The debt-ceiling talks are headed for a train wreck. The "grand bargain" that would have raised the borrowing limit by more than $4 trillion blew up over the weekend when Republicans refused to accept new tax hikes.
President Obama and House Speaker John A. Boehner each drew their own lines in the sand on Monday, leaving little reason to hope for a resolution that conservatives could support.
Mr. Obama is obsessed with increasing taxes on those with a combined income over $250,000. He said the "best place to get those revenues are from folks like me, who have been extraordinarily fortunate, and that millionaires and billionaires can afford to pay a little bit more."
There is no rate in the tax code for "millionaires and billionaires," so many small-business owners would find themselves classified among the wealthy, even when they may be struggling to get by. Mr. Obama clearly thinks he needs to amp up his class-warfare rhetoric or lose his liberal base in 2012.
"I will not accept a deal in which I am asked to do nothing," Mr. Obama vowed. "In fact, I'm able to keep hundreds of thousands of dollars in additional income that I don't need."
Asked by The Washington Times how he can get over the president's demand for upper-income tax hikes, House Majority Leader Eric Cantor joked that "he can write a check whenever he wants, so that's easily met."
Mr. Boehner explained how it will be hard to bridge the differences between the parties. "The American people will not accept, and the House cannot pass, a bill that raises taxes on job creators," he explained. The speaker was emphatic that, "There was never any agreement to allow tax rates to go up in any discussion I've ever had with the White House, not once."
Mr. Obama and Mr. Boehner seem to agree on three things: $2 trillion in unspecified spending cuts will happen over 10 years; the deal needs Democratic support in the House for passage; and a vote must take place before Aug. 2 to prevent a market panic.
Based on past experience, the likely outcome will be a last-minute deal that punts on serious fiscal-restraint issues and buries the most important details in a ginormous bill nobody will have time to read or analyze. That's going to be a hard sell with the American public.
The memory of illusory "cuts" linger from the budget deal cut earlier this year. "They need real and substantial spending cuts next year and major budget reforms that the next Congress is not going to be able to come back and reverse," said an aide to a conservative House member.
Ten-year spending cuts are meaningless since they can't be enforced short of a Balanced Budget Amendment. Increased borrowing authority, on the other hand, would inevitably be maxed out.
Realizing the borrow-and-spend crowd would have the upper hand, conservatives pushed the "cut, cap, balance" approach from the beginning. Mr. Boehner and Mr. Cantor have preferred the road of compromise - a route that looks increasingly less promising.
This country is on a path of discretionary and entitlement overspending that is wholly unsustainable. GOP leaders must stand firm against any deal that fails to confront this reality head-on.
Emily Miller is a senior editor for the Opinion pages at The Washington Times.
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