Grand deficit prize glitters within reach

Grand deficit prize glitters within reach

President Obama and Speaker John BoehnerJohn Andrew BoehnerRift widens between business groups and House GOP Juan Williams: Pelosi shows her power Debt ceiling games endanger US fiscal credibility — again MORE (R-Ohio) face a transformative moment as deficit negotiations build toward their climax.

For both men, a sweeping deal would be a signature achievement that burnishes their reputations and legacies.


The call of history is strong. Obama, having massively reshaped American healthcare in his first term, has the opportunity to make a pact that repairs the nation’s balance sheet, which has been on a perilous path for more than a generation.

BoehnerJohn Andrew BoehnerRift widens between business groups and House GOP Juan Williams: Pelosi shows her power Debt ceiling games endanger US fiscal credibility — again MORE has the chance to strengthen Republican claims to fiscal responsibility and put the lie to critics’ charges that the GOP is the party of “No.”

The two leaders met Sunday at the White House to seek common ground. Aides to the president and the Speaker gave the same statement when asked about the meeting, saying "the lines of communication remain open."

The hurdles that stand in the two leaders’ way are high. But if the obstacles can be overcome, partisans on both sides of the political divide agree the achievement would be a stunning one.

The prospect of a successful grand bargain on federal debt is “earth-shattering,” said Republican consultant Ron Bonjean. “For Washington, to make such an agreement would be simply amazing.”

A deal would be a “defining moment,” especially for the president, said Jim Manley, a former top aide to Senate Majority Leader Harry ReidHarry Mason ReidHarry Reid calls on Democrats to plow forward on immigration Democrats brace for tough election year in Nevada The Memo: Biden's horizon is clouded by doubt MORE (Nev.).

“I think he’s already enjoyed some incredible legislative accomplishments. But something like this — putting our country on a strong fiscal path — would put him right among the top ranks of the presidents.”

For now, the bulk of attention is on the specifics of a deal. But speculation about details can obscure the bigger picture. An agreement hovers within reach. It could be expansive and historic, and would come at a time when Washington is accused of being small-minded and sclerotic.

Obama came to power promising a new era of post-partisanship. In a speech in North Carolina, less than a week before the 2008 election, Obama suggested that he could bring into being “a new politics ... that calls on our better angels instead of encouraging our worst instincts.”

This pledge has gone unfulfilled, as even the president has acknowledged.

Still, a major accord could help Obama restore the original promise of his presidency: that he would be a leader capable of closing the partisan divide and reaching common ground.

A deficit deal also has the potential to win the endorsement of a broader range of the public than Obama’s biggest prior Capitol Hill victory, healthcare reform. 

“The healthcare law was a big deal, as Vice President Biden said at the time,” said Julian Zelizer of Princeton University. “But it was a partisan deal. It was through Democrats that he won.

“This time, you have deficit reduction, which is an issue that really comes from the Republicans. So it would be a different kind of deal, with Obama reaching an agreement on an issue that matters to the Republican Party. That would change the picture of who he is. For Obama’s legacy, it could be important.”

Success in the “fiscal cliff” talks could help Obama with his own party, too. He faced criticism from his left flank throughout his first term, with detractors arguing that he was too accommodating toward Republicans and got little in return.

If a deficit deal is reached, it is all but certain that tax rates will rise for people earning the highest incomes. Democrats have long demanded that such a change be a key element of deficit reduction.

Along with the opportunities that a deal would afford Obama, there are also sizable benefits for Boehner.

Securing tangible changes to entitlement spending is an enticing prospect for Republicans. Any major bending of the cost curves for Medicare, Medicaid or Social Security could provide Republicans with political cover for agreeing to a tax increase and appeal to the more general conservative desire to shrink the size of government.

There is also the broader issue of the Republican brand to consider.

Opponents of the GOP have long painted the party as obstructionist and too beholden to its right wing. The rhetoric has intensified in recent years and has had some impact, as the low approval ratings for Washington Republicans attest.

 A deal could prove powerful in helping dismantle that argument. It would indicate a party willing to compromise for the good of the nation. The near certainty of a tax-rate change would also help blunt accusations that the GOP disproportionately protects the wealthiest members of the population.

“It would finally give the Republicans a way to say that they are not just the party of ‘No’ and the party of the top 2 or 3 percent,” said Tobe Berkovitz, a Boston University professor who specializes in political communication.

For Boehner himself, a deal that was accepted by a clear majority of the House GOP would strengthen his internal position and form a cornerstone of his record as Speaker.

Anything approximating a grand bargain holds out another inducement for Democrats and Republicans alike.

It would be proof that each party’s representatives on Capitol Hill can get beyond posturing and verbal flame-throwing in order to achieve something of consequence. The public in general and the financial markets in particular would likely welcome such evidence.

“I doubt if, all of a sudden, sunshine will predominate over Pennsylvania Avenue and Capitol Hill. But it would be a temporary lull in the battle,” Berkovitz said. “It would at least show the public and the financial markets and the world that there is some hope that this is not a totally dysfunctional political system.”

All of this is premised on the idea that there will be a wide-ranging deal. No such agreement is certain and some people regard it as unlikely. Certainly the public doubts it, as The Hill’s poll this week shows.

The poll, conducted by Pulse Opinion Research, found that 58 percent of voters expressed little or no confidence that a deal would be reached. A mere 14 percent said that they were “very confident” of success.

Prior to Obama and Boehner meeting on Sunday, both sides sounded more pessimistic than optimistic.

At a news conference last Friday, Boehner asserted there had been “no progress” and that the White House had “wasted another week.”

Two days previously, Treasury Secretary Timothy Geithner had said that the administration was “absolutely” willing to go over the fiscal cliff if tax rates did not go up on the highest incomes.

Seasoned observers expect some kind of deal by the end of the month, but many believe that it is likely to be a stop-gap measure rather than a sweeping accord. A deal in which there is some down payment on the deficit, but where the hardest decisions are postponed until next year, could be the solution for now.

Something bigger might happen but the odds are steep, according to Bonjean.

“This is like climbing the Mount Everest of bipartisan agreements — and it’s like climbing it in the worst weather possible,” he said.

The chance at making history might prove a big enough inducement for both sides to strike a compromise More prosaically, the consequences of inaction might be grave enough to persuade both sides to carve out a big deal.

A grand bargain “would be somewhat surprising and it would be notable,” Zelizer said. “But it is not impossible, because Congress put a gun to their own heads. The question is whether they are willing to let it fire.”