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Why debt limit issue may drag on through Election 2012

House Speaker John Boehner calls for trillions in spending cuts as a condition of raising the national debt limit. Is that bar so high that Congress will do short-term fixes – and wait for voters to speak in Election 2012?

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As he did with the fiscal year 2011 budget negotiations earlier this year, Boehner is consulting with caucus members and outside groups and encouraging a wide vetting of views. Last week, House Budget Committee chairman Paul Ryan (R) of Wisconsin and Ways and Means Committee chairman Dave Camp (R) of Michigan said Congress is not likely to succeed in including entitlement reforms, such as scaling back Medicare, in a grand bargain on the debt limit. Boehner says nothing is yet off the table, except tax increases.

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The Democrats' negotiating position has been to protect entitlements such as Social Security and Medicare, while increasing taxes on the wealthiest Americans and certain industries, such as oil – themes for campaign 2012. Mr. Obama and Senate majority leader Harry Reid initially pushed for a clean debt-limit vote, with no add-ons. But they came under fire from the business community for not taking the debt crisis seriously enough. In April, Senator Reid called for a mandatory cap on deficits.

For Republicans, that’s code for tax increases. “We should be talking about cuts of trillions, not just billions,” Boehner said on Monday. “They should be actual cuts and program reforms, not broad deficit or debt targets that punt questions to the future.”

Aides say that does not mean Boehner is repudiating long-term reforms, such as a balanced budget amendment. The amendment could be part of a final deal on the debt limit, but it can’t substitute for a solid agreement on verifiable spending cuts, they say. A balanced budget amendment “won’t take effect for years,” says Boehner spokesman Michael Steel, in an e-mail. “And triggers based on debt or deficit levels will just result in tax hikes down the line.”

But the appeal of procedural solutions to the debt-limit problem – such as a constitutional balanced budget amendment and spending or deficit cap – is surging on both sides of the aisle. With a deeply polarized Congress and divided party control of the House and Senate, plans that solve the debt crisis by mainly raising taxes or mainly cutting spending won’t have the votes to prevail.

“Polls for years have said, 'don’t touch Medicare,' so the [House] vote on Medicare [calling for transforming it into a subsidy program] is likely to be as damaging to Republicans as health care [reform] was to Democrats,” says Stan Collender, a congressional budget analyst, now with Qorvis Communications.

The way out for embattled congressional leaders is to propose actions that would result in the nation's bottom line changing by trillions, without specifying precisely how that will be achieved, he adds. “The best you’re going to be able to hope for now is a change in the budget process," and let a future Congress decide how to change it, he says.

Sens. Bob Corker (R) of Tennessee and Claire McCaskill (D) of Missouri are building bipartisan support for spending caps. On Monday, the liberal activist group released a letter by 75 economists dubbing such a measure “nothing less than a Medicare kill switch,” because it would inevitably demand huge cuts in entitlements.

All 47 Senate Republicans are on record backing a proposal by Sen. Mike Lee (R) of Utah for a constitutional balanced budget amendment. Eleven Senate Democrats have voted to support the idea in principle. But it would require a two-thirds vote in both the House and Senate, plus three-quarters of the states, to become law.


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