If you’re hardy, stay up until 1am ET tonight and watch the US Senate take a vote on a debt limit plan. The plan will retain most of the structure of what Harry Reid has put forward in recent days – a full $2.4 trillion increase in the debt limit, along with near-term spending cuts in the form of a cap on discretionary spending for around $1 trillion, war savings and assorted mandatory spending cuts for another $1.2 trillion, and the enactment of a joint committee on deficit reduction (what we’ve been calling Catfood Commission II) armed with the authority to recommend future deficit solutions, which will get an up or down vote in both houses of Congress without amendment or filibuster.
The Reid bill didn’t pass last night because it didn’t have 60 votes – he could not persuade enough Republicans to join him on the initial plan. So Reid has been adding sweeteners to get Republicans on board. There are three major possible pieces to sweeten the pot:
1) Reid would adopt Mitch McConnell’s fallback plan to force the President to take all the responsibility for increasing the debt limit. How it would work is that the President would submit the request for the increase, which either House could vote against with a resolution of disapproval. The President could veto that resolution, and it would be sustained with just 1/3 of either chamber.
2) Reid would add another sprinkling of spending cuts, designed to get to the $2.4 trillion number in total deficit reduction. It would do that based on a January baseline, not the March 2011 baseline with the changes from 2011 appropriations. Compared to that (the actual number), the savings would be $2.2 trillion.
Now, if it stopped there, you would basically have McConnell-Reid. There would be spending cuts, but about half of them on the side of war funding accounting. There would be a Catfood Commission, but the debt limit wouldn’t be tied to it. There would be the McConnell disapproval process, but that’s really just a political action designed to force bad votes, and it doesn’t really even force bad ones (Democrats could let as much as 20 votes go in the Senate on such a vote, meaning nobody in trouble for re-election would need to support it).
But if this were totally acceptable, McConnell-Reid would have passed a week ago. So the clear endagme here is a trigger, something that would force the Catfood Commission recommendations into law, with real consequences if it failed. In this negotiation, lawmakers are having the same problem they had with a grand bargain. Republicans don’t want taxes in the trigger, and Democrats don’t want it to be all automatic cuts. We’re having the Catfood Commission debate inside the trigger for the Catfood Commission.
Most think the likely compromise is a trigger that would impose automatic, across-the-board cuts in spending if the committee fails in its mission. But Senate Democratic leadership isn’t so sure. They worry that a spending-cuts only trigger is heads, Republicans win; tails, Democrats lose. “The idea of triggers with just cuts is a non-starter. Republicans would just deadlock the committee and get the cuts they want,” continues the aide. “If there is a trigger it would have to be balanced.”
The White House, according to Ezra’s sources, is less dogmatic on the need for a balanced trigger. But the logic of the Senate leadership aide is impeccable. If the trigger puts into motion automatic and deep spending cuts if the Catfood Commission fails, there would be lots of incentive on the Republican side to let that commission fail. Even if the automatic cuts are untargeted, even if they hit Social Security and Medicare and Medicaid, I can’t see Republicans caring much about that, as long as their precious taxes are spared.
In fact, it may never get to a Congressional vote. The Republicans on the Catfood Commission are unlikely to allow for any taxes, in all likelihood. That could deadlock the commission. And it would weigh on Democrats on the commission who would be in the position to go along with some all-cuts recommendation that is more intelligently targeted, rather than random automatic cuts. An all-cuts trigger just makes for a variety of unpalatable options.
Meanwhile, all of this is predicated on the idea that the Senate passes the first stage of something at 1am Sunday and the House goes along with it. The House today is going to vote down the old version of the Reid plan, with almost all if not all Republicans opposed. They had to make their bill more right-wing to pass it with Republicans. The obvious solution is to allow some Reid-McConnell hybrid that passes the Senate go up for a vote, getting a majority of Democrats and a sprinkling of Republicans to get to 216, but there’s no guarantee at all that John Boehner would allow then.
So the options then appear to be: 1) a Reid-McConnell hybrid with no trigger on the Catfood Commission (unlikely), 2) a bad Reid-McConnell hybrid with a trigger (more likely), 3) default on payment obligations (perhaps the most likely at this point). And the best case scenario, number 1, would be a real reduction in GDP and increase in unemployment as a result of near-term austerity, which could only get worse after the Catfood Commission makes its recommendations.
See you at 1am!




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Send in the clowns…don’t bother they’re here.
I think the trigger may be a distraction. Yesterday Ed Henry asked Jay Carney why the White House wasn’t calling anyone in the Senate. Carney ducked. I called around last night. They’re not whipping. They don’t have any GOP votes lined up and leadership is apparently not trying to get any. They know they can’t.
The first tell was when McConnell turned to Reid and said “let’s vote on your proposal now.” And Reid waffled. I think it’s all about running down the clock for him now.
The second tell was when I read the Reid plan and it had two traunches. I just do not think they want that to happen, so I think they crafted the bill to be as close to the GOP bill as they possibly could because they want to be able to say that it’s the GOP who are being obstructionists. Which is true.
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Article:
Neo Confederates Attacking the Nation; Guilty of Treason
I saw a headling on MSNBC a little while ago saying we would soon run out of money. No kidding. We will run out of money. I’m watching mine closely. I don’t want it to run away or get lost or anything. Imagine, money runs out, who woulda thunk it.
Bloomberg points out that triggers tend to be worthless since they are often overridden anyway
Are you saying Obama will use 14th Amendment or coin seigniorage to avoid default? Or just let default happen? Is the WH playing with a change of deadline at the last minute?
What I see Obama wanting most of all is the Super Congress of the Twelve Caesars to allow him to go after entitlements full force. If there are no bills with that provision, he loses. He maneuvered the Congress into this situation by not getting the debt ceiling raised along with extending the Bush Tax Cuts (now the Obama Tax Cuts); he could certainly have gotten a debt ceiling increase along with the single unemployment extension. Or do you feel you could not have done that?
Dday you continue to be just the best, amazing all you do.
In fact all talented and thinking humans are so above and beyond this utterly broken-to-ridiculous-absurdity system. Even these players we follow (in our putative roles as engaged citizens, they as our representatives), how can they too not feel ridiculous at all of it anymore, the absolute grift and lie we’re all in?
Can Obama use a “signing statement”..? If so, what would then happen?
And I don’t disagree with that, but it’s not necessarily the viability of the trigger but how the trigger affects political actors that’s important. I think Kent Conrad, likely to be on that commission, will gladly use the threat of a trigger to justify a bad commission deal with Republicans as the least-worst alternative.
Fuck compromise. Fuck em all. There is no crisis. The markets will not fail. This is just another big lie like Iraq and the “meltdown” of 2008. Only intransigence can save us from the next big grab.
There will be no default. There can’t be a default. It is legally, financially, and politically impossible to default. Anyone telling you it’s going to happen is lying to you.
The only thing that will happen is that Obama is going to have to decide who gets what, when Govt has to live on it’s income.
Jane posted a Senate watch party
Catfood 2 is foreshadowed by the military pensions panel proposal to end defined benefit pensions and go all savings account. Obama is not hiding his intentions. It is amazing he has any Democratic support in the polls.
As no Congress can tell another Congress what to do, I would not normally worry about a trigger that affects the next Congress, but Obama has set up a loss of the Senate with continuing GOP control of the House, with a president who is either a very right wing GOP – or the right wing Obama elected as a “Democrat” because of his ability to lie and give a great progressive speech.
Please give DDay a hug as he deserves some kudos for his great analysis and amazing work ethic.
Jane — Really like to hear your guess on jawbone’s question @6.
Also, I agree with Sharkbabe about DDay: the hardest working man in the blogosphere!
I do not see this list as exhaustive. Specifically, 3) should read “no increase in the deficit limit,” which IMHO is by far the best option.
In that case, Obama would be forced by the Constitution to invoke on of at least six options, as detailed here by letsgetitdone.
Among those options is the 14th Amendment option, which has recently been well analyzed by Yale law professor Jack Balkin.
good point – but assumes an Obama backbone not in evidence
Also assumes Obama is not hell bent on killing Social Security in the same way his military pension panel wants to move all military to savings accounts only for pensions.
Jane, papau @12 and BeachPopulist @13 have some great questions, and I need help with this also, so I hope you can check back here a little later in between liveblogging for the Senate Watch Party.
It’s just amazing how plugged in you are to what is actually going on (or not) between the White House and Congress.
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Oh God, Obama is negotiating again … we’re doomed.