A Deal With Obama

Read the tea leaves:

1. President Obama says he’s willing to sign a short-term continuing resolution and a limited increase in the debt limit lasting a few months. Of course, he says the bills must be clean, without conditions, but that is a good place to start serious moves.

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2. Obama is breaking his splendid isolation and summoning Congressional groups for meetings. These meetings are largely photo ops to defray charges that Obama is doing nothing to resolve the crisis. But Obama did invite the entire Republican house delegation to come over for a photo op. Boehner wisely said that he wouldn’t bring 235 members. That would have been an audience. Instead he’s coming with 18 members. That’s a negotiation.

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3. Boehner recommends that people read the Wall Street Journal op-ed by Congressman Paul Ryan proposing a short-term extension and demanding, in return, concessions and cuts in entitlement programs.

Ryan asks for measures Obama has endorsed in the past. They include raising premiums on richer Medicare patients, requiring greater efficiencies from Medigap policies and making federal employees pay more for their health insurance.

Most significant is the fact that neither Boehner nor Ryan mention Obamacare changes as prerequisites for a short term CR or debt-limit hike. They are apparently ready to focus on entitlements. Obama could live with that.

Of course, any long-term deal on the debt limit must provide for some changes in Obamacare. There is no question that the subsidies available to members of Congress for their health care must be eliminated, even in a short-term resolution.

But beyond that, a deal to limit spending growth and get into entitlements could do wonders for our economy.

Senate and House Finance Committee Chairs Max Baucus (D-Mont.) and Dave Camp (R-Mich.) have been holding informal talks about lowering corporate and individual tax rates and eliminating or capping deductions and other loopholes. But Democrats demand that this deal include additional government revenue while Republicans are demanding revenue neutrality.

In all likelihood, a cooling off period of a temporary government opening and a debt-limit increase would have the same partisan rancor and absence of serious negotiation that we have now.

And most likely, we will have to close the government and go to the brink again. But the Republicans will have a big advantage:

–They will have shown their reasonableness by reopening the government this time.

–Should another shutdown be necessary, Republicans would have shown that a shutdown is no disaster.

–They will have created a decision date agreed to by both parties. When they hold firm and demand real spending cuts, they will not be seen as usurping power or inappropriately asserting their role. It will not be a question of taking an event, like the end of the fiscal year, to make demands. They will have been authorized to do so.

–They will have put entitlements on the table, just as the last debt-limit fight put discretionary spending on the table. It might be a good idea to set an agreed upon percentage reduction in total entitlements and then leave it to the follow-up to decide where and how to make the cuts. This could become an entitlement equivalent of the sequester cuts. But at least entitlements will finally be on the table.

If the parties agree on some down payment cuts, a curb on Obamacare subsidies for Congress and a joint focus on entitlements when they return to negotiations, it might be a good deal.

Also see,

Obama’s New Vocabulary

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