David Hawkings in his CQ Roll Call Daily Briefing today says the outline of a deal to increase the debt ceiling is shaping up. He writes:
Obama will agree to spending restraint during the next 10 years (domestic and defense discretionary and second-tier entitlements) of a bit more than $2 trillion. And in turn the GOP will agree to raise the federal borrowing limit by a touch less than that amount — an amount that would nonetheless be high enough to keep the government in cash through the end of next year.
Any discussion of Medicare and taxes will be put off until after the next election.
Hawkings says both sides are feeling increased pressure to reach some agreement on the debt ceiling. The 87 freshman Republicans in the House who have been resisting a deal on the debt ceiling are slowly beginning to come around to the reality of the consequences of not borrowing more money—recession, global panic, a quick end for many of their careers, and the end of the GOP House majority in 2012. Additionally, Hawkings says the leadership of both parties now see the need for reaching some kind of quick dealt “to avoid a welling-up of anxiety on Wall Street, which almost certainly would happen if another crop of ‘countdown clocks’ start popping up on cable news networks, showing the number of days left before a default.” Boehner seems to have come to the conclusion that Republicans will retain control of the House so he will still be Speaker even if Obama wins reelection. Also, he now believes that Republicans have a chance to win control over the Senate next year which would give the GOP greater leverage on reforming Medicare and cutting taxes. As for Obama, the President wants to get the debt ceiling issue behind him so he can move on to something pro-active during the remainder of his first term.