Deficit reduction: Who matters now in Washington?
The debt-ceiling legislation enacted Tuesday gives President Obama all-but-unstoppable power to raise the borrowing limit, but it also leaves him on the sidelines for the crucial next round of deficit-reduction talks. That means the most important players will be the four people picking the 12 lawmakers who'll be conducting those talks: Speaker John Boehner (R-Ohio) and Minority Leader Nancy Pelosi (D-San Francisco) in the House, and Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) in the Senate.
The leaders have two weeks to appoint the members of the Joint Select Committee on Deficit Reduction. Given their comparatively polarized constituencies, Boehner or Pelosi can be expected to pick House members who will toe their respective party lines on the hot-button issues of tax increases, Medicare cuts and reductions in Social Security benefits. Reid and McConnell will face pressure to do the same, but their troops are not as wedded to their parties' talking points. Witness the support numerous senators have expressed support for the centrist, sacred-cow-puncturing plan put forward by the bipartisan Gang of Six.
Here's where things get interesting....
The most likely scenario, I think, is a senator breaking party ranks. But whether there will be seven votes on the committee for any plan depends largely on who the four leaders choose for its membership.
Of course, a plan that attracts only seven votes in the select committee could have a tough time getting through both the House and the Senate. On the other hand, if Congress rejects it or Obama vetoes it (and the veto is sustained), that would trigger $1.2 trillion worth of mindless across-the board cuts in federal programs, excluding the biggest entitlements. It also would bar Obama from raising the debt ceiling next year without Congress' support, leading to another round in the high-stakes game of chicken that lawmakers and the White House just played.
Those enforcement mechanisms give leverage to any faction that cares more about cutting spending than about increasing revenues or protecting the defense budget. The latter would be whacked by $500 billion over 10 years if the across-the-board reductions were invoked, in addition to the $400 billion called for in the first round of cuts.
Whatever direction the committee goes, Obama has no way to force it to take a "balanced" approach to deficit reduction that includes revenue increases along with spending cuts. That doesn't mean he can't add taxes to the deficit-reduction mix later, however. The Bush-era tax cuts are set to expire at the end of 2012, and Obama could veto any bill to extend them. That gives him some leverage to push for a tax overhaul -- if not during the joint select committee negotiations, then during campaign season next year.
-- Jon Healey
Photo: Senate Minority Leader Mitch McConnell (R-Ky.) and House Speaker John Boehner (R-Ohio) discuss the debt-ceiling negotiations. Credit: Alex Wong / Getty Images