Even if a “Grand Bargain” on the debt limit is reached before August 2nd, the next government shutdown fight is only a matter of weeks away. While the House has passed a fiscal year 2012 budget, and has even begun marking up and passing some appropriations bills, the Senate has not passed a budget for more than 800 days. But come September 30th, Congress must pass a new budget for the next year or the government will shutdown, as it almost did this spring.
The reality is that House Republicans already approved the current levels of federal spending when they voted for the fiscal year 2011 continuing resolution in March. Since they chose not to raise taxes in that CR, it is only fair that they raise the debt limit a requisite amount to cover the federal spending that they approved. Rep. Darrell Issa, R-Calif., is on board with this logic: “Through the end of September, Congress basically has an obligation to increase the debt ceiling to that level. … The principled thing to do is pass the debt limit to that level.”
But why not apply this logic forward as well? Grand Bargains that pretend current Congresses can bind future Congresses to tax and spending policies years down the road are an unhealthy fantasy. Congress should stick to making the tough choices in front of them.
Around the Bigs
The Washington Examiner, Lawmakers say short term debt deal likely: Lawmakers from both parties are now saying that a deal to raise the debt limit in a smaller amount is now much more likely, but their reasons differ. Obama wants to see a small debt hike that will give Congress room to negotiate a long-term deficit reduction deal. Rep. Darrell Issa, R-Calif., wants to only see debt limit hikes that get the federal government through each budget year: “Through the end of September, Congress basically has an obligation to increase the debt ceiling to that level. That’s why Aug. 2 doesn’t make any sense. Oct. 1 does. The principled thing to do is pass the debt limit to that level. That’s the only thing that’s on our constitutional table.”
The Hill, Reid says he’s waiting on Boehner to tell him ‘path forward’ on raising debt ceiling: Majority Leader Harry Reid, D-Nev., said he is waiting for Speaker John Boehner, R-Ohio, to tell him what can pass the House before Reid pursues “a path forward” in the Senate. Boehner’s spokesman shot back: “We are aware of the deadline, which is why we hope Sen. Reid will move quickly to schedule a vote on the ‘Cut, Cap and Balance plan’ passed by the House with bipartisan support.”
Reuters, Fed planning for potential default: The Federal Reserve is now coordinating with the Treasury Department on how the federal government would prioritize payments should August 2nd arrive without a debt limit hike.
Business Insider, Former Senator Judd Gregg Says Shutdown Needed Before House Will Agree To Debt Limit Deal: On a conference call with Goldman Sachs yesterday, former Senator Judd Gregg said there is a better than 50 percent chance that Congress will not reach an agreement before August 2nd. Gregg dismissed both the Gang of Six and McConnell-Reid debt hike plans: “The McConnell-Reid is too political; people say it’s a fallback, I think that’s wishful thinking. … a small increase in the debt ceiling in exchange for a small decrease in spending (temporary) is most likely deal to happen.”
The Wall Street Journal, Companies Step Up Layoffs: Companies are laying off employees at a level not seen in nearly a year, The Journal reports. “Layoffs have played a big role [in weak job growth] over the last few months,” Mike Montgomery, an economist at IHS Global Insight, told The Journal.
The Washington Examiner, Obama’s sleight of hand on lobbyist contributions: Obama may claim none of his campaign’s money comes from lobbyists, but Tim Carney shows that Democratic lobbyists have gotten around the ban by simply de-registering as lobbyists.
The Wall Street Journal, Business Blasts Ozone Limits: More than half a dozen trade associations—including the Business Roundtable, the U.S. Chamber of Commerce, the National Association of Manufacturers and the American Petroleum Institute—are pressuring Obama’s Environmental Protection Agency to stop new zone regulations that would raise costs and kill jobs.
GOP Field: According to the new Washington Post/ABC News poll, former Massachusetts Gov. Mitt Romney leads with 30 percent, Rep., Michele Bachmann, R-Minn., is second with 16 percent, and Rep. Ron Paul, R-Texas, is third with 11 percent. Former Minnesota Gov. Tim Pawlenty is tied for seventh at 2 percent.
Bachmann: ABC News seems to be the only major news outlet running with the Bachmann migraine story. ABC granted anonymity to an “insider who once worked” with Bachmann so he could accuse the Congresswoman of having “persistent and vexing” migraines for years. Bachmann responded to the story with a statement: “I’ve maintained a full schedule between my duties as a congresswoman and a presidential candidate traveling across this nation.I have prescribed medication I take on occasion whenever symptoms arise and they keep my migraines under control. But I’d like to make it abundantly clear, my ability to function effectively will not affect my ability to serve as Commander in Chief.” Bachmann also released a note from the attending physician of Congress confirming Bachmann’s migraines are infrequent and manageable. Nothing makes conservatives rally around a candidate more than hack-job agenda journalism. This story is a unmitigated disaster Bachmann opponents not named Romney.
Pawlenty: Pawlenty very unwisely chose to wade in on the Bachmann-migraine story telling reporters in Iowa: “”All of the candidates I think are going to have to be able to demonstrate they can do all of the job all of the time. There’s no real time off in that job.” The only way Pawlenty could make this story worse for himself is if he now backs down to Bachmann at the August Iowa debate the same way he backed down in front of Romney in New Hampshire.
Obama: Public Policy Polling (a Democratic firm) says Obama in perilous shape after looking at their latest data. While their polling shows Obama tied with Romney at 45 percent, if the remaining undecideds break for Romney in proportion to Obama’s disapproval rating among undecideds (61/39 disapprove) then Romney would win 52-48.
At The Corner, James Capretta details why the the Gang of Six “disaster” is “the worst” plan so far: “In short, the Gang of Six has essentially offered a plan in which Republicans would hand over control of the budget process to Democratic senators and hope for the best. Enough said.”
RedState‘s Michael Hammond identifies 30 problems with the Gang of Six plan.
Rep. Joe Walsh, R.-Ill., tells National Review he has 90 signatures on a letter to Speaker John Boehner, R-Ohio, asking him to publicly denounce the McConnell plan (or some version thereof) and ensure that it never comes up for a vote.
The Heritage Foundation‘s James Sherk has a new study contending the Obama recovery tanked immediately after Obamacare became law.
Talking Points Memo‘s Brian Beutler explains what would have to happen for Obama to sign a short-term debt hike: “This is only true if a [Grand Bargain]‘s been cut, the votes are there, but the legislative process (bill writing, budget scoring, voting) would drag us past August 2.”
Lefty bloggers like The Washington Monthly’s Steve Benen are now calling House Republicans who oppose the McConnell-Reid plan the House GOP Suicide Squad.