'The other guy won'
Nobody loves the debt ceiling compromise. Does that mean it is a true compromise? Certainly, that is a theme found in left and some establishment right commentary.
The debt ceiling deal reached in the Senate, touted in a Sunday evening presidential address (video here), has the left claiming that the Tea Party has a major victory, Charles Krauthammer urging the Tea Party to declare "victory" and demobilize, Speaker Boehner claiming it is a good deal (see his PowerPoint presentation here), and most Tea Party conservatives wary of the devil lurking in the details. We have been snookered before on spending cuts promised in the years ahead, but at least no immediate tax hikes are in prospect. Randall Hoven tweets:
"What did we give 'em?" "$2,400,000,000,000." "What did we get?" "Promises to be good, in 10 years. Something about triggers. Magic beans."
As for the "other guy":
Chuck Schumer's take-away from debt deal: "We got the $2.4T. We don't have to do anything now. All's cool thru the 2012 elections."
Beyond the immediate time frame, the door is still open for tax increases if the committee charged with the second round determines so. Jennifer Rubin:
In his telling, Obama said that the committee in the second tranche of debt reduction would put everything on the table, including taxes. (But he, after all, must sell the Democrats on a deal they rejected and has since tilted even further to the right.) In reality the deal is virtually everything Republicans could hope for.
What about that "trigger" emchanism for the second round? Yuval Levin writes:
The basic mechanism for spending cuts in the first stage of the process will be statutory caps on discretionary spending. Those caps would set an overall limit on discretionary spending in each of the next ten years (a limit that would reduce that spending against the baseline by about a trillion dollars in total). Each year, the budget committee in each house would decide how to allocate that year's amount (or a lower one, should its members decide, but not a higher one) among the different appropriating committees, and then the appropriators would decide exactly where the cuts would happen and what the spending levels for individual programs would be - keeping to the overall level of spending assigned to them. If they failed to do so, then the entire discretionary budget would be subject to an automatic across-the-board cut (a "sequester" by the Office of Management and Budget) in the amount required to get spending down below the cap, divided equally among all the line items in the budget subject to the cap and applied equally to all of them.
The "trigger" would basically work the same way. If the special committee created to find another $1.2 trillion in cuts for the second tranche of the debt-limit increase fails to reach agreement, or if its proposal fails to pass both houses, and if the Congress has not sent a balanced-budget amendment to the states, then another set of caps would take effect, basically just further lowering the caps created in the first stage sufficiently to save another $1.2 trillion over ten years.
This second stage of caps would also include some non-discretionary spending. My understanding is that its design would follow the design of the Gramm-Rudman caps and the PAYGO caps created in the 1980s and 90s, respectively, and amended a few times since.
Confused yet? Me too. Let's see... who benefits from confusion in overly complex deals? If you think it is the Tea Party, guess again.
Harry Reid and John Boehner now have the task of rounding up enough votes to pass the deal. Expect more breathless cable news coverage today.
It cannot be denied that the narrative in Washingtion has switched topics to cutting the deficit, with emphasis on spending reductions (the debate seems to be between immediate and real, versus deferred and imaginary spending cuts). That is worth something, as the pivotal 2012 election approaches.