Speculation On Ways Out Of The Government Shutdown

There is a lot of speculation as to how Congress will get out of the Republican-created crisis leading to the shutdown of the government, as well as the upcoming need to increase the debt ceiling. There has been some talk of a grand bargain, and more realistic speculation that they will need a smaller deal. I’m not certain to what degree to trust Robert Costa’s inside sources, but his report in The National Review on Republican strategy does sound realistic:

It hasn’t been announced, and you won’t hear about it today, but the final volley of the fiscal impasse, at least for House Republicans, is already being brokered. And according to my top sources — both members and senior aides — it won’t end with a clean CR, or with a sprawling, 2011-style budget agreement. It’ll end with an offer — a relatively modest mid-October offer that concurrently connects a debt-limit extension, government funding, and a small, but strategically designed menu of conservative demands.

At least that was the word late Thursday, when the leadership and groups of Republicans huddled. There is a growing acceptance, especially among the leading players, that the debt-limit talks will soon blend into the shutdown talks and force Republicans to negotiate a delicate peace that can win the support of a majority of the conference (or close to it), as well as a smattering of Democrats. To that end, recent quiet, freewheeling discussions — some hosted by the leadership, others by Paul Ryan — aren’t so much about whipping toward such a deal, but about deciding how to frame it.

So far, it has been an uneasy process, but not futile. Many of the GOP’s more centrist members are asking Boehner and Ryan to not put too much on the table, or else risk turning off Democrats and extending the shutdown. On Wednesday afternoon, during a series of meetings in Boehner’s office, they pressed the speaker to avert a default on the nation’s debt. But Boehner, though with them in spirit on averting default, told his colleagues to hang tight for the moment and swallow hard as the shutdown continues. One Boehner ally tells me the speaker first has to balance his various conservative blocs before he can even privately articulate a final pitch.

But details are floating to the surface as the leadership reaches out to internal power brokers about what’s within the realm of the possible. What I’m hearing: There will be a “mechanism” for revenue-neutral tax reform, ushered by Ryan and Michigan’s Dave Camp, that will encourage deeper congressional talks in the coming year. There will be entitlement-reform proposals, most likely chained CPI and means testing Medicare; there will also be some health-care provisions, such as a repeal of the medical-device tax, which has bipartisan support in both chambers. Boehner, sources say, is expected to go as far as he can with his offer. Anything too small will earn conservative ire; anything too big will turn off Democrats.

It will probably be necessary to give something to the Republicans so they can save face and agree to a deal, unless public pressure becomes so great that they have no choice except to give in. Revenue-neutral tax reform is something which both sides could agree to, and even might be beneficial. That assumes that Republican tax reform doesn’t simply consist of lowering taxes on the wealthy and increasing taxes on the middle class as they have generally favored. Repeal of the medical-device tax, assuming it appears to be part of a bigger bargain and not simply capitulation by Democrats to a Republican demand, is feasible. This is a part of the Affordable Care Act which assists with financing the plan, but which is not a part of the law which supporters would consider to be important. Entitlement reforms would need to be viewed cautiously to avoid giving in unnecessarily on cuts to Social Security or Medicare.

Democrats have the upper hand and might be willing to give Republicans something so they can feasibly give in, but the Democrats have other options. Bargaining might become unnecessary if the Democrats are able to use a discharge petition to bring a clean bill to the House floor which could pass with the support of most Democrats and a small number of moderate Republicans. Greg Sargent explained how this might work in a post today, with more at Roll Call. Republicans might also be forced to give in due to demands from big business, with further evidence of business being unhappy with the Republicans in addition to what I discussed earlier in the week.

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