House Speaker John Boehner (R-OH) has abandoned talks with President Obama. In a letter to House members Friday, Boehner said “I have decided to end discussions with the White House and begin conversations with the leaders of the Senate in an effort to find a path forward,” to raise the debt limit and avoid default.
So where do we go from here? Tuesday, August 2, is the day the debt limit must be raised if the nation is to avoid defaulting on its debt and/or other payment obligations. Between now and then Congressional leaders of both parties will have to figure out exactly how they’re going to avoid that.
All of them — Boehner, House Minority Leader Nancy Pelosi (D-CA), Senate Majority Leader Harry Reid (D-NV), Senate Minority Leader Mitch McConnell (R-KY) — will discuss those options in depth at the White House 11 a.m. Saturday.
There are a few ways it can go. The one most recently floated comes from Pelosi. It would cut well over $2 trillion from current discretionary spending — factoring in the expected wind-down of the wars in Iraq and Afghanistan — interest payments on the national debt, and certain mandatory programs. No entitlements. In exchange, Congress would raise the debt limit, and expedite a legislative debate on entitlement and tax reform.
Option two — the Reid/McConnell plan, is sitting on a shelf in the Senate. It will include about $1.5 trillion in cuts, and create a 12-member ad hoc congressional committee to address entitlements and tax reforms. This plan would transfer the authority to raise the debt limit to President Obama, and give members of Congress the chance to take a symbolic protest vote against that action.
An earlier version of that plan, proffered by McConnell, included no cuts to spending, no committee, but would have required Obama and Democrats in Congress to go through myriad political machinations, before the debt limit can be raised.
There are numerous other hypothetical options, including a simple, clean debt limit extension — the question is what can pass the House and Senate, and to what extent Republican leaders are willing to twist their members arms, at the risk of their future leadership posts, to get the job done.
