Dispatch from the Grand Bargain trenches
by digby
There’s lots of talk about the Grand Bargain these days in the press, what with impending Armageddon, (which the congress may or may not kick down the road six months.)Here’s a story from yesterday:
A group of U.S. senators is quietly attempting to do something almost unthinkable in Washington: craft a bipartisan solution to the nation’s growing deficit in an election year.
They are looking at reviving a proposal by the leaders of President Barack Obama’s failed 2010 deficit-cutting commission to require Congress to act on a long-term plan, said Senator Kent Conrad, a North Dakota Democrat. The lawmakers want to offer a plan during the lame-duck session of Congress after the Nov. 6 election.
“The thing that has the greatest potential to succeed is, in the lame duck, a framework agreement is reached on a grand bargain to reduce deficits and debt by at least $4 trillion over 10 years,” said Conrad, the Senate Budget Committee chairman and a member of the new group of eight senators.
Today, Senator John McCain, an Arizona Republican, also embraced the debt commission leaders’ proposal. “Everybody knows what the solution is, and that’s Simpson-Bowles,” he said in an interview with Bloomberg Television’s Peter Cook, on the new program “Capitol Gains,” airing Sept. 23.
What comes next may be the reporter misunderstanding the real outlines of the negotiations, although I would not be surprised if that’s being discussed:
The U.S. faces a so-called fiscal cliff in January, when $1.2 trillion in automatic spending cuts over 10 years will start and the George W. Bush-era tax cuts will expire, unless Congress breaks its deadlock on a plan to replace it. Democrats propose letting tax cuts expire for top earners, while Republicans want spending reductions instead of more tax revenue.
Basically, that would be Democrats getting what going to happen if nobody does anything in exchange for Republicans getting cuts in vital government programs. What a deal.
Now, to be fair, I haven’t heard that before, so I’m guessing the reporter may have constructed that scenario since it’s not attributed to anyone. The Democrats haven’t been openly saying they’d be willing to exchange the expiration of the tax cuts for the rich for spending cuts. And frankly, I think that’s probably a non-starter for the Republicans. I suspect that any deal that includes tax hikes must be tax hikes that are largely illusory. (And keep in mind that no matter what, the tax hikes will be temporary while the cuts will be permanent — it’s always a good time to cut taxes, after all. It’s yer muneeee…)
The latest can kick is another “trigger”, (a trigger to replace a trigger…)
Under one alternative being considered by the group of senators, Congress would be given six months to overhaul U.S. tax law and entitlement programs such as Social Security. If lawmakers can’t agree, the deficit panel leaders’ plan would be triggered, Conrad confirmed in an interview yesterday.
It’s possible this will go nowhere. But the Pete Peterson circus is coming to town and they’ve got a great big pile of money:
An organization founded by Erskine Bowles and Al Simpson announced Tuesday that it has raised more than $25 million to launch a national campaign to encourage policy makers to pass debt legislation in the coming months.
The Campaign to Fix the Debt has collected contributions from corporate CEOs and others for a national media campaign and advertising campaign to urge lawmakers reach a solution to the debt crisis.
The organization was founded by Bowles, a Charlotte investment banker and former president of the University of North Carolina and Simpson, the former Wyoming senator, who headed a deficit commission appointed by President Barack Obama.
The Campaign to Fix the Debt is being chaired by former Sen. Judd Gregg and former Gov. Edward Rendell, a Republican and a Democrat.
And they’re getting their powerful, wealthy unlucky duckies in a row:
House Democratic Whip Steny Hoyer sought out Republican vice presidential nominee Paul Ryan on the House floor for a talk about fiscal issues late Thursday.
The two men huddled in plain view among the back benches of the Republican side of the chamber and were later joined by Rep. Jeb Hensarling, a Texas Republican who ranks fourth in House leadership.
Hoyer “congratulated Chairman Ryan on his selection as the Republicans’ Vice Presidential candidate, and told him that after the election, both parties will need to work together on a big, balanced plan to address the fiscal cliff,” Hoyer spokeswoman Katie Grant said.
No matter what happens in the November presidential and congressional elections, Ryan, Hoyer and Hensarling figure to play prominent roles in any major deal on spending and taxes.
Ryan left the campaign trail to vote on a measure designed to prevent the administration from granting states waivers from work requirements in the nation’s main welfare law.
It was Hoyer who crossed the floor from the Democratic side of the aisle to find Ryan among a throng of adoring GOP colleagues. Hoyer demonstratively shook Ryan’s hand, and a few minutes later the two found some empty space to have what appeared to be a serious discussion about the fiscal cliff.
Ryan told a well-wishing fellow Republican to hold on a minute so he could first talk to Hoyer.
“I’ve got to talk to this man first,” Ryan called out in a voice loud enough to be heard through the open doors of the chamber.
It’s impossible to know what’s going to happen. But it’s pretty clear what the political establishment wants to happen. And it’s bad news for the people.
.