Initial thoughts on possible debt ceiling compromise. (Updated)
National Journal is reporting the outlines of what may be an interesting debt ceiling compromise.
While details are sketchy, if true, Republicans and conservatives should be happy with much of what Democrats and President Obama might agree to.
Of interesting notes:
- There will be an extension of days to allow Congress to slow things down without threatening default. To me, this could be key so Congress will be able to read any such bill and stop back door provisions or tax hike sneak attacks.
- 2.8 trillion in deficit reduction over 10 years. 1.8 trillion will come from the “super committee”. If the super committee cannot find any such reductions by November, then across the board cuts kick in – which come from medicaid and defense. Too bad there isnt more than a 2.8 trillion goal, eh?
- No net new tax revenue increases will be part of the committee’s discussion, reportedly. Of course what does that mean? Which base line is the committee working from? Would they be working from the basis that the Bush era tax rates go away meaning that there is a 3.5 trillion dollar tax increase over 10 years worked into the figures?
Worthy note not in the outline,
- Vote on a BBA. While I am a huge BBA supporter, I do not believe passage of a BBA should be a prerequist to any deal. I would be open to changing my mind if someone could show me how one attracts 20 additional senators to the Lee-Hatch BBA proposal.
- Congressional authority over the committee. Congress must vote on their recommendations. The committee should not be able to come up with proposals and pass it amongst its self and have the president sign it. To do so would mean Congress is ducking its Constitutional authority.
- Who will be on the committee? Republicans would be smart to put who are interested in cutting budgets as well as cutting deals. This means people more like Coburn and less like Rep Upton.
Over all the potential deal has promise to stabilize the situation and allow for serious discussion on the budget deficit reforms in the future.
It also points to the fact that Americans are interested in real solutions.
We should not count this as any sort of grand win. It isnt. Then again, for me, the entire eppisode wasnt over who won or lost. It was over what is right for this country and how we can best move the ball forward.
The battle may be over, but until there is a President and Senate majority who are willing to pass a Balanced Budget Amendment and make real cuts, the fight to control spending will not be over.
Following an ABC report, the deal may have serious flaws.
If such a deal allows the committee to implement taxes through a back door or gut defense spending while not touching entitlements as a pose to across the board cuts, then it is a bad deal.
Which report to believe? I do not know and wont know until more information comes to light.