Recall that Obama began debt limit negotiations by demanding a clean extension of federal borrowing authority with zero deficit reduction. He had ignored the recommendations of the chairs of his own deficit commission. And he had proposed a 2012 budget that would have added $3 trillion in red ink over the next decade.
Yet, by last week Obama had staked the full authority of his presidency on a plan that reportedly would have reduced the projected deficit by $4 trillion—with perhaps two-thirds coming from spending. He had agreed to significant cuts in Medicare and Medicaid and changes in Social Security. He had seemingly agreed to make permanent nearly all of the 2001 and 2003 tax cuts. And while Obama was insisting on about $1 trillion in new revenues over a decade, most would come from reducing or eliminating tax preferences rather than raising rates.
In all, Obama’s offer was far more ambitious than what his fiscal commission chairs, Erskine Bowles and Alan Simpson, proposed. The president would have reduced the deficit by roughly as much as the House Republicans, whose plan Democrats had ridiculed as absurd just weeks before.
And for a few hours last weekend, Boehner seemed ready to take the deal. But, in the face of stiff criticism from his own caucus, Boehner now sits mute while the hard-core anti-tax faction of the GOP speaks for the party. House Majority Leader Eric Cantor (R-VA), who covets Boehner’s job, insists that not only must no new revenues be included in any fiscal agreement, there is, in fact, nothing to talk about as long as taxes are in the picture. As one GOP freshman congressman told The Washington Post, “Cantor’s just being very clear that we’re not going to get drawn into any negotiation.”