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White House Debt Talks Another Chance For A Big Deal

Filed by KOSU News in US News.
July 10, 2011

After weeks of fruitless talks, House Speaker John Boehner appears to have thrown in the towel in the contentious fight over the federal deficit and the nation’s debt limit. House Republicans abandoned efforts for a massive deficit reduction package of $4 trillion over 10 years — a potential deal that had unnerved partisans from both political parties.

In a statement issued Saturday night, Boehner announced he was now looking for a deal about half that size, saying chances for the bigger agreement succumbed to White House insistence on substantial new tax revenue. White House officials said Obama would press for the bigger bargain one last time at a White House negotiating session Sunday evening.

Boehner will be among congressional leaders who will meet with President Obama as the negotiations resume. NPR’s Mara Liasson tells Weekend Edition Sunday guest host Linda Wertheimer that it was members of his own party that changed Boehner’s mind.

“He couldn’t sell this deal,” Liasson says. “This was a big, bold, ambitious deficit-reduction package that he and the president decided to push. It would involve everybody giving something. The Republicans would have to agree to raise some tax revenue — though not necessarily raise tax rates on people — but raise revenue. The president was going to agree to significant entitlement cuts.” But Boehner simply couldn’t convince his fellow Republicans to make the deal.

Liasson says negotiations were tripped up over the “nitty-gritty” of the deal, including what to do with Bush tax cuts. A Republican official familiar with the discussions said taxes and the major health and retirement entitlement programs continued to be sticking points.

“They couldn’t figure that out,” Liasson says, “so Boehner essentially threw in the towel and now they’re back to the drawing board.”

Boehner and Obama had floated the idea of working on a large-scale deal after facing difficulties reaching a smaller, $2.5 trillion deal.

“Sometimes if a problem is hard to solve, you make it bigger,” Liasson says. “So [Boehner] came up with this idea with the president: Let’s make it bigger. Do more deficit reduction and give both sides some of the big things they want, real reforms in entitlements and tax reform and more revenue. But that proved to be a bridge too far.”

Instead, Boehner informed Obama on Saturday that the smaller package identified — but not agreed to — by bipartisan negotiators was more realistic.

The full political fallout is still hard to determine, Liasson says.

“In the short term, I think it’s a loss for John Boehner. He couldn’t get his own conference to go with him,” Liasson says.

Majority Leader Eric Cantor had told Boehner from the beginning there wouldn’t be enough GOP support. Liasson says Republicans can still tell their base they kept their hard line on tax increases. The White House and Democrats, she says, can say they were willing to compromise.

“I would say, however, in all of this political fallout, the American people are the biggest losers,” Liasson says. “What an opportunity. This would have been a way to do real long-term, serious deficit reduction and now both sides have kicked the can down the road again.” [Copyright 2011 National Public Radio]

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