Compromise on the Horizon?

Boehner and McConnell are talking optimistically about a compromise. Ed Morrissey suggests one possible shakeout:

My prediction is that we will see a deal structured in two installments of the debt-ceiling hike using the McConnell mechanism, which combined will hit the amount Reid wanted, and with the cuts and assumptions built into the Boehner proposal (with possibly a few changes, which should be checked), with a commitment for a balanced-budget amendment vote in the Senate included.

What Kind of Compromise?

The Boehner bill has failed in the Senate. The Reid bill will fail in the House. Right now, Republicans and Democrats are negotiating to forge some kind of consensus for a bill that could pass the Senate and the House.

These, it seems to me, are the big points of contention:

• How big a raise in the debt ceiling? How many steps? Boehner's committed to a two-step process, in which an immediate increase in the debt ceiling would be followed by another vote in 6 or so months that would require the passage of a Balanced Budget Amendment. Reid's bill would offer enough of an increase to carry the debt past 2012.




• Role of a Balanced Budget Amendment? Boehner requires Congressional passage of one before a "second tranche"; Reid doesn't.




• Where are the cuts? How frontloaded are they? This is perhaps the most flexible and opaque part of discussion (as projected saving/spending often is).




• Power of appointed committee? Both proposals would have expedited review, but Boehner's proposal demands a certain threshold of savings before the passage of the "second tranche."

The exact placement of cuts is perhaps where Republicans can demand the most (because they might have to give elsewhere), especially in their insistence that they be more front-loaded and substantive.

I'm doubtful that Republican leadership (especially Boehner and McConnell) really want to see the debt-ceiling battle redux, so both Republicans and Democrats might have something to gain by avoiding a "second tranche" two-step. Both parties could split the difference perhaps by not allowing a second increase in the debt ceiling to take place without a vote on the recommendations of the savings committee; once the vote took place (yea or nay), the ceiling could be raised. Yes, that compromise would be mostly cosmetic.

A solid requirement that a BBA be passed before a second increase in the debt ceiling is likely a non-starter for a whole host of reasons. But demanding a vote on the BBA before a second debt-ceiling hike might be an appeasing gesture.

Negotiators might also find it helpful to demand concessions on issues beyond the budget in order to provide cover to various Republicans. Senate pledges to change Obamacare or light bulb bans or other conservative bette noires might help keep the support of House Republicans. Procedurally, some of those moves could be hard to execute, but they might provide a helpful avenue.

If Republicans want to reinforce the chances that an ultimate debt-ceiling reconciliation will pass, Senate Republicans might be wise to put forward a measure that gets more than the 7 or so Republican votes that would be needed to override a filibuster. A bill that comes out of the Senate as a RINO bill will have a harder time getting through the House (assuming any Senate-approved bill can avoid that stamp). Some Democratic defections in the Senate would likely make it easier for any compromise to be passed; it would increase the perception that the bill was "tough."

Update: The Hill has some specifics on one line of compromise: a two-step borrowing from the McConnell plan.

BBA + Boehner = ?

A few thoughts on the implications of Boehner adding a "Balanced Budget Amendment" to his debt-ceiling bill (which would now require that Congress pass a BBA before a second debt-ceiling increase could take place early in 2012):

Adding the BBA makes the bill very likely to pass the House. This addition appeases Tea Partiers, who had denied Boehner the majority he needs to pass it.

The Boehner bill as it stood on Thursday night might not have been able to pass the Senate; the Boehner bill of today definitely can't. The very thing that makes the bill likely to pass the House---its Tea Party pedigree---will kill it in the Senate.

If Congress is really required to pass a BBA before a second hike in the debt ceiling, prepare for the same gridlock six or so months from now.

In order for the debt ceiling to be increased, Republicans and Democrats will have to compromise. That means especially that Tea Partiers will have to compromise. In a democratic republic, you don't control less than a quarter of the votes and get to dictate policy to everyone. And threatening to bring the house down unless a supermajority of Congress agrees to the passage of a methodologically unconservative Balanced Budget Amendment is not compromising.

Beware the "second tranche." The current battle over the debt ceiling has exacted a considerable price on Congressional Republicans and has risked an economic-fiscal-financial meltdown. Going for another round about this issue, when the players will be the same, seems like it might not be the most effective. I know the existence of a "second tranche" is one of the biggest differences between the Boehner and Reid plans (the latter would raise the debt ceiling until after the next election), but I think Sen. Bob Corker (R-TN) has some wisdom here in doubting the value of a second hike so soon after the first. The debt-ceiling debate has sucked up a lot of air that conservatives could have used to advance other small-government policies.

Perhaps the biggest advantage of adding the BBA to the Boehner bill is that it gives Republicans something more to trade away. The inclusion of the BBA will give Republicans some more negotiating room if there is to be a Boehner-Reid compromise package.

The following is one possible (perhaps, at this hour, the most probable) course of events:

1. House passes Boehner + BBA.
2. Senate passes Reid-like bill.
3. Some compromise measure comes out of conference. (This will very likely not have a strong BBA requirement.)
   

The Senate would likely pass any compromise, and Republicans will have a stronger hand in negotiations over the compromise if the caucus stays united; anything that increases the power of Nancy Pelosi in negotiations will ultimately undermine the position of conservatives, and the more votes Boehner needs from Democrats, the stronger Pelosi will be.

If the economy crashes because of a refusal to raise the debt ceiling, Republicans will be blamed. The failed vote on the Ryan plan may have damaged the ability of Republicans to attack Obamacare for its cuts to Medicare; Republicans should be wary of closing off another line of attack in 2012. Right now, Obama has increasing ownership of the economy, and Republicans have been able to creep away from the disastrous tail end of George W. Bush's economic policies. If the economy tanks and the debt ceiling is not raised, Democrats (and their allies in the media) will be pointing fingers at the "absolutists" in the Tea Party and GOP caucus who would not compromise. Those attacks will very likely work or at least muddy the waters enough to limit the effectiveness of Republican economic critique in 2012. The economy already may be slowing down; refusing to raise the debt ceiling will be a way to take partial ownership of a double-dip recession.

No matter how "virtuous" or "pure" the Tea Partiers are, an Obama victory in 2012 would very likely close the door on the kind of reforms that many conservatives would prefer. Numbers in Congress are against Tea Party-style reforms, and, in a democratic republic, numbers matter a lot. Rather than fuming or threatening or beating one's chest in self-congratulatory self-adulation, far better to engage in the hard work of rational persuasion, sober compromise, and hopeful deliberation. Will any budget "deal" be pretty bad from a conservative perspective? Probably. But we can work to make such a deal as least bad as possible. That's what conservatism---and rational governance---is about.

(Crossposted at FrumForum)

Best Option?

Many in the conservative establishment are starting to rally behind the Boehner plan. Interestingly, lines of defense of this plan often suggest that opposition to this plan helps Obama.

The WSJ stresses that the debt ceiling has to be raised---and that Boehner's plan is the most fiscally conservative viable path to doing so:

But what none of these critics have is an alternative strategy for achieving anything nearly as fiscally or politically beneficial as Mr. Boehner's plan. The idea seems to be that if the House GOP refuses to raise the debt ceiling, a default crisis or gradual government shutdown will ensue, and the public will turn en masse against . . . Barack Obama. The Republican House that failed to raise the debt ceiling would somehow escape all blame. Then Democrats would have no choice but to pass a balanced-budget amendment and reform entitlements, and the tea-party Hobbits could return to Middle Earth having defeated Mordor.

This is the kind of crack political thinking that turned Sharron Angle and Christine O'Donnell into GOP Senate nominees. The reality is that the debt limit will be raised one way or another, and the only issue now is with how much fiscal reform and what political fallout.

Meanwhile, Bill Kristol takes aim at "purist" opponents of the plan:

This isn’t some bad bipartisan establishment deal of the sort conservatives have sometimes opposed in the past. Then conservatives were opposing Democrats as well as Republicans, and could plausibly explain why doing so was in conservative interests. Now, Heritage Action and the Club for Growth are siding with and strengthening Barack Obama and Nancy Pelosi and Harry Reid. They’re working to produce a policy and political defeat for John Boehner and Eric Cantor and Paul Ryan and the Republican majority in the House. This isn’t principled conservatism. This is self-indulgence masquerading as principle, sectarianism masquerading as conservatism.