As Cliff Deal Takes Shape, Congressional Leaders Prepare for a Tough Sell

Now comes the unpredictable part of the capitol's high-stakes dealmaking: the rest of the people's representatives are about to take center stage.

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Alex Wong / Getty Images

House Speaker John Boehner listens during a media availability after a House Republican Conference meeting on Capitol Hill in Washington, Dec. 18, 2012.

The pace has been plodding, but Washington reached an important checkpoint this week in its effort to avoid wrecking the U.S. economy with a crisis of its own creation. President Barack Obama and House Speaker John Boehner have swapped fresh proposals marked by significant concessions. Differences remain and hurdles loom, but the outline of a pact to avoid the damaging combination of automatic tax hikes and spending cuts set to take effect on Jan. 1 is finally coming into focus. Now comes the unpredictable part of the capitol’s high-stakes dealmaking: the rest of the people’s representatives are about to take center stage.

The 112th Congress is on track to be one of the least productive in history, and neither side has suddenly acquired a taste for compromise now. Any deal Boehner and Obama ultimately cut needs to muster the votes to pass both chambers, and the House is particularly tricky territory, since it contains a contingent of conservatives hostile to higher taxes and a faction of liberals who oppose cuts to entitlement programs.

The looming threat of a double rebellion has sapped some of the optimism that the latest proposals might have engendered. Obama’s offer, the terms of which were leaked to reporters Monday night, calls for $1.2 trillion in new revenue over the next decade — the midpoint between his initial request of $1.6 trillion and Boehner’s call for $800 billion — and a roughly equal amount of spending cuts, a third of that in entitlement savings. (Republicans dispute the White House’s math.) Obama also offered to preserve the current tax rates on household income up to $400,000. For his part, Boehner has proposed to raise taxes on income earned past $1 million and to delay another damaging skirmish over the nation’s debt ceiling for a year.

While both sides balked at the other’s terms, the concessions lifted some of the gloom enveloping the capitol with just two weeks until the deadline. Obama has met Boehner halfway on the revenue a deal generates, upped the amount of entitlement savings it would include, and hiked the threshold for raising raising taxes on the wealthy. Boehner has bowed to the reality that a deal will require tax hikes and agreed to put off another round of debt-ceiling brinkmanship, a risky tactic his conference wants to use to extract more spending cuts next year. The two negotiators both want to cut a deal as a down payment on broader efforts to overhaul the tax code and entitlements next year. Having exchanged the requisite series of fantasy proposals, they are moving toward a middle ground that suggests an agreement can be reached — at least between the two leaders.

But neither gets to dictate to his caucus. Boehner and Pelosi will have the challenge of finding enough votes among the rank-and-file members of their parties, both of which contain elements willing to plunge off the cliff. Republican won’t swallow tax hikes until Democrats budge on entitlements, and that is proving a tough sell. On Tuesday a faction of liberal Democrats assailed Obama’s willingness to change the formula used to calculate Social Security benefits, called “chained CPI.” Democrats oppose the change, first floated by Republicans, because they don’t believe Social Security contributes to the deficit and they worry the new formula would hurt the poor. House Democrat Keith Ellison called the idea “unnecessary and irresponsible,” and Pelosi added that she would resist a separate effort to scale back entitlement costs by boosting the Medicare eligibility age from 65 to 67.

Republicans have doubts of their own about Boehner’s proposal. Dyed-in-the-wool Tea Partyers won’t accept a deal that raises a dollar of revenue on ideological grounds. (Emblematic quote, from freshman Rep. Raul Labrador of Ohio: “I’m a hell no! There are a lot of bad things in this bill.”) Then there are conservatives who realize they’re boxed in by the impending expiration of Bush-era rates and want to grab the best deal possible, but remain hopeful of a sweetened offer. (Emblematic quote, from Senator-elect Jeff Flake of Arizona: “All of us recognize that the top rate is going to go up. The question is: How much can we do to change that?”)

The challenge of knitting together a coalition of 218 falls to Boehner and Pelosi, who for her part expressed confidence. “It depends on how many [Boehner] has,” Pelosi told MSNBC’s Andrea Mitchell Tuesday. “But yes. The Democrats will stick with the President.” She paused a beat. “Maybe not every single one of them.”

20 comments
JohnYuEsq
JohnYuEsq

End this Madness! RECALL the Obstructionist Republican BUMS OUT OF OFFICE, NOW!

NoWorrys
NoWorrys

How would it feel to be the leader of the most unproductive Congress in history?

MrObvious
MrObvious

Adding social security into the mix is idiotic. It doesn't add to the deficit. He have the majority of this country behind him to get a deal for no SS cuts and tax increase over 250k.

Wheeling and dealing on those points just undercuts the mandate he was given.

And this kind of sausage making is what turns people away from politics and our politicians.

PaulDirks
PaulDirks

don’t believe Social Security contributes to the deficit

It's not a question of belief......

Another journalism fail!

Arimathean
Arimathean

I will be extremely disappointed in Obama if he does not adequately seize this opportunity to make up for the insane levels of Republican obstructionism of the last two years.  The Democrats finally have the upper hand, and should force the GOP to compromise its unsustainable principles, just as the GOP tried to do with literally every single Obama-supported bill for the last two years.  I do not say this out of spite -- I say this because we need to recover some ground if we are to effect real change.

bobell
bobell

Part one of two:

Changing the inflation index by which Social Security benefits are adjusted in order to slow the rate of increase is a terrible idea in so many ways that I can't list them all.  It contibutes little in savings but takes that little out of the hides of mostly low-income people.  It violates a Dem pledge not to touch SS or Medicare benefits and allows the Repubs to attack any Demo who votes for it as anti-seniors.  It sets a terrible precedent.of conditioning revenue hikes on cutting benefits.  If the Dems allow themselves to be suckered into accepting this, they will rue the day.  Just keeping the floor on higher rates at $250K, instead of raising it to $400K or -- heaven forbid -- one megabuck, would cut a lot more deficit than adjusting the SS index.

Paul,nnto
Paul,nnto

"because they don’t believe Social Security contributes to the deficit"

Isn't that framing like "because they don't believe the sun rises in the west"?

bobell
bobell

Part two of two:

Funny thing is that there is a better cost-of-living index available for SS adjustments -- It's the CPI-E, which is designed specifically to measure increases in the cost of living for seniors, the very people who get SS benefits. It would lead to a higher rate of increase in benefits. But if you want the most realistic index (which of course isn't at all what the Repubs want), why not use that one?

Most important of all, Obama has to break the debt-ceiling stalemate permanently and do it now.  No deal that allows Repubs to take hostages down the road is acceptable.  He has the momentum, he has the political capital, he has to do it NOW.

PaulDirks
PaulDirks

@AlexAltman @Paul,nnto So the Trust fund has a surplus which it uses to buy bonds. When it no longer has a surplus it needs to sell those bonds and the general fund has to find the money to borrow elsewhere. Guess what? The size of the 'deficit' remains unchanged by these transactions. The amount the general fund owes investors remains the same.