Senate Majority Leader Harry Reid's offer for raising the debt limit is straightforward, if somewhat painful for liberals. In exchange for raising the debt limit by $2.7 trillion, Reid promises to cut spending by $2.7 trillion over the next year, a substantial portion of which comes from defense cuts and ending the wars in Iraq and Afghanistan. What’s more, in an attempt to satisfy Republicans, Reid’s plan makes no attempt to raise revenues, either through tax hikes or cuts to tax expenditures.
On its face, this plan should appeal to Republicans, but if early signs are any indication, Reid's proposal will join a dozen other plans in the dustbin of failed debt-ceiling offers. The reason is straightforward: Republicans aren't interested in reducing the debt or cutting taxes on rich people as much as they are obsessed with denying a political victory to President Obama. For example, here's what House Speaker John Boehner said to Republican lawmakers after meeting with the White House yesterday:
“Here's the challenge,” he told his rank-and-file on a Sunday afternoon conference call, “To stop [Obama], we need a vehicle that can pass in both houses.”
Republicans will reject Harry Reid's plan because it does nothing to “stop” the president. On the contrary, it does the most to protect liberals as they move into next year. Not only does Reid hold the line on the Medicare cuts – thus preserving a a campaign issue for the 2012 elections – but he leaves future tax increases on the table, through expiration of the Bush tax cuts.
Between the two of them, President Obama and Harry Reid have offered trillions in cuts to social spending and entitlements, but Republicans won't budge unless they can also destroy the president's political advantage. At this point, unless Obama decides to cross that line, it's hard to see the endgame.
