Thursday, July 21, 2011

The Debt Ceiling - A Deal, Or No deal?

Well, it depends on whom you talk to.

Pravda-on-the-Hudson ran a story today stating flatly that Speaker John Boehner and President Obama are near a deal on spending cuts and taxes on what they describe as ' a sweeping deficit-reduction agreement.'

According to the usual unnamed Congressional and administration officials, the deal creates about $3 trillion in savings obtained through substantial spending cuts and what they call increased future revenues instead of labeling them as tax increases, which is what they are.

According to the Times version of things, this time it's the Democrats who are upset over Obama compromising with the Republicans, and at being shut out of the alleged negotiations.

They quote Senator Harry Reid, the Senate majority leader as saying after a meeting “The president always talked about balance, there had to be some fairness in this, this can’t be all cuts.The caucus agrees with that. I hope the president agrees with that and I’m confident he will.”

Oddly enough, people who are willing to go on record are saying there is no deal.

White House press secretary Jay Carney opened his daily press briefing by saying outright that The New York Times was incorrect.

"There is no deal. We are not close to a deal," Carney said.

A spokesperson for John Boehner said exactly the same thing, that lines of communications are open but "there is no 'deal' and no progress to report."

Boehner himself said that while he had prepared the House Republicans for compromise, nothing was going on at present, and he made a point of saying that President Obama continued to essentially be AWOL. “The ball continues to be in the president’s court, and it’s been there for some time.”

My guess? There was probably a meeting or two between Boehner and the president in which both staked out the minimum positions. I doubt a deal was crafted, but I suppose we'll see. Even if something does get pieced together, it will likely be a short term stop gap because of the timing.

The president has changed his mind and is now reportedly OK with a short term rise in the debt ceiling,but refuses to give up anything significant in exchange, probably expecting he's going to get a deal like the last time, when the ridiculous budget bill was passed.

In the president's mind, I doubt this is a matter of urgency. The way he looks at it, it's all about politics. Either he gets exactly what he wants so he can look like a winner who faced down the Evil Republicans or the government goes into default and he makes sure that things like Social Security checks aren't prioritized so he can blame it on the GOP 'obstructionism'.

Stay tuned.

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