House Speaker John Boehner is continuing to push a proposal to temporarily raise the debt ceiling and cut around $1 trillion in spending. But despite support from Majority Leader Eric Cantor (who lobbied his caucus hard) and Rep. Paul Ryan, Boehner is getting no help from conservatives in his caucus, grassroots and advocacy organizations or think tanks. Republican Senators have also panned the proposal.
Boehner’s proposal was supposed to come up for a vote today, but it has since been rescheduled for tomorrow, obviously due to fact that he doesn’t have the votes to move it forward. He has also hit another snag as the Congressional Budget Office released estimates showing that it doesn’t achieve any significant savings:
New cost estimates from the Congressional Budget Office could pose a problem for Speaker John Boehner as he tries to rally conservative support for his two-step plan to raise the federal debt ceiling and avert default next week.
The first installment of $900 billion is contingent on enacting 10 year caps on annual appropriations which the leadership had hoped would save well over $1 trillion. But CBO late Tuesday came back with a report showing the legislation would reduce deficits by $850 billion when measured against the agency’s most current projections for spending.
While they don’t believe Boehner’s plan can pass the Senate, the White House issued a veto threat. President Barack Obama, who still hasn’t put forward his own plan, has expressed support for the debt proposal put forward by Senate Majority Leader Harry Reid. The Senate plan has $2.2 trillion in cuts over 10 years, according to the CBO.
While some still see the framework for a deal given that Boehner and Reid’s plans are similiar, pessimism does certainly seem to be building. Megan McArdle read between the lines on President Obama’s speech from Monday evening and believes that there is no hope of making a deal. And according to a survey of 53 economists, 30 believe that at least one credit agency will downgrade the nation’s credit rating.
It’s likely that we’re going to see our credit rating downgraded in the next year, regardless of what plan is passed. None of the plans address entitlements (the real fiscal threat) in a signficant way, largely thanks to Democrats, and Republicans don’t want to touch defense spending.
Honestly, if a deal isn’t reached tomorrow, I don’t think it’s going to happen.