GOP split over debt strategy

By: David Rogers June 21, 2011 08:13 PM EDT

House Majority Leader Eric Cantor pushed back hard Tuesday against Senate Republican suggestions of a scaled-back, short-term debt deal, saying it’s “crunch time” in White House budget talks and “if we can’t make the tough decisions now, why … would [we] be making those tough decisions later.” “I don’t see how multiple votes on a debt ceiling increase can help get us to where we want to go,” the Virginia Republican told reporters. “It is my preference that we do this thing one time. … Putting off tough decisions is not what people want in this town.” Indeed, the next three days could very well define the success of the talks led by Vice President Joe Biden. As if sensing this, Cantor pressed for President Barack Obama to become more involved in the process — then quickly shied away from the suggestion that he and Biden are prepared to surrender the baton to the president and House Speaker John Boehner (R-Ohio). “When the president decides he wants to go and seal the deal with the speaker, we will be ready for that to happen at whatever point he wants to,” Cantor said. And with the Aug. 2 deadline now just six weeks away, the administration is betting heavily, too, on progress this week, hoping to cash in on the trust built up over prior meetings. This helps explain the urgency of Cantor’s response Tuesday to recent remarks by Senate Minority Leader Mitch McConnell (R-Ky.) raising the fallback of passing only a short-term debt extension with more modest deficit reduction goals to buy more time. It shows a real tactical split between the Senate and House GOP, which has much more to fear from multiple debt ceiling votes between now and the 2012 elections. But it’s also true that pressures from the right and tea party forces have left House Republicans far more divided over domestic spending issues than Cantor or Boehner readily admit. These divisions have been on sharp display in recent floor votes on amendments to spending bills for the new fiscal year beginning Oct. 1. The federal government is on course to spend close to $650 billion over the coming year on the Pentagon and wars overseas, but 108 Republicans voted to do away with the last $1 billion for the Food for Peace program — a bipartisan legacy of former Presidents Dwight Eisenhower and John F. Kennedy. Having already cut 2012 funding by almost a third, 128 Republicans decided that wasn’t a good idea and, together with a solid bloc of Democrats, defeated the amendment. Rep. Jack Kingston (R-Ga.), the bill’s sponsor, pushed back with accounts of how the food program had been vital in the past year to helping flood and earthquake victims in Pakistan and Haiti. But even Republican colleagues who had praised that aid voted against Kingston to kill the program. The lasting impression from this and other such votes is of a party divided, so much so that in the ongoing debt talks, one big question is how long the leadership can afford to take a hard-edged ideological stand against tax increases when its own ranks are split on spending issues. McConnell’s willingness to consider a smaller deficit reduction package suggests he fears a bigger debt deal would make it harder to resist revenue proposals. At the same time, Cantor and Boehner — equally opposed to taxes — feel compelled to push ahead with bolder action, risking that result. In the last spending showdown with Obama in April, Republicans had hoped for 200-plus GOP votes for the budget deal but lost 59 and had to rely on Democrats to pass the bill. The debt challenge now is far greater and, perhaps, the most existential vote for Republicans since the financial bailout in 2008. Then, even with a Republican president, the GOP first helped kill the bill, sending the financial markets into turmoil. And it was only after the Senate rallied behind the package — with McConnell’s leadership — that the bill ultimately passed Congress but still with objections from 108 House Republicans. Mindful of this history, Biden has emphasized that a substantial number of Democratic votes will be needed for the debt ceiling increase — and that is why the conversation keeps coming back to revenues. In the April budget deal, the White House was able to bring along House Democrats by showing it had protected top priorities like education. But the GOP is now demanding deeper cuts while showing no give on tax expenditures. It’s telling to look at how the House budget achieved its own deficit reduction relevant to the baseline for spending and revenues set by the Congressional Budget Office. Discretionary spending reductions account for $2.6 trillion deficit reduction in 10 years, but these rely on $1.04 trillion in “savings” attributed to reduced war funding as the U.S. pulls back in Iraq and Afghanistan. And Cantor himself is wary of counting any such savings as part of the deficit talks. “The first rule with me is we have to be honest with one another. We have to make our case and not try to spin something that can’t stand on its own,” he said Tuesday. “The savings may be there, but they are not a product of these talks.” The second big area of savings in the House Republican budget is entitlement programs, where spending would be reduced by $2.9 trillion from the CBO baseline over 10 years. But there, too, almost half the savings is attributed to cuts related to Obama’s health care reforms — a nonstarter in the deficit talks. And for all the attention paid to Medicare, Republicans have back-loaded their reforms so much that they save only about $30 billion in the first 10 years. The bottom line is that the real bargaining chips add up to about $3 trillion, and even if Biden were to agree to half of these — a big “if” — more deficit reduction would be needed to get to the target from $2 trillion to $2.5 trillion. Adjusting government inflation standards is one shortcut that is sure to get attention, affecting annual benefit and tax calculations. And moderate Republicans are quietly urging Democrats to do more with means testing for Medicare, for example, as a way to shift costs to higher-income individuals without challenging the orthodoxy of tax increases. Monday’s meeting at the Capitol dealt with health-care-related expenditures, but revenue was never far away as an issue. “We’re slogging through some very tough issues. We’re getting in very serious conversations, trying to bear down on some big issues,” said Maryland Democratic Rep. Chris Van Hollen, ranking member on the Budget Committee. “And we’ve also made it very clear that any balanced deficit reduction plan has to include revenue — we got to get rid of the pork barrel and the tax code and special interest spending in the tax code.” “That’s got to be part of any deficit reduction deal.” Meredith Shiner contributed to this report.