It was always going to come down to this question on the debt limit: Can Speaker John Boehner (R-Ohio) negotiate a compromise with President Barack Obama that wins the backing of the majority of his Conference while averting a fiscal disaster for the nation?
The decision of House Majority Leader Eric Cantor (R-Va.) to bail on the bipartisan talks last week has put the onus squarely on Boehner to negotiate a deal for the entire Republican Party, and he has little more than a month in which to do it.
But even as it seems that both Republicans and Democrats are boxing themselves in on what they will consider and what they won’t, there may be a few loopholes that Boehner and the president can exploit.
Still, Boehner’s choice will be between compromising to get Democratic votes and upsetting his base or keeping to a hard line that satisfies conservative firebrands but risks a potentially catastrophic default on the nation’s debt obligations.
If Democrats and Obama ultimately buckle on their demand that new revenues be part of any deal to raise the debt limit, Boehner could win big with spending cuts of up to $2.4 trillion.
But there’s no indication yet that Senate Democrats, House Democrats or the president are even close to blinking.
“The president is willing to make tough choices, but he cannot ask the middle class and seniors to bear all the burden for deficit reduction and to sacrifice, while millionaires and billionaires and special interests … are let off the hook,” White House spokesman Jay Carney said Friday.
If there’s no deal and the nation plunges into a fiscal crisis, the political risks for both sides are obvious.
And if Boehner negotiates a true compromise that eliminates some special interest tax breaks — such as those for ethanol — he will face a backlash from the likes of Grover Norquist, head of Americans for Tax Reform, which has persuaded most Republicans to sign a strict anti-tax pledge. It’s not clear whether Boehner could sell such a deal to the party’s conservative base, several House Republicans and aides said.
Boehner issued a statement Friday setting out markers for getting a deal to raise the debt limit.
“The president and his party may want a debt limit increase that includes tax hikes, but such a proposal cannot pass the House,” Boehner said.
He also reiterated that any cut in spending must exceed any increase in the debt limit and that future spending must be restricted.
“These are the realities of the situation. If the president and his allies want the debt limit increased, it is only going to happen via a measure that meets these tests,” Boehner said. “If the president puts forth such a proposal, he has my word that the House will act on it. But a measure that fails to meet these tests cannot pass the House.”
That statement doesn’t appear to leave much room for compromise. But Cantor, Boehner and other leaders have studiously avoided saying whether cutting tax breaks for ethanol and other industries could be part of a package.
Some GOP aides said those sorts of proposals have been on the table. The elimination of the ethanol subsidy is particularly popular among Republicans, and several leadership aides said the GOP could agree fairly quickly to kill other similar breaks.
Even the elimination of oil and gas subsidies could make it into a final agreement, several aides said, though that could prove difficult to sell to the Conference.
Rep. Tom Cole (R-Okla.) noted that any package will probably need Democratic votes and won’t be particularly popular for either side. While general tax increases can’t get the votes, there might be some flexibility on getting rid of corporate tax breaks.
“My personal opinion is there probably is some flexibility in that regard,” Cole said. But he added: “Nobody’s going to tip their hand on that this early in the process. At the end of the day, you either trust your negotiator or not. I trust John Boehner.”
Cole said tax rates simply can’t be part of the equation.
“From our standpoint, the president took taxes off the table in December. You can’t put them back on the table in June,” Cole said.
House Minority Whip Steny Hoyer (D-Md.) said he would work with Boehner and Cantor to get Democratic votes for a reasonable deal, but he added that his party’s votes would evaporate if Republicans insist on deep cuts without any new revenue.
“The trick would be not to make something so draconian … to get Boehner’s votes that you lose the votes [of Democrats],” Hoyer said. “If the Speaker believes that there is a formula with $2.4 trillion in spending cuts, without revenues, he ought to put it on the table. I don’t think he can get there.”
Boehner also has to attend to members of the conservative base, many of whom were unhappy with the deal that he cut on the continuing resolution earlier this year. Conservatives complained that agreement had fewer spending cuts than advertised.
“He’s going to have to get around” that distrust, one GOP leadership aide said last week.
Cantor’s ambitions could also limit Boehner’s flexibility, lest he appear to be weak in comparison to his second-in-command. When Boehner appointed Cantor to Vice President Joseph Biden’s debt ceiling talks, many aides speculated it was because the Speaker hoped to force Cantor into owning part of the deal. But Cantor’s abrupt decision Thursday to quit negotiating put the responsibility back in Boehner’s lap.
The Majority Leader’s decision upset some Republicans initially, but he has since seen a wave of support, particularly from conservatives.
“Boehner doesn’t have any option but to come out and be there with Cantor,” a leadership aide said.
Aides speculated that Cantor’s work on the agreement could end up benefiting Boehner by helping to put together the basic foundation of an agreement that most Republicans could support.
But the terrain remains treacherous. Democrats took Cantor and Senate Minority Whip Jon Kyl (R-Ariz.) to task Friday for quitting the talks.
Rep. Chris Van Hollen (D-Md.), who had participated in the talks, said Friday, “The simple message Republicans sent yesterday … was unless we take their lopsided approach to reducing the deficit, they’re prepared to tank the economy and put millions of Americans’ jobs at risk.”