Is A Solution In Sight?

By Dick Morris on October 10, 2013

Read the tea leaves:

1. 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.

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 opp. 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.

3. Boehner recommends that people read the Wall Street Journal Op Ed by Congressman Paul Ryan proposing a short term extension 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 make no mention of 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 but 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 temporary government opening and 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 again 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.

• And should another shutdown be necessary, Republicans will 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. Nothing inappropriate here.

• 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.

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