July 21, 2011

SINCE EVERYONE AGREES:

How House Republicans Can Seal a Budget Deal: They could pass a smaller debt ceiling paired with Biden's spending cuts. (Karl Rove, 7/20/11, WSJ)

Having gone on offense with "Cut, Cap and Balance," House Republicans must keep moving forward by now proposing a plan B. Led by Vice President Joe Biden, bipartisan discussions over the last few months have produced what White House Press Secretary Jay Carney declared on July 14 are a trillion and a half dollars in cuts that "everybody can agree on." Fine: The House GOP should bundle the majority of those cuts with a debt-ceiling increase smaller than the total of the cuts, making certain the cuts are real and happen sooner rather than later and include easy and popular cuts as well as hard and controversial ones.

The House GOP should then pass the package, likely with Democratic votes. Even if Mr. Reid won't like it, the Senate will have to take it up and pass it. It's inconceivable that Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke would allow Mr. Obama to make good on his threat to veto any deficit reduction that doesn't raise taxes. And yesterday afternoon the White House said Mr. Obama might be willing to sign on to a short-term debt-ceiling increase, though probably not with big spending cuts.

But a robust package of cuts paired with a smaller debt-ceiling increase would buy Republicans months to fight for additional spending cuts and possibly fashion a revenue-neutral tax reform that cleans out and simplifies the code while lowering rates. Next spring, the House GOP can run the spending cut/debt-ceiling play a second time if needed.


Posted by at July 21, 2011 6:37 AM
  

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