Morning Examiner: Conservative debt limit strategy coming into focus

Politics,Beltway Confidential,Conn Carroll

Last week, in regards to the impending debt limit negotiations we asked, “What do Republicans want?” Since then, House Speaker John Boehner has reiterated his position that every dollar of raising the debt ceiling will require one dollar of spending cut. But as ‘s Phil Klein pointed out last week, that policy simply is not workable. So where do conservatives go from here?

Yuval Levin and James Capretta, both fellows at Ethics and Public Policy Center, have written articles in The Weekly Standard and National Review that outline a more prudent debt limit strategy. Both authors start with the premise that a “grand bargain” with President Obama on entitlement spending is simply impossible (Capretta: “Does anyone believe the GOP can force the president and Senate Democrats to accept these kinds of reforms in a debt-limit showdown two months from now?” – Levin: “Essentially none of the ambitious proposals of the Ryan budget can be adopted as they stand while Obama is in office.”).

Capretta then warns Republicans not to get suckered into a larger entitlement debate during the debt limit fight, “if the GOP makes the debt-limit fight a showdown over fundamental entitlement reform, the president will successfully put on the agenda another round of tax hikes in “grand bargain” fashion. The media will of course play along and echo the argument that… The danger is that the GOP, by escalating the stakes, could find itself in another retreat on taxes, which would be truly disastrous for the party.”

Instead, both authors advocate smaller, topical, tactical reforms, that will set the stage for real reform later. Capretta writes: “The GOP needs to articulate real entitlement reforms, advance them in the legislative process, and stand behind them for the next two years. That should mean, for one, advancing reforms to Medicare that fall short of premium support but nonetheless represent real progress toward advancing consumer incentives in the program. On Medicaid, the GOP could work with the nation’s 30 Republican governors to push for reforms that give the federal government more budgetary predictability and the states far more control over the program.”

Levin echoes: “Their task now is to use the broader vision laid out in the Ryan budget as a standard by which to distinguish good from bad incremental steps, and so to propose discrete, politically plausible reforms that not only reduce spending but lay the groundwork for the sorts of larger reforms they believe are needed in the long run. Many potential spending cuts—including many entitlement cuts, like the provider cuts in Medicare favored by some Democrats—would not meet this test, and should not be pursued. Those that do meet it would need to involve changes in the character of the entitlement system.”

This will be a difficult road for Republicans to follow. It will require a degree of movement discipline that Republicans did not display when Boehner’s Plan B fiscal cliff bill failed to pass the House last year. But if Republican leaders do step up their game, and develop a list of sensible “small ball” reforms that the caucus can support, then conservatives will have laid the groundwork for electoral gains in 2014 (7 Democratic Senators face reelection in states Romney won) and possibly even a chance to enact their full agenda after 2016.


From The Washington Examiner
Examiner Editorial: Obamacare threatens states’ fiscal autonomy
Tim Carney: Tax hikes on the rich to pay for corporate welfare
Byron York: Solis leaves big labor losses behind
Joel Gehrke: White House rules out unilateral debt ceiling hike, not trillion-dollar coin

In Other News
The Wall Street Journal, White House Set to Nominate Jack Lew as Treasury Pick: President Barack Obama plans to nominate Jacob Lew to be the 76th U.S. Treasury secretary, putting the White House’s chief budget expert in a top economic post as it enters a grueling year of fiscal battles with Congress.
The New York Times, Public Goals, Private Interests in Debt Campaign: The leaders of Fix the Debt, a group that has become Washington’s most visible and best-financed advocates for reining in the federal deficit, are also lobbyists, board members or executives for corporations that have worked aggressively to shape the contours of federal spending and taxes, including many of the tax breaks that would be at the heart of any broad overhaul.
The Washington Post, Mortgage Lenders Face New Rules: The government is establishing new rules for mortgages that will make it harder for some borrowers to qualify but that are designed to prevent the kind of risky lending that nearly caused the housing market to collapse during the financial crisis.
The Associated Press, Eric Holder, Kathleen Sebelius, Eric Shinseki Staying On For Second Term: A White House official says Attorney General Eric Holder and the secretaries of Health and Human Services and Veterans Affairs will remain with the Obama administration as it enters a second term.

Righty Playbook
Yuval Levin on how Republicans what Republicans should accomplish over the next four years.
Ramesh Ponnuru on how the fiscal cliff deal starves the beast.
Mark Krikorian on he Migration Policy Institute’s bogus immigration enforcement spending totals.
Robert Costa talks to former-Rep. Jeff Landry about the failed Boehner coup.

Lefty Playbook
Andy Kroll on The Massive New Liberal Plan to Remake American Politics
Ed Kilgore warns Democrats that the 2014 electorate will look nothing like the 2012 electorate.
Scott Lemieux makes the case that the platinum coin is legal.

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