Possible 'Grand Bargain' on budget, debt, in the works

Speaker of the House John Boehner is floating the idea of a return of "The Grand Bargain" where tax reform, entitlement reform, and budget cuts become the essence of a deal to fund the government and raise the debt limit.

If this were August and not the 3rd of October, with the government already shut down and being two weeks away from possible debt default, there might be a chance for some kind of broader deal.

But there is no way such a sweeping agreement can be reached in the time left to Congress. Too many committee heads would want to put in their two cents, too many deals on intractable issues like chained CPI would have to be hammered out, not to mention that very little would be done to stop or delay Obamacare.

Robert Costa at NRO:

"It's the return of the grand bargain," says one House Republican, who requested anonymity to speak freely. "There weren't a lot of specifics discussed, and the meetings were mostly about just checking in. But he's looking hard at the debt limit as a place where we can do something big."

Beyond Boehner's office, the leadership is sending out a similar message through its emissaries. The House GOP's most influential fiscal strategists, Dave Camp and Paul Ryan, are privately reassuring nervous Republicans that the federal shutdown may be painful in the short term, but a budget deal is in the works - and they should be enthused about what they're cooking up.

"Ryan is selling this to everybody; he's getting back to his sweet spot," says a second House Republican who's close with Ryan. "He and Camp are going to be Boehner's guys. That's why Boehner put them on the CR conference committee; he knows these guys are going to be his point men."

And during Wednesday huddles, Ryan, Camp, and other House Republicans spoke openly about what kind of concessions they could potentially win from Democrats. Late Wednesday, "the CR-debt limit idea was what people were talking about on the floor," says a GOP aide.

Per sources, entitlement reforms, such as chained CPI, an elimination of the medical-device tax, and delays to parts of Obamacare are all on the table as trades for delaying aspects of sequestration and extending the debt limit. Camp, especially, is pushing to have a tax-reform framework included.

From what I hear, this combined deal is being softly sold to members; Wednesday's talks were about getting them engaged. And it's all about what Republicans could win - and little about what they'll give in return.

What's not being discussed: increased tax rates or revenues. That doesn't mean, however, that revenue as part of a tax-reform pact has been ruled out.

As in the past, there is no way Reid/Obama will go for any deal on taxes unless there's a "soak the rich" tax increase to go along with it.  And changing the CPI is a non-starter as well, given the left wing's passion about not fooling with entitlements. It's not a fight Obama wants to have with his base - not when it appears to them that the Democrats are in an ascendant position politically. That may be a misreading of the situation, but the reality is, Obama's strongest supporters want him to refuse to negotiate with Republican "hostage takers." So far, that's been the administration's mantra.

Boehner may be talking up a "Grand Bargain" to give heart to the more moderate members of his caucus who are becoming very skittish about not only the government shut down, but the prospect of blowing through the debt ceiling as well. Talking about negotiating - even if it's pie in th sky - keeps the GOP united.

How long that can continue remains to be seen.

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