2012, so unless Republicans demand an extension of the Bush tax cuts, this is just hot air.
On spending cuts, President Obama's budget, which he released in April, already includes significant spending cuts. So there's a general agreement that there should be spending restraint. The question is where that comes from, and Boehner's ransom note doesn't address the most contentious aspect of the spending debate which is how deeply defense spending should be cut. Republicans have proposed significant increases in defense spending, but the fact that they are demanding them in this ransom note suggests they may back off those proposals.
Finally, the budget process reform question shouldn't be terribly hard to squash. There's no way there's going to be a balanced budget amendment. Instead, something along the lines of what President Obama proposed in April makes sense: if the deficit isn't shrinking as a percentage of GDP, caps will be triggered that reduce both spending and tax expenditures, but neither Social Security nor Medicare will be touched.
The bottom-line is that despite the seemingly tough rhetoric Boehner is using, it should be possible to find an agreement that is consistent with the plan President Obama set forth in April, but for that to happen Republicans are going to need to budge on tax expenditures and stop insisting on big defense spending increases. I think Boehner's statement gives him room to do those things, but if this isn't just rhetoric, if he actually insists on taking a hard line and demands that Republicans get things they couldn't have otherwise gotten, then we're heading towards a cliff, and he'll be the one who pushed us over the edge.