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July 21, 2011

A 'Grand Bargain' in the making? (Updated)

Topics: Political News and commentaries

Could there actually be a $3.7 trillion deal in the making that involves only such items as the elimination of ethanol subsidies and other tax expenditures of a similar size and scope?

Sound too good to be true, right? Probably is

On the other hand, via Daniel Foster there's this from the National Journal, suggesting that not only is a new deal imminent, but it looks pretty good for Republicans:

The aides, who declined to be named because they weren't authorized to speak publicly, said the proposal's outline is broadly similar to a plan discussed previously by President Obama and House Speaker John Boehner, R-Ohio, and a Gang of Six proposal to cut about $3.7 trillion in a decade, with the major exception that it would not raise significant tax revenue. The gang proposal by contrast would seek $1 trillion of its deficit cuts from new tax revenue.

That result would be a major, and unexpected concession, to congressional Republicans. And as described, the plan would enrage many Democrats in Congress, endangering its prospects in the Senate in particular. The mere fact the deal is under discussion already has Democrats up in arms.

Congressional aides said an agreement on the proposal is not imminent, characterizing discussions on the proposal as at an early stage.

A House leadership aide, meanwhile, told National Journal that Boehner is letting House Republicans know that he will unveil a debt-ceiling plan to them during their closed-door conference on Friday. Details of what he will lay out are not immediately known.

Not sure how much faith we can put in what "aides who have not been authorized to speak publicly" say ... but If true, and the cuts are genuine and meaningful (and not just more of the typical fakery the Dems have pulled in the past), not only would this be very good for Republicans, it would be a big step in putting the country in a totally different direction than the rapid downward slope toward bankruptcy we presently face.

Update: Ace has it that Boehner has tweeted that an NYT story on the deal is false.

In other words, it's too soon to know what's real, what's propaganda coming out of the WH, and what's just the blabbering of "aides who have not been authorized to speak publicly" who don't know diddly squat about what they're talking about. The GOP has been screwed (and/or fooled) by the Dems far too often in the past for those of us in the center-right domain of the country to get too excited until a deal is actually on paper and can be adequately evaluated.

Meanwhile, Egan Jones (the smallest of the big three credit agencies) has already reduced America's credit rating. And I heard on Fox Business last night that it's not a question of "will America's credit rating be reduced" ... but only a matter of 'when' ... due to concerns over the country's high debt load and the difficulty the government faces in significantly reducing spending (which is totally understandable, given the big spender currently occupying the WH).

Update 2: Via Daniel Foster - Boehner to Rush: "There Is Absolutely No Deal":

Bob Costa passes along audio of Speaker Boehner talking to Rush Limbaugh just moments ago. Boehner assures Limbaugh that there is no deal with the White House, "publicly" nor "privately." Boehner says his focus remains on urging the Senate to pass "Cut, Cap, and Balance."

That would contradict just about everything else I've heard on and off the record today, for what it's worth. And indeed, if you listen to what Boehner tells Rush about "keeping the lines of communication open" and having "failsafe" plans in place, it sounds a lot like he's just being careful not to say what everybody knows -- that "Cut, Cap, and Balance" is a dead letter -- before it actually goes down in the Senate.

Related:
There Are No Spending Cuts Without Downsizing Government

Posted by Richard at July 21, 2011 2:03 PM



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