Wednesday, July 27, 2011

Deficit Ceiling Game Plan Six Days Out

It appears that Boehner has the votes to get his bill passed in the House. Reid needs to then introduce his bill in the Senate. Word has it that McConnell has promised to Filibuster the bill. I suggest that Reid require McConnell & Co to physically maintain the Filibuster on the Senate floor, as allowed under the rules. We will then have the clock ticking on the deficit ceiling as the GOP visibly prevents the body from acting.

It is my preference that Reid introduce the Conrad bill that reduces the deficit $4 trillion over ten years, half through spending cuts and half through tax hikes on the rich. Contrary to the prevailing view, I think that such a vote will strengthen the position of Senate Democrats facing reelection next year.

Then - after Senate GOP caves in the bright lights - lets send Reid's bill and Boehner's bill to an ad hoc "conference". The stage will be set for a bill reducing the deficit $4T in the coming decade, 75% obtained through spending cuts. It will ultimately require Democratic support in the House, along with the GOP establishment, as the Tea Party is marginalized by the adults in the room. Our Triple A bond rating will be maintained.

Meanwhile, Obama needs to announce that we will meet our interest obligations until a deal is done, but everything else will be paid $.50 on the dollar. The pressure will come in handy.


Eric Martin said...

What if they can't pass either bill and scare themselves into raising just the debt limit with no bill attached at the 11th hour -- all the while screaming like little girls trapped in a wind storm on the playground.

Would anyone be surprised?

Baxter said...

Lawrence O'Donnell thinks you are right, Eric. He has been prescient of late and he shares your forecast...

Jim G. said...

They are not going to raise the dept ceiling without spending cuts.

Of course what we are arguing about, and Baxter in his post places in only political terms, is whether we go bust now or later.

The excess spending and promises of the L/P/S have led us to this point. No amout of "taxing the rich" will cure or ills.

I find myself going back and forth on who is "winning". I thought "O" was up when there was some agreement on spending cuts and small tax increases, now, I think the non MSNBC portion of the country gets it, admires the Conservatives for standing firm and at least now they are winning the debate.

As to politics, its a long time from now but "O" was elected with high liberal turn out and some frustrated moderates. I just don't see the same passion for turn out next time (single vote loss) and many moderates will go the other way (2 vote loss).

We shall see, yes it is a long time away.

Baxter said...

Polls tell us both sides are losing politically in this stalemate. Americans overwhelmingly support a balanced approach with spending cuts and tax hikes.

My proposal ends up reducing the deficit a lot more than anything currently on the table. That is no surprise, as deficit reduction is not a priority of those in charge at the House of Representatives.