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.
The Biden agreement had settled on about $1.5 trillion in cuts, while another $500 billion in cuts would be included if Republicans agreed to $200-300 billion in tax loophole closures. That's balanced, right? The "sticking point," for Republicans, is what it's always been: raising taxes for rich people. Proving yet again that none of this is about the deficit, at least not for the GOP.
For their part, Democrats are repeating the mantra that entitlements be protected.
After the meeting ended, House Minority Leader Nancy Pelosi said in a statement: “We came into this weekend with the prospect that we could achieve a grand bargain. We are still hopeful for a large bipartisan agreement, which means more stability for our economy, more growth and jobs, and more deficit reduction over a longer period of time.”
She added: “This package must do no harm to the middle class or to economic growth. It must also protect Medicare and Social Security beneficiaries, and we continue to have serious concerns about shifting billions in Medicaid costs to the states.”
Rep. Chris Van Hollen (D-Md.), appearing on CNN’s “State of the Union,” said the Biden talks identified only about $1 trillion in spending cuts. Democrats would agree to those cuts only if certain tax loopholes were closed, such as tax breaks for corporate jet owners and subsidies for oil and gas companies.
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.
Which takes us back to the beginning of this circus. Obama can drop the offer of spending cuts. Revert to a clean debt ceiling bill that the GOP's real leaders—Wall Street and the Chamber of Commerce—will force them to accept. That's probably not what's going to happen, but that's the best way to end this.