Friday, July 15, 2011 | 3:19 a.m.
President Barack Obama has given a deadline to lawmakers in advance of the ultimate default deadline on the debt — figure out what you can sell to your parties by this weekend, and let’s finish this.
It’s clear that everyone’s patience is wearing thin. Wall Street’s discomfort snapped into sharp focus when Moody’s credit rating service put the U.S. on the block for a downgrade Wednesday, and the S&P followed suit Thursday.
The negotiators, too, are fraying. The majority leaders of their respective houses, Harry Reid and Eric Cantor, spent more time Thursday trading personal barbs than policy solutions.
But convincing the wariest troops isn’t going to be easy.
Nevada’s Republican senator, Dean Heller, counts in that number. Since taking over John Ensign’s Senate seat, he’s had one of the most fiscally conservative voting records in the body, some would say, to a fault. Even before that, he didn’t shy away of voting against government budgets on principle, even where there was a bipartisan compromise on the table and the alternative was government shutdown.
Heller is well aware of the stakes, he says. But he is wary of agreeing to anything that doesn’t drill to what he considers the heart of the problem — a pattern of behavior that’s screaming for a long-term solution.
“I think they’re aggressively looking at $4 trillion, and that’s OK, because that’s a good short-term start,” Heller said. A reduction of $4 trillion is the largest-size plan on the table right now, and Republican House leaders have said it’s likely an impossible deal, because they, like Heller, don’t want to raise taxes, although some tax hikes are likely necessary, most economists agree, to achieve the sort of deficit reduction lawmakers have in mind without making draconian cuts to social spending.
“Even if we accept [the most aggressive] plan and come to a deal on that, by the end of this decade, we’ve still increased the debt by six trillion dollars,” Heller said.
A persistent problem with these potential debt deals is that when the Republican leaders demand to match raises to the debt ceiling with cuts, they’re not talking about the same stretches of time.
Even Cantor admitted Monday that it will be “a challenge” to convince his caucus to approve $4 trillion worth of wiggle room in the debt ceiling that buys the country another three or four years of borrowing authority, when it takes a decade for the parallel cuts to all take effect.
“We need to figure out how we’re going to do this long term,” he said.
For Heller, “long term” equates to a balanced budget amendment. Republicans in the Senate and House have been loudly stumping for a balanced budget amendment vote as part of the debt deal, even though they acknowledge it will do little to solve spending problems in the short term. Even the Paul Ryan budget outspent the confines of a balanced budget amendment.
“It took took us 50 years to get where we are today. We know we’re not going to fix it in five years, we’re not going to fix it in ten years,” Heller said. “But at some point, let’s get this balanced budget amendment out there so this cost curve will start decreasing at some point.”
The House has already scheduled a balanced budget amendment vote for next week. Reid does not seem to be in any hurry to do the same, though a group of Democratic senators have been working to write a “more modest” alternative amendment. Even if a balanced budget amendment passes Congress, it would take referendums in 38 states for it to become law, a pretty high bar to clear.
But at this point, some carrot of a political promise to tackle long-term debt (such as that amendment) may have to be traded to bring Republicans like Heller along to help raise the debt limit, if they can be brought along at all.
Members like Heller don’t like anything that bears the whiff of being a politically expedient deal, even one coming from the ranks of their own party.
Earlier this week, Senate Minority Leader Mitch McConnell offered up a last-ditch proposal that would change the Republicans’ bottom-line equation.
In every other deal they’ve laid out, Republicans have insisted that a rise in the debt limit by matched by an equal package of cuts. In McConnell’s proposal, Republicans would demand only political immunity in exchange to allow the debt limit to be raised by putting that authority in Obama’s hands through a three-step process. The upshot would be Republicans would never have to take a vote to raise the limit, a message they could take to the campaign trail.
Democrats have partially embraced the idea, because they say even if it’s a play not to get Republicans’ hands dirty, it’s also an acknowledgement from a top Republican that the country should be raising the debt ceiling. Even House Speaker John Boehner has said he thinks the idea “might be worthy at some point” if negotiators can’t deal on other terms.
But Heller doesn’t want to be anywhere near that sort of compromise, even if showcasing a strong stance against a sub-optimal debt limit package is part of his 2012 strategy.
“It’s very unsettling for me to think that we’re going to put together a back-up plan that does nothing but raise the debt ceiling and doesn’t make any structural changes in the way we do business here,” Heller said.