Intra-Partisan Divisions Snarl US Debt Negotiations

Michael Bowman

July 15, 2011

Amid the specter of a possible default on U.S. debt obligations - and dire warnings from economists, investors, and credit ratings agencies - Washington remains mired in a political standoff, blocking a deficit-reduction deal that would pave the way to raising the federal debt ceiling.

Not only are talks between the White House and congressional leaders stymied, but discordant factions have emerged within the two main political parties, further complicating a debt agreement.

As President Barack Obama prepared for another round of negotiations with top lawmakers, Press Secretary Jay Carney downplayed the likelihood of a sudden breakthrough that would avert a possible default on America’s $14.3-trillion national debt.

“The president is ready to make that deal," said Carney. "And he is waiting for partners.”

Republicans sound even more pessimistic. Senate Minority Leader Mitch McConnell continued to object to Democratic insistence that increased tax revenue be part of a budget deal.

“Republicans will not be reduced to being the tax collectors for the Obama economy," said McConnell. "We will not be seduced into calling a bad deal a good deal. If he and the Democratic Senate would rather borrow and spend us into oblivion, they can certainly do that. But do not expect any more cover from Republicans. None.”

McConnell has said that if no bipartisan agreement is forthcoming, Republicans should essentially wash their hands of the debt ceiling issue by granting the president the ability to raise the borrowing limit in installments, without Republican legislative consent. That would put the full burden of what is a politically-unpopular move on Democrats ahead of next year’s national elections.

But Republican Party unity appears to have faltered. House Speaker John Boehner has said he aims for $4 trillion in deficit reduction over 10 years, while his chief deputy, House Majority Leader Eric Cantor, appears focused on a smaller deal consisting of budget cuts already agreed to in negotiations to date. The two men downplayed any disagreements at a news conference Thursday, with Boehner going so far as to embrace Cantor in front of cameras.

Meanwhile, few Republicans are embracing the McConnell proposal, and many appear unwilling to allow the chance of a major budget deal to slip by. Republican Senator Bob Corker of Tennessee is an ardent opponent of tax hikes. But Thursday, he criticized hardened partisan bargaining positions and seemed to yearn for compromise.

“I am very disappointed, candidly, that both sides of the aisle only want it their way," said Corker. "I do not think this great country was created so that one side of the aisle got it exactly the way they wanted it.”

Compromise is anathema to the virulently anti-tax Tea Party wing of the Republican Party. Senator Marco Rubio, a Republican from Florida, said holding a firm line against raising taxes is not a matter of ideological purity, but economic common sense.

“Too often in politics, compromise leads to things that makes things worse, not better. And if you raise taxes in this economy, with 9 percent unemployment, you are going to make things worse.”

Meanwhile, Democratic lawmakers stress that any budget deal that relies on spending cuts alone will harm the middle class and the poor, while shielding the wealthy from sacrifice.

Democratic Senator Richard Durbin of Illinois said, “We need to put everything - underline the world ‘everything’ - on the table: spending, entitlements, and revenue.”

Friction also has emerged within the Democratic Party, with its most-progressive lawmakers objecting to Obama’s willingness to consider substantial changes to so-called entitlement programs that provide income and health care for retirees.

Despite the cacophony of voices and demands, Carney said a deal is still possible before the August 2 deadline for increasing the debt ceiling.

“That agreement is right here, within reach," said Carney. "It is on the table. Just have to reach for it and grasp it, and be willing to compromise to do it. And you know what? That requires thinking about the broad American public and not the narrow bands or the narrow constituencies within your own party.”

The president has met with congressional leaders every day this week, and further meetings in coming days are anticipated.