Is the GOP about to cave on taxes?
Over the next 10 years, the federal government of the United States will spend more than $40 trillion. That ungraspable number is made even more incomprehensible when you realize that at least $7 trillion of that will be borrowed money, added to the already astronomical debt we carry of $15 trillion.
Is there a lawmaker on Capitol Hill - liberal or conservative, Republican or Democrat - who doesn't think it's possible to cut a lousy, measly $4 trillion from that without raising taxes a cent? Of course not. The parties on the Hill are engaged in a game of make believe; they are pretending that every dollar of federal spending actually does something for somebody - even if its only to keep bureaucrats employed or cronies and contributors happy.
Be that as it may, the Democrats are prepared to blow the economy up rather than face the music on entitlements. And the GOP is left with the choice to stand on principle or cave in and agree to tax increases:
At a closed-door meeting Friday morning, GOP leaders turned to their most trusted budget expert, Rep. Paul D. Ryan of Wisconsin, to explain to rank-and-file members what many others have come to understand: A fiscal meltdown could occur if Congress fails to raise the debt ceiling.
House Speaker John A. Boehner of Ohio underscored the point to dispel the notion that failure to allow more borrowing is an option.
"He said if we pass Aug. 2, it would be like 'Star Wars,'" said Rep. Scott DesJarlais, a freshman from Tennessee. "I don't think the people who are railing against raising the debt ceiling fully understand that."
The warnings appeared to have softened the views of at least some House members who, until now, were inclined to dismiss statements by administration officials, business leaders and outside economists that the economic impact would be dire if the federal government were suddenly unable to pay its bills.
Freshman Rep. Steve Womack (R-Ark.) said the presentation about skyrocketing interest rates that could result from downgraded bond ratings was "sobering."
Both Moody's and S & P have issued warnings that US bond ratings would come "under review" if August 2 passes and no deal is reached. It isn't only the debt ceiling either. Moody's is tying serious deficit reduction to their warning, which is why the "grand bargain" is back on the table.
The question isn't are the doomsayers right. You can pick and choose who to believe what exactly will happen if the August 2 deadline passes with no deal reached. The question is can the GOP afford to be wrong? Even if the chances are slim that the worst will come to pass, is it responsible to take that gamble?
That is how the GOP leadership is putting it to the rank and file. It is a powerful argument which probably means by Monday, some kind of deal will be in place. And it will include some sort of tax increase.
Perception will trump reality every time in politics.