Super Committee

Report: Super Committee GOPers Agree To Violate Norquist Pledge...With A Catch

Brian Beutler | November 7, 2011, 4:12PM

Grover Norquist

Super Committee Republicans are floating a trial balloon that would produce new tax revenue, in apparent contravention of Grover Norquist's taxpayer protection pledge, according to Wall Street Journal editorialist Stephen Moore.

But as Moore explains that the offer has a catch:

One positive development on taxes taking shape is a deal that could include limiting tax deductions, perhaps by capping write-offs on charities, state and local taxes, and mortgage interest payments as a percentage of each tax filer's gross income. That idea was introduced on these pages by Harvard economist Martin Feldstein.

In exchange, Democrats would agree to make the Bush income-tax cuts permanent. This would mean preventing top rates from going to 42% from 35% today, and keeping the capital gains and dividend tax rate at 15%, as opposed to plans to raise them to 23.8% or higher after 2013.

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Paul Ryan

Paul Ryan Takes On Elizabeth Warren And The 99 Percent

Brian Beutler | October 26, 2011, 1:12PM

Senate Candidate Elizabeth Warren (D-MA) and Rep. Paul Ryan (R-WI)

Democrats want the 2012 elections to turn on the question of which party has a better vision for the country, and to win the ensuing battle of public perception, both parties are putting the brightest shine they can on their particular designs.

On Wednesday, the GOP pitted conservative darling Paul Ryan against liberal hero Elizabeth Warren, with Ryan serving as a tribune to wealthy Americans and Warren as a populist fighter for working people.

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Super Committee

In Letter, House Progressives Press Super Committee On Jobs, Protecting Medicare, Medicaid, Social Security

Brian Beutler | October 6, 2011, 1:33PM

Rep. Raul Grijalva

House progressives will press the joint deficit Super Committee to ditch entitlement cuts and pass measures to bolster the economy.

The co-chairs of the Congressional Progressive Caucus are rounding up Democratic signatures on a letter, obtained by TPM, pressing the 12 member panel to pair emergency jobs legislation with deficit reducing measures based on tax increases on wealthy Americans.

"We ask that you lead the Select Committee by these simple core principles," write Reps. Raul Grijalva (D-AZ) and Keith Ellison (D-MN). "The American people have spoken loud and clear on their priorities for our nation. They want Social Security, Medicaid and Medicare protected, they want billionaires and corporations to finally pay their fair share and they want to be able to get back to work to earn a fair living."

Their effort is partially bolstered by a new CBO analysis, which found that the unemployment crisis is a massive driver of the deficit. In other words, effective job creation measures will go a good way toward closing the near and medium term hole in the budget.

You can read the entire letter, which has not yet been delivered to the Super Committee co-chairs, below the fold.

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Super Committee

Super Committee Dems Avoid Trap That Skewed Debt Limit Fight

Brian Beutler | September 28, 2011, 2:41PM

'Super Committee' members Sen. Patt Murray (D-WA) and Sen. John Kerry (D-MA), September 7, 2011.

Democrats on the new deficit Super Committee are determined to be better negotiators than their predecessors in earlier deficit discussions leading up to the debt limit fight.

According to aides with knowledge of the discussions, they're trying to keep the panel's early focus on revenues, to avoid falling into a familiar trap of agreeing to a bunch of spending cuts only to have Republicans freeze up when they try to change the conversation to taxes.

A bit of background is appropriate here.

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Super Committee

Super Committee Riven By Major Divide Over Basic Facts

Brian Beutler | September 14, 2011, 5:59AM

Rep. Jeb Hensarling (R-TX)

Political debates over deficits and debt are always marked by obfuscation and technicality. The numbers are huge and frightening, the terms obscure and technical, and the simple, fundamental point of the argument gets buried underneath this avalanche of panic and esoterica.

But for a brief moment Tuesday, under questioning from Sen. Max Baucus (D-MT), Congress' top economic analyst made it perfectly clear to everybody who was listening.

"I think really the fundamental question for you is not how we got here, but where you want the country to go, what role do you and your colleagues want the government to play in the economy and the society?" said Doug Elmendorf, who heads the Congressional Budget Office. He was addressing the six Democrats and six Republicans on the new joint deficit committee, and for three hours he did his best not to get buried under the same avalanche.

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Super Committee

Super Committee Democrats Want More Deficit Reduction

Brian Beutler | September 6, 2011, 4:06PM

Rep. Chris Van Hollen (D-MD)

The key dilemma facing President Obama and Congressional Democrats is that Republicans are wholly unwilling to support any new job-creating spending projects -- even projects with bipartisan support -- unless they're offset with spending cuts or savings elsewhere in the budget.

Thus, Democrats on the new joint deficit Super Committee will seek more than the $1.5 trillion in deficit reduction they've been tasked with finding, in order to help offset some of those costs.

"All of us would like to set as a target for ourselves even more than $1.5 trillion," Rep. Chris Van Hollen (D-MD), who's also the top House Democrat on the Budget Committee, told reporters at a Tuesday Capitol press conference.

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Super Committee

Top Republican Staffer To Serve As Staff Director For Super Committee

Brian Beutler | August 30, 2011, 11:08AM

Sen. Patty Murray (D-WA)

"Super Committee" co-chairs Rep. Jeb Hensarling (R-TX) and Sen. Patty Murray (D-WA) have announced that the panel's top staffer will be senior Republican Senate Finance Committee aide Mark Prater.

"The know-how and experience Mark brings to this difficult task is exactly what we agreed must be the top priority for the staff serving all the members of this Committee," Murray and Hensarling said in an official statement. "Mark has a well-earned reputation for being a workhorse who members of both parties have relied on. We look forward to working with him and are confident that his approach and expertise will be valuable as we weigh the difficult but necessary choices ahead."

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Russ Feingold

Feingold To Press Dems To Abandon Any Unbalanced Super Committee Deal

Brian Beutler | August 23, 2011, 12:36PM

Former Sen. Russ Feingold (D-WI), June 12, 2011.

Former Sen. Russ Feingold and his new group Progressives United are petitioning the six House and Senate Democrats serving on the joint deficit Super Committee to walk away if Republicans don't budge on tax increases, and insist on cutting entitlement benefits.

"If we don't get our policy priorities, Democrats need to be ready to walk away from the deal," Feingold emailed his supporters. "You can guarantee extremists on the other side will continue to push relentlessly to give even more to corporations and put even more of the burden on the middle class. We have to fight harder than they will."

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Super Committee

The Stage Is Set! For Super Committee Gridlock?!

Brian Beutler | August 15, 2011, 6:05AM

Clockwise: Speaker John Boehner (R-OH), Senate Majority Leader Harry Reid (D-NV), House Minority Leader Rep. Nancy Pelosi (D-CA) and Senate Minority Leader Mitch McConnell (R-KY)

We now know who's serving on the 12-member deficit Super Committee this fall. We know who the two co-chairs will be, we know many if not all of the requirements it must meet, and we know what happens if it fails.

Which means we know the battle lines and can project with some certainty how the fight will play out.

Of the six Democrats on the committee, most if not all have publicly proclaimed they'll support certain cuts to Medicare and Medicaid -- particularly if they fall hardest on providers and not beneficiaries -- but only if Republicans are willing to accept some "meaningful" new tax revenues.

Of course, all of the six Republicans have pledged never to support tax increases, and most if not all have demonstrated extreme reluctance over raising any revenues at all, including from loophole closures that benefit extremely few privileged individuals and businesses.

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Debt Ceiling

After Triggering Downgrade, Debt Default Skeptics Try To Run From Their Records -- But They Can't

Brian Beutler | August 12, 2011, 10:16AM

Standard & Poors has a specific justification for downgrading the U.S. bond rating, and it's deadly for Republicans. It wasn't just that Congress showed itself to be reckless and dysfunctional, or that the GOP shows no sign of ever ending their anti-tax jihad. It's that for a period of weeks, some lawmakers (read: Republicans) were quite literally shrugging off the risks of blowing past the August 2 deadline, running out of borrowing authority, and missing payment obligations.

"[P]eople in the political arena were even talking about a potential default," said Joydeep Mukherji, senior directior at S&P. "That a country even has such voices, albeit a minority, is something notable," he added. "This kind of rhetoric is not common amongst AAA sovereigns."

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Harry Reid

Reid Picks Murray, Kerry, Baucus For Super Committee -- Here's The Upshot

Brian Beutler | August 9, 2011, 6:15PM

Senate Majority Leader Harry Reid (D-NV), Sen. Max Baucus (D-MT) and Sen. Tom Harkin (D-IA)

Senate Majority Leader Harry Reid (D-NV) has announced that Sens. John Kerry (D-MA), Patty Murray (D-WA), and Max Baucus (D-MT) will serve a new deficit Super Committee. Murray will be the Democrats' top member.

"I have great faith in Senator Murray as the co-chair of the committee," Reid said in a statement. "Her years of experience on the Senate Budget and Appropriations committees have given her a depth of knowledge on budget issues, and demonstrated her ability to work across party lines. Senators Baucus and Kerry are two of the Senate's most respected and experienced legislators. Their legislative accomplishments are matched only by their records of forging strong bonds with their Republican colleagues."

Entitlement defenders were hoping for a more progressive bunch than this. But the key on the Democratic side of the new committee isn't so much whether members will agree in principle to some entitlement cuts -- most say they will -- it's whether they'll require as a concession that Republicans agree to increase tax revenues.

And through that prism, there's some reason for optimism.

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Medicare

Obama Sides With Panetta On Need To Cut Medicare Over Defense

Brian Beutler | August 8, 2011, 3:32PM

Secretary of Defense Leon Panetta

Last week, Congressional Democrats were blindsided by newly-confirmed Defense Secretary Leon Panetta, who basically nixed any further cuts to military spending, and demanded that lawmakers trim from programs like Medicare and raise taxes to reduce future deficits.

Soon a new deficit Super Committee will begin debating tax and entitlement reform, and the penalty if they gridlock includes steep defense cuts. Republicans are expected to seize on Panetta's remarks to push for another deficit deal that comes exclusively from entitlement cuts. So Rep. Barney Frank (D-MA) called on President Obama to repudiate Panetta.

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Bush Tax Cuts

S&P Downgrades U.S. AAA Bond Rating To AA+, Outlook Negative

Brian Beutler | August 5, 2011, 8:38PM

As threatened, the ratings agency Standard & Poors has downgraded the country's AAA bond rating, despite acknowledging, according to multiple reports, that their initial calculations included a $2 trillion error projecting U.S.'s debt-to-GDP ratio over time.

You can read the entire explanation below the fold. But the key is that the use of the debt limit as a legislative bargaining chip, combined with gridlock in Congress, led S&P to publicly conclude that the country will have a hard time restoring gravity to its debt trajectory.

However, while they parcel blame across Congress -- implying Democrats are rigidly opposed to cutting entitlement spending -- they hint that Republican intransigence to raising tax revenues is more troubling.

From the agency's press release:

"We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process," reads a statement from S&P. "We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade."

S&P continues:

The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

Full press release below.

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Leon Panetta

Dems Take On Panetta For Pushing Medicare, Social Security Cuts Over Defense Cuts

Brian Beutler | August 5, 2011, 4:11PM

Leon Panetta

A fight is brewing on the right, between anti-tax zealots and big military types over who takes the next hit in the continuing fight over deficits. The prospect excites progressives, who see a rare opportunity to force the GOP to slaughter one of their sacred cows, and rip the party apart in the process.

But the left is poised for a similar internal battle.

The tensions on both sides of the aisle were set in motion by the debt deal, which created a powerful, bipartisan deficit committee tasked with finding over $1 trillion in savings over the next 10 years. If it gridlocks, though, it will trigger automatic spending cuts, including about half a billion dollars from defense.

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Debt Ceiling

Legislating By Crisis: A Chronicle Of The Coming Hostage Dramas On Capitol Hill

Brian Beutler | August 4, 2011, 6:10AM

House Speaker John Boehner (R-OH), House Majority Leader Eric Cantor (R-VA) and Sen. Mitch McConnell (R-KY)

Of the four party leaders on Capitol Hill, Senate Minority Leader Mitch McConnell (R-KY) is the most disciplined. So when he says, for instance, his top priority is making Barack Obama a one-term President, it isn't a slip up. With that in mind, here's what he told the Washington Post about the debt limit fight.

"I think some of our members may have thought the default issue was a hostage you might take a chance at shooting. Most of us didn't think that. What we did learn is this -- it's a hostage that's worth ransoming. And it focuses the Congress on something that must be done."

This captures the legislative dynamic on Capitol Hill with blunt honesty. When they won an extension of the Bush tax cuts in December 2010, before their newly elected members were sworn in, Republicans settled on a strategy that works -- and they'll have plenty of opportunities to employ it again in the months ahead.

In fact it's already happening.

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Medicare

Cantor: We Can't Keep Medicare Promise For Young People

Brian Beutler | August 3, 2011, 4:00PM

House Majority Leader Eric Cantor (R-VA)

Republicans' pledge to never raise taxes is inviolable whereas the government's pledge to provide retirees with health care will have to be broken at some point, according to House Majority Leader Eric Cantor. And we'll see evidence of this, he hinted, if and when the House of Representatives refuses to pass future deficit reduction legislation if it calls for bringing new tax revenue into the Treasury.

In a meeting with editors of the Wall Street Journal, Cantor said Americans must "come to grips with the fact that promises have been made that frankly are not going to be kept for many."

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Harry Reid

Pelosi: My Deficit Committee Members Will Oppose All Entitlement Benefit Cuts

Brian Beutler | August 2, 2011, 2:32PM

The debt limit fight is over, but the fight over entitlement programs will continue for months. In the weeks ahead, the leaders of both parties in both the House and Senate will name three members each to a new committee tasked with reducing the deficit by at least $1.2 trillion.

The ultimate makeup of that committee is key. It will determine whether this Congress will pass further fiscal legislation, and, thus, what the major themes of the 2012 election will be.

At a pre-recess press conference Tuesday afternoon, TPM asked House Minority Leader Nancy Pelosi (D-CA) whether the people she appoints to the committee will make the same stand she made during the debt limit fight -- that entitlement benefits -- as opposed to provider payments, waste and other Medicare spending -- should be off limits.

In short, yes.

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Debt Ceiling

The Four Big Problems With -- And Four Silver Linings Around -- The Debt Limit Deal

Brian Beutler | August 1, 2011, 11:00AM

President Barack Obama

Progressives are furious. Conservatives are somewhat less furious. And for the most part all anybody knows about the budget plan is that it cuts a lot of spending over 10 years, and includes no guarantees that anybody -- particularly the well-off -- will pay more in taxes. Thus, the anger: after huge tax cuts for the rich, two unfunded wars, and a financial crisis triggered by Wall Street greed exploded budget deficits, the people asked to narrow the gap are overwhelmingly regular folks.

All of this while the economy is still reeling. It might not be as bad as this, but there's certainly a lot missing here.

So with that background in mind, here are the four worst problems with, and four silver linings around the debt limit deal.

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Debt Ceiling

Levin Expresses Dem Frustration With Obama And The Looming Debt Limit Deal

Brian Beutler | July 31, 2011, 2:49PM

Sen. Carl Levin (D-MI)

Speaking with reporters after Sunday's failed debt limit vote, Sen. Carl Levin (D-MI) criticized President Obama for not seizing the initiative and forcing a balanced plan for deficit reduction. He also explained the problems with and merits of a still-forming bipartisan plan that will raise the debt limit.

The key for now, as explained here, is that it avoids default in a way that assures deep spending cuts over the coming decades -- including to entitlement programs -- but provides no guarantees of higher tax revenues.

Specifically the plan calls for a new congressional committee to make and expedite tax and entitlement reform recommendations before the end of the year. If the reforms fail, early leaks suggest that would trigger across the board spending cuts -- including to defense and entitlements -- but no new tax revenue.

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Debt Ceiling

BREAKING: Dems Delay Debt Limit Test Vote

Brian Beutler | July 30, 2011, 9:31PM

Senate Majority Leader Harry Reid (D-NV)

Senate Democrats have delayed a key Sunday morning test vote on legislation to raise the debt limit, as negotiations to avoid a catastrophic debt default drag on.

Late Saturday, Senate Majority Leader Harry Reid (D-NV) announced on the Senate floor that the White House is making progress in those negotiations, but several issues remain unresolved.

"There are negotiations going on at the White House now on a solution that will avoid a catastrophic default," Reid said. "There are many elements to be finalized, there is still a distance to go before any arrangements are to be complete. I've spoken to the White House quite a few times this weekend, and they've asked me to give everyone as much time as possible."

Earlier Saturday, Dems were prepared for the 1 a.m. vote to fail, based on continued disagreement between the two parties over how to assure future cuts to entitlement programs and tax reform, according to a highly placed Democratic source. That vote is now scheduled for 1 p.m., Sunday.

Both the House and Senate debt limit votes call for the creation of a bipartisan, bicameral committee tasked with reducing the deficit by at least $1.8 trillion through entitlement and tax reform. But Republicans are reluctant to count that $1.8 trillion toward the debt limit increase unless there's a viable penalty in place that would be triggered if the committee gridlocks, Congress fails to pass their proposal, or President Obama vetoes it.

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Debt Ceiling

Now What? House GOP Passes Unviable Debt Limit Bill

Brian Beutler | July 29, 2011, 6:35PM

House Speaker John Boehner (R-OH)

It was supposed to happen Wednesday, then again on Thursday. It was supposed to be a squeaker, and potentially a viable measure to avoid default. But in the end there was no suspense, and the vote was mostly ceremonial. Early Friday evening, House Republicans passed legislation to raise the national debt limit -- their final symbolic gesture in a partisan debate that has raged for months and seen the GOP bring the country to the brink of economic collapse.

The final vote was 218 in favor to 210 against. Zero Democrats joined the majority, and only 22 Republicans voted with the Democrats.

When discussions between Boehner and President Obama over pairing a the debt limit extension and deficit reduction measures fell apart, the task of avoiding default fell to Congress -- and presented Boehner with a major challenge: How could he be both a responsible steward of the country and usher through bipartisan legislation to avoid a catastrophic default, and not break faith with his members.

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Debt Ceiling

Democrats Eye Potential GOP Supporters Of Reid's Debt Limit Bill

Brian Beutler | July 29, 2011, 4:38PM

Senate Majority Leader Harry Reid (D-NV)

John Boehner's debt limit bill, dead-on-arrival in the Senate, is on autopilot for passage in the House this evening. If as expected he sends it over to the upper chamber to be killed, he will actually speed up the process by which the Senate can pass its final debt limit bill, for parliamentary reasons outlined at the bottom of this post.

So the great guessing game in the Capitol right now is figuring out 1). Which Republican Senators will ultimately support Harry Reid's debt limit bill, and 2). What changes will have to be made to it between now and midnight to make sure enough of them are on board so the bill doesn't go down in flames in the wee hours of Sunday morning.

Right now, Democrats are looking to about 11 gettable GOP votes: Sens. Olympia Snowe (R-ME), Susan Collins (R-ME), Bob Corker (R-TN), Mark Kirk (R-IL), Scott Brown (R-MA), Lamar Alexander (R-TN), Lisa Murkowski (R-AK), Kay Bailey Hutchison (R-TX), Saxby Chambliss (R-GA), Mike Crapo (R-ID), and Tom Coburn (R-OK). The last three were the Republican members of the Gang of Six deficit reduction group.

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Debt Ceiling

Republicans And Democrats Decry Each Other's Nearly Identical Debt Limit Plans

Brian Beutler | July 28, 2011, 5:52AM

House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV)

Republicans and Democrats inveigh against each others' competing debt limit bills with about equal intensity. Harry Reid's bill is filled with gimmicks and phantom cuts, Republicans claim. John Boehner's doesn't get the job done deficit-wise, Democrats counter, and will likely result in a U.S. credit rating downgrade anyhow.

Members of both parties have threatened, implicitly and explicitly, that they'd rather not raise the debt limit -- that they'd rather risk the consequences of a debt default -- than allow the other's plan to pass unamended.

The irony in all this is that while both complaints are pretty fair, the plans themselves are so similar that under normal circumstances merging them into one bill would be easy. And yet, with the country's borrowing authority set to expire in less than a week, that isn't happening -- at least not until House Republicans choreograph one more symbolic vote, and heighten the Congress', the market's, and the country's growing sense of urgency.

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John Boehner

Why Boehner's Debt Limit Plan Will Have To Fail Before Endgame Becomes Clear

Brian Beutler | July 26, 2011, 5:17PM

House Speaker John Boehner (R-OH)

High level discussions continue between Democrats and Republicans to make sure Congress raises the debt limit before the Treasury runs out of borrowing authority and has to slash public spending on a massive scale. But for the moment, we're in a period of repose. In public, few are willing to budge too far off their own party's plan to raise the debt limit. And members and aides are now believe that a viable solution won't emerge until one of the existing, partisan plans fails publicly.

In other words, things haven't moved a whole lot since yesterday. For the moment, most participants expect that the House GOP plan, authored by Speaker John Boehner (R-OH) will move first, and will fail, either in his own chamber or in the Senate. But they're now pessimistic that a workable plan will emerge before then, something party leaders were hoping against hope for yesterday.

"I think so -- probably that's the case," Sen. Kent Conrad (D-ND) told reporters Tuesday afternoon.

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Harry Reid

Debt Deathmatch? Reid And Boehner Introduce Incompatible Plans To Avoid Default

Brian Beutler | July 25, 2011, 3:56PM

House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV)

As advertised, Senate Majority Leader Harry Reid (D-NV) and House Speaker John Boehner (R-OH) are pushing dueling plans to raise the debt limit on or before August 2, to avoid a catastrophic default. The plans are similar in key ways, but differ on perhaps the last sticking point in the debt limit debate: Whether the debt limit should be raised all the way into 2013, or whether Congress should replay this debt limit fight again early next year, to force Democrats and Republicans to pass entitlement and tax reforms.

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Harry Reid

Duel Or Duet? Reid And Boehner Poised To Introduce Different Bills To Avoid Default

Brian Beutler | July 24, 2011, 9:00PM

House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV)

Congressional leaders failed Sunday to reach agreement on a plausible path to raise the country's borrowing limit ahead of international market openings on Monday. At least publicly.

According to sources in both parties, House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV) are likely to introduce separate debt packages in their respective chambers Monday, each with a different approach to avoiding a catastrophic default, and the key question now is whether the two plans can be reconciled in some way -- whether the trains are moving in the same direction or set to collide head on.

Reid sought to answer that question in a late Sunday statement, ripping the GOP for its continued insistence that the debt limit fight be raised in two condition-laden steps, forcing Congress to replay this same fight in several months.

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Barack Obama

Boehner-Obama Talks Collapse, On To Plan B -- The Question Is Which One?

Brian Beutler | July 22, 2011, 6:39PM

President Barack Obama meets with Democratic and Republican leaders

House Speaker John Boehner (R-OH) has abandoned talks with President Obama. In a letter to House members Friday, Boehner said "I have decided to end discussions with the White House and begin conversations with the leaders of the Senate in an effort to find a path forward," to raise the debt limit and avoid default.

So where do we go from here? Tuesday, August 2, is the day the debt limit must be raised if the nation is to avoid defaulting on its debt and/or other payment obligations. Between now and then Congressional leaders of both parties will have to figure out exactly how they're going to avoid that.

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Mitch McConnell

Despite Bipartisan Support, Senate Leaders Say Don't Get Ahead Of Yourselves On Gang Of Six Plan

Brian Beutler | July 19, 2011, 3:26PM

Senators Mitch McConnell (R-KY) and Harry Reid (D-NV)

The alacrity with which Democratic and Republican senators have thrown themselves behind the Gang of Six's framework for deficit reduction -- including cuts to entitlement spending and major tax reform -- illustrates how desperate the Senate is to put the debt ceiling brinksmanship behind them.

But the leaders of both parties are well aware there's no time to ram this through the House and Senate before the United States defaults on its payment obligations early next month -- and increasing the country's borrowing limit has to be Congress' top priority.

Here's Senate Majority Leader Harry Reid (D-NV), addressing reporters in the Capitol on Tuesday.

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Debt Ceiling

Hoyer: Dems United Against Entitlement Benefit Cuts In Debt Fight

Brian Beutler | July 19, 2011, 1:15PM

House Minority Whip Steny Hoyer (D-MD)

House Minority Leader Nancy Pelosi (D-CA) has been clear for weeks that entitlement benefit cuts -- reducing the guarantees promised to Social Security, Medicare, and Medicaid beneficiaries -- are off the table in high-stakes negotiations to raise the national debt limit and avoid a catastrophic default.

But several Democrats have been on the record for years saying they'd consider or accept certain benefit cuts as part of a broad, balanced package to address long-term deficits. And that's raised the question of whether Pelosi would be able to hold the line if President Obama throws his weight behind cutting entitlement benefits as part of a "grand bargain" to reduce deficits by up to $4 trillion this decade.

Pelosi's lieutenant, Whip Steny Hoyer (D-MD), is one of the Dems who in the past has called for benefit cuts to be on the table -- alongside tax revenues, and savings -- as part of a bipartisan plan to bring the budget into balance. Today, though, he said he's with Pelosi 100 percent in the current fight, even if Republicans agree to a "grand bargain" that includes new tax revenue.

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Debt Ceiling

Congress Choreographs Its Way To Debt Limit Compromise -- So What Is It?

Brian Beutler | July 19, 2011, 5:54AM

President Barack Obama meets with Democratic and Republican leaders

If Republicans had their way, the Treasury Department wouldn't be granted the authority to issue new debt unless and until Congress -- two-thirds of both chambers -- sent a radically conservative Constitutional amendment off to the states for ratification.

That's what they'll spend Tuesday proving to voters -- particularly influential conservative leaders, who will be watching closely. In the House they'll pass legislation called the Cut, Cap, and Balance Act which imposes swift, deep spending cuts, and promises to raises the debt limit into 2013 if and only if scores of Democrats agree to a version of the Balanced Budget Amendment that basically forbids tax increases, and holds spending below historic lows.

That means the functional end of popular entitlement programs -- and that ain't gonna happen. So then it's on to another plan.

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Balanced Budget Amendment

It's A Trap! The Hidden Pitfalls Of GOP's 'Cut, Cap, And Balance' Plan

Brian Beutler | July 18, 2011, 1:24PM

House Speaker John Boehner (R-OH) with Senate Minority Leader Mitch McConnell (R-KY)

Tuesday, the House of Representatives will vote on, and likely pass, a conservative Republican plan called "Cut, Cap, and Balance." The package will include some immediate, as-yet unspecified spending cuts, a statutory cap to keep spending below 18 percent of GDP, and a promised separate vote on a Constitutional amendment that requires Congress to maintain a balanced budget, but essentially forbids any future tax increases.

It would also raise the debt ceiling through 2012 -- an ancillary benefit for Republicans who are looking for any way to pin the consequences of a debt default, should one happen, on Democrats. Indeed, the GOP feigned shock and anger Monday when the White House, as expected, issued an official veto threat -- turns out President Obama's the one threatening to wreak havoc on the country.

Of course, later in the week, the Senate will follow suit, and there Cut, Cap, and Balance is expected to fail.

For Republicans, it's the perfect alignment of popular sounding policies -- "spending cuts" a "balanced budget" and, finally, an end to this debt limit brinksmanship -- minus the a scintilla of accountability or transparency. And for Republicans trying to make nice with conservative activists, it will give them cover to later vote for a much more modest plan to cut some spending, raise the debt limit, avoid default. But the details have been intentionally obscured by most conservatives, and they reveal the plan to be the most radical fiscal policy the GOP has aligned behind in years -- one that makes the Republican's current budget proposal to phase out Medicare appear moderate by comparison.

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Debt Ceiling

CHART OF THE DAY: Goldman Says Debt Limit 'Plan B' Would Be A Big Deal

Brian Beutler | July 18, 2011, 5:45AM

Wall Street

Little noticed amid dire warnings from Wall Street, and increasing cacophony on Capitol Hill, the investment giant Goldman Sachs issued a report late last week concluding that even if Congress passes a relatively small budget deal when they raise the debt limit, it will still be a promising indication to investors that the U.S. fiscal trajectory will improve over the coming decade.

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Debt Ceiling

The Four Paths Forward On The Debt Limit -- And Why Each Seems Impossible

Brian Beutler | July 15, 2011, 3:54PM

President Barack Obama

Barring some unexpected and dramatic twist, come Monday the country will still be hurtling towards a potentially calamitous default on its national debt.

The only real development heading into the weekend was symbolic. Boehner agreed that the House will vote to raise the debt limit -- but only as part of a broader bill that would slash spending dramatically, institute a cap on federal expenditures, and call for a vote on a radical Constitutional amendment requiring balanced federal budgets and making tax increases functionally impossible. This plan is DOA in the Senate. But in transactional terms, it's meant to appease conservatives who probably won't vote to raise the debt limit under bipartisan circumstances.

Still, Congress has to actually raise the debt limit, and there are four possible avenues to getting that done on the table right now. Here's a description of each, in reverse order of likelihood.

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Debt Ceiling

Republicans Say They've Already Agreed To A Concession In Debt Fight: Raising The Debt Limit

Brian Beutler | July 11, 2011, 3:27PM

House Speaker John Boehner (R-OH), House Majority Leader Eric Cantor (R-VA), and other members of the GOP leadership

Republican leaders won't accept tax increases in exchange for deep entitlement cuts, and say they'll only raise the national debt limit in exchange for a spending cut package that's revenue neutral.

[TPM SLIDESHOW: Battle Over The Budget At The White House]

That leaves them vulnerable to the charge that they're not negotiating in good faith -- that they're refusing to budge on anything of ideological importance to them under the threat of a catastrophic debt default. So they need an answer when pressed: If President Obama has agreed in principle to cut entitlements, over howls of protests from members of his party, what are Republicans prepared to offer that amounts to similar political risk in their own party.

Here's what they've settled on: We'll agree to raise the debt limit!

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Paul Ryan

Rep. Ryan Tastes The Grapes Of Wrath

Susan Crabtree | July 8, 2011, 2:30PM

Rep. Paul Ryan (R-WI), a leading advocate of shrinking entitlement spending and the architect of the plan to privatize Medicare, spent Wednesday evening sipping $350 wine with two like-minded conservative economists at the swanky Capitol Hill eatery Bistro Bis.

It was the same night reports started trickling out about President Obama pressing Congressional leaders to consider changes to Social Security and Medicare in exchange for GOP support for targeted tax increases.

[TPM SLIDESHOW: Hey Big Spenders: What Else Could Wealthy Candidates Buy With All That Campaign Cash?]

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Debt Ceiling

Sources: House Dems Stunned By White House Debt Proposal, Read Obama The Riot Act

Brian Beutler | July 7, 2011, 1:15PM

House Minority Whip Steny Hoyer (D-MD) and House Minority Leader Nancy Pelosi (D-CA)

Multiple senior House Democratic aides tell TPM that caucus members were caught off guard by news stories about President Obama's push for deeper deficit and spending reductions -- and particularly about the White House's willingness to cut Social Security as part of a grand bargain to raise the debt limit.

At a private caucus meeting Thursday morning, House Minority Leader Nancy Pelosi (D-CA) told her members that if Obama's serious about putting Social Security on the chopping block, he'd left her in the dark about it. And after an at-times-contentious meeting about how open Dems should be to significant entitlement cuts, leaders departed to the White House to read Obama the riot act.

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Social Security

Poll: Majority Don't Want Entitlement Cuts To Reduce Deficit

Jon Terbush | July 7, 2011, 11:35AM

Despite all the talk about cutting the deficit, neither party has wanted to be the first one to put entitlements on the chopping block. A Pew poll released Thursday explains why, as it shows that a robust majority of Americans don't want the government to rollback benefits for entitlement programs, even if those cuts are made to reduce the deficit.

Six in ten Americans said it was more important to leave Social Security and Medicare benefits untouched than to make cuts as a way to reduce the deficit, roughly twice as many as the 32% who said the opposite.Further, 61% said Medicare recipients already pay enough of their health costs, while 31% said beneficiaries should pay more money into the program.

Those findings come as several reports indicate that the White House may offer cuts to both Social Security and Medicare in exchange for Republican concessions on other fronts.

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Paul Ryan

Ryan On 'MediScare' Attacks: 'Here's The Deal On Our Medicare Plan: ObamaCare Ends Medicare As We Know It'

Brian Beutler | July 5, 2011, 1:06PM

Rep. Paul Ryan (R-WI)

Rep. Paul Ryan (R-WI) just broke a land speed record for his pivot from decrying Democratic "Mediscare" attacks on the GOP budget to attacking Democrats for wanting to end "Medicare as we know it."

In an interview with WISN, a local ABC News Affiliate in Wisconsin, Ryan responded to the fact that his budget, endorsed by almost every member of the Republican party, is extremely unpopular.

"Whenever you lead and propose a solution to a complex problem, you're putting yourself out there to be distorted, to be demagogued to be lied about," Ryan said. "What's happening is the other party's chosen to try to scare senior citizens to try and get votes. Here's the deal on our Medicare plan: ObamaCare ends Medicare as we know it."

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Debt Ceiling

CHART OF THE DAY: 'Out Of Control Spending' Not Really Out Of Control At All

Brian Beutler | July 4, 2011, 11:25AM

It's taken as an article of faith in D.C. that government has gotten too big, spending is out of control, and Washington has to tighten its belt, just like everybody else. Even President Obama takes this view.

This has meant no small consequences for the federal budget. In the spring, Republicans launched an effort to slash tens of billions of dollars from non-defense discretionary programs -- money the government approves every year to pay for social services and other programs -- from the federal budget. That campaign almost ended in a government shutdown.

That same sliver of the budget is again under attack in the fight over whether to raise the national debt limit. Republicans want to reduce overall domestic spending and cap it for years going forward, so it can't exceed a set level. That means as time goes on, the population grows, and the cost of goods and services increases, the government will be spending less and less on the people who rely on these programs over time.

But a close look at the numbers reveals a few important, and frequently overlooked facts. Domestic discretionary spending is a small sliver of the budget. Our deficit and debts can be traced to the fact that spending on entitlement programs and defense has shot up, and tax revenues have plummeted to their lowest level in decades. But spending on domestic discretionary programs has grown much more slowly. And, if you correct for inflation, and for growing population, it turns out we're spending exactly the same amount on these programs as we were a full decade ago.

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Debt

Going Populist? Dems Put GOP On Spot Over Tax Benefits For The Super-Rich

Brian Beutler | July 1, 2011, 6:00AM

Several weeks after Republicans and Democrats began high-level negotiations to slash federal spending by trillions of dollars -- the GOP's price for raising the national borrowing limit, and avoiding a catastrophic debt default -- Democrats finally peeped up. New tax revenues, of some kind, of some amount, would have to be part of the deal.

The group, led by Vice President Joe Biden, had already identified nearly $2 trillion in cuts to discretionary and mandatory spending programs -- nearly enough to raise the debt limit through the end of 2012 and take a contentious issue off the table this election season.

That's when Democrats said, "your turn to give!" and put $400 billion in tax cuts on the table. Republicans balked. No tax hikes at all. Some Republicans have left the door open to closing certain indefensible loopholes. But party leaders have tried, for all intents and purposes, to take the tax code off the table. Cuts only.

The Democrats' response, from the rank and file up to President Obama, has been a political twofer. If Republicans are taking all taxes off the table, then they're playing reverse Robin Hood -- demanding trillions in cuts to social programs while refusing to budge on preferences to unfathomably wealthy special interests. It's class war, but in tactical sense. If they can make the GOP feel so uncomfortable that they agree to end special tax favors for the ultra-wealthy -- even if those favors don't ultimately cost that much money -- then maybe they can break the anti-tax firewall and encroach on $400 billion.

Here's what they're focusing on.

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