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August 25, 2019

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The Policy Racket

Harry Reid on sideline as Obama backs Gang of Six’s debt deal


AP Photo/J. Scott Applewhite

Senate Majority Leader Harry Reid speaks to reporters following the Democrats’ weekly policy meeting on Capitol Hill in Washington, Tuesday, July 19, 2011.

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President Barack Obama discusses the continuing budget talks, Tuesday, July 19, 2011, in the the briefing room of the White House in Washington.

Sun Coverage

Sen. Harry Reid, the seasoned negotiator that he is, made a bad bet recently that may be coming back to haunt him.

A few weeks ago, Reid dismissed the efforts of a bipartisan group of lawmakers, known as the Gang of Six, that was working on a deficit-cutting deal that would also let Congress raise the debt limit — a must if the country wants to avoid defaulting on its obligations after Aug. 2.

“My honest feeling is that I think we’re beyond gangs of five and gangs of six,” Reid told reporters at a news conference the same day that Republican leaders Rep. Eric Cantor and Sen. Jon Kyl had backed out of a conference process led by Vice President Joe Biden.

“I think it’s now in the hands of the speaker and the president,” Reid said, “and sadly, probably me.”

But after weeks of faltering efforts by congressional leaders to hash out an agreement, President Barack Obama is openly embracing the Gang of Six’s plan — and sidelining Reid’s.

“I want to congratulate the Gang of Six for coming up with a plan that I think is balanced,” the president told reporters this afternoon, calling the proposal “broadly consistent with the approach that I’ve urged.”

The president also referred to Reid’s parallel efforts to draft legislation along with Republican Senate Leader Mitch McConnell as “a necessary approach to put forward” but “the bare minimum that has to be achieved.”

That left Reid scrambling Tuesday to reframe his verdict on the Gang of Six and reassert his authority in this process.

“I don’t want to do anything to jeopardize the enthusiasm people have for the Gang of Six,” he told reporters. “But I am the person that runs the Senate. And I understand what the rules of the Senate are.”

While congratulating the Gang of Six for “really extraordinary” work, Reid would only promise to look at the plan and possibly “take elements” from it, indicating there wasn’t enough time to consider a new plan.

There are 13 days left until the country starts defaulting on its foreign obligations, the Treasury Department says.

The president isn’t the only person who’s indicated the Gang of Six — which seemed the dark horse to coalesce leaders around a proposal — may come out ahead before Aug. 2.

The Gang of Six got a burst of energy Tuesday when Sen. Tom Coburn of Oklahoma, one of the Senate’s most dogged fiscal conservatives, returned to the group after a two-month hiatus, one day after releasing a fiscal plan for $9 trillion in cuts — which are guidelines, he acknowledged — and declaring it was “time for a new day, the politics needs to stop.”

The gang’s unofficial leader, Sen. Kent Conrad, who is chairman of the Senate Budget Committee, unveiled a plan last week to cut slightly more than $4 trillion by closing certain tax loopholes, ending tax breaks for those earning $1 million a year or more (Obama has advocated a threshold of $250,000), cutting $800 billion in military spending, and making cuts in Medicare and Medicaid but not Social Security. It also would lower the corporate tax rate to 29 percent.

When Conrad unveiled his plan last week, it seemed a long shot, with Conrad defending himself by saying: “I don’t think it’s ever too late until the fat lady sings.”

At this point, it’s not a done deal. Even Conrad admits the plan is more a baseline for a final agreement than the final agreement itself. But the parallel endorsements from Obama, the vanguard of progressives, and Coburn, the ringleader of conservatives, is a step toward calling the bluff of both parties. It also suggests that bipartisan processes may actually have a chance at achieving accord — so long as those expected to exhibit bipartisanship aren’t the leaders who have to deliver their party’s partisan line.

Party leaders Reid and House Speaker John Boehner, in the last round of fiscal planning that almost led to a government shutdown, split time between negotiating behind closed doors and standing in front of cameras, pummeling the opposing side for its recalcitrance to deal on the stump.

They’ve both been following a similar playbook during the debt debates, but it’s not working as well — possibly because they’re not facing off as directly as they were before.

Although negotiations are always messy, one can map out power and influence as a series of concentric circles. During the showdown, Boehner and Reid were at the center. But this time, the center is the president, and opposite him, the leaders in the House: Boehner and Cantor. Obama has been having private meetings and phone calls with them alongside the more formal negotiation process with all congressional leaders.

That undercurrent effectively makes Reid and McConnell second-degree participants in the talks. And those two are working together on a backup plan if all goes belly-up.

While Republicans focus on the “Cut, Cap, and Balance” plan, the support of even a small band of Republicans for the Gang of Six’s plan is an indication that the chance for a “grand bargain” compromise may not be dead.

To reach a grand bargain, each party would have to bend on some of its most rigid demands.

Obama peeled the lid off the Democrats’ insistence that deals on the debt ceiling not touch social entitlement spending — specifically Medicare, Medicaid and Social Security, two of which the Gang of Six’s proposal affects. Coburn has also broken rank with Republicans on that party’s insistence that tax increases, anywhere, not be part of a final deal. Although he, like all the rest of Senate Republicans, voted for Grover Norquist’s no-tax-hike pledge, he supported the Debt Commission’s recommendations in December for increasing revenue, and spearheaded the Senate’s recent effort to end ethanol subsidies — a move some Democrats say could pave the way to end tax breaks for other industries.

Obama and Coburn don’t speak for others in their party who will have to answer for their votes at election time. Although recent polls indicate the country is on board with the idea of a balanced deal to avoid disaster, election-time criticism that an incumbent voted to raise the debt ceiling is an anticipated attack ad ringing in some politicians’ ears — especially Republicans’. And bidding farewell to parts of Social Security or Medicare — without first raising taxes on the wealthy — is equally anathema to many Democrats.

Although hope flies high for a big deal, Reid and McConnell have been taking a harsh look at possible realities: Even as the country risks default come Aug. 2, a far more foreboding date is Nov. 6, 2012, which will make compromise close to impossible in the next two weeks. Their plan’s strategy bucks the traditional wisdom that debt limit increases must be tethered, in at least a 1:1 ratio, to budget cuts.

The plan, which is McConnell’s concept, would allow the president to raise the debt ceiling unilaterally, but he’d have to do it in three stages. Also, it’s structured such that Republicans would never have to take a direct vote to raise the debt ceiling; the president would be given the authority to do it off Congress’ inability to override his veto of orders not to raise it.

It may seem reflexive, but in the end, it buys the Republicans political immunity — and that’s also why it isn’t widely popular across the party. Many Republicans don’t want to be left open to the allegation that they’re willing to play politics with the debt when they’ve been taking pains for months to present themselves as strict fiscal pragmatists.

Which leaves us where we are today: in the midst of a largely symbolic vote to pass a balanced-budget amendment, which will tie outlays to tax intake, and keep congressional spending to 18 percent of gross domestic product, as a condition for raising the debt limit. Although popular in the House, it won’t likely pass the Senate when it takes it up Saturday.

Republicans, such as Boehner, say it “ensures future spending restraints are set in stone.” Democrats, such as Reid, are calling it “a stunt” that “falls flat,” and a mandate that “would even make President Reagan’s spending plans unconstitutional.”

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