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December 17, 2012

Boehner’s Debt Limit “Concession” Not a Concession at All

Posted in: Uncategorized

Boehner offers to increase the debt limit and raise taxes in exchange for major social insurance cuts

House Speaker John Boehner not only offered an increase in tax rates for millionaires, but also offered to increase the debt limit for 2013. This is supposed to be seen as a compromise measure. I have no idea why.

Boehner’s offer signals that he expects a big deal with sufficient savings to meet his demand that any debt limit increase be paired dollar for dollar with spending cuts. That would permit him to keep a key vow to his party — and head off a potentially nasty debt-limit fight — at least until the end of next year.

“Our position has not changed,” Boehner spokesman Michael Steel said Sunday. “Any debt limit increase would require cuts and reforms of a greater amount.”

The offer apparently paired $1 trillion in tax increases with major social insurance cuts. Assuming that the spending cuts match the tax hikes dollar-for-dollar, all Boehner is saying is that his rule, where every dollar of debt limit increase must be matched by a dollar of spending cuts, remains in effect. So he’ll honor that with a $1 trillion increase in the debt limit. Tax increases do not count as deficit reduction in Boehner’s equation; only spending cuts will register for increasing the debt limit.

This is not at all what the Administration seeks out of the deal, and in fact would represent a serious setback, because it would perpetuate this pairing of spending cuts and debt limit increase, which doesn’t make sense; why should the government’s borrowing capacity to cover spending already authorized by Congress be paired with future cuts to that spending? More important, it would allow a new hostage crisis early in 2014. Boehner would have successfully exacted concessions from a weaponized debt limit for the second time.

Boehner’s offer is really no different than his long-held position on this point.

This also puts the lie to the idea that you could create a “grand bargain” that will finally put these budget issues to rest. Boehner’s deal, if it went into motion, would reduce the deficit by $2 trillion. That’s on top of $1.5 trillion from the debt limit deal last year. Add in savings from ending the wars in Iraq and Afghanistan, and you’re at $4.5 trillion in deficit reduction, past the targets set by most bipartisan commissions on this point. And Boehner’s only assurance on this score is that he would not hold the government hostage for more spending cuts until late 2013. No negotiation will end these fights, as long as Republicans can find a political advantage in continuing to press them.


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