After Some Tweaks, GOP May Be Ready to Embrace Boehner Plan

“It’s been a hell of a fight, but I think we’re there.”

-- Senior House GOP aide to Power Play on Speaker John Boehner’s debt legislation

After a long night and little sleep, House Republicans seem to have fashioned a deal to pass an alternate debt-ceiling plan from Speaker John Boehner.

Aides say that the plan, which had already been reworked once to provide additional savings, needed only “minor adjustments” to win over conservative holdouts.

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The new plan will be laid out for members at a morning meeting, but the new version is expected to include more immediate cuts and language. Still unclear is how the new version will address concerns that a debt super committee envisioned in the plan would have too much power to force a tax increase through Congress after six months.

The Boehner plan is a two-step process that first provides a debt-ceiling increase to last for the rest of this year in exchange for a suite of cuts agreed to by a bipartisan group of negotiators led by Vice President Joe Biden.

The Boehner plan then conditions a longer-term increase on the work of a bipartisan super committee tasked with making structural changes to the government’s long-term debt.

Every side in the debate has glommed onto the idea of a short-term increase to allow a long-term solution, but the shape of how that final deal is reached remains very contentious.

The Obama administration wants a dead-man switch built into the plan so that if talks break down, tax increases automatically kick in to cover the cost of more borrowing. The Boehner team has suggested a counter switch that would cause key provisions of the president’s health care law to self-destruct if talks break down.

The dead-man switch idea was an outgrowth of the talks between President Obama and Boehner and is much detested by members on both sides. Conservatives and liberals would much rather see a plan that put in fail-safe ways to stop the self-destruct sequences.

Leadership aides believe the changes to the super committee and some additional savings should be enough to win over the handful of holdouts, who, contrary to establishment press reports, aren’t all Tea Party purists. Many are more mainstream Republicans who disagree not on Boehner’s effort at a compromise plan but his strategy for obtaining one.

Boehner’s best argument, though, is that with four days away this is their last best chance to avoid a longer, automatic extension of the debt limit under Senate Majority Leader Harry Reid’s plan or a three-step plan offered by Senate Minority leader Mitch McConnell.

If the House does pass the Boehner plan, Democrats will be forced to vote in favor of another extension before the 2012 election. If the Boehner plan fails, they likely won’t. That safeguard (and the electoral pain it brings) has lots of appeal on the GOP side.

As Economy Falters, Obama Dems Use Debt Debate to Shift Blame

"I think investors small and large in America should know that despite the fact that we're not there yet, House Republicans' objectives remain the same… We're going to keep working this thing until we find a way to pay the nation's bills and live within our means."

-- Rep. Mike Pence, R-Ind., talking to reporters after a vote to raise the nation’s debt ceiling failed in the House

The U.S. economy grew at just 1.3 percent in April, May and June, disappointing economists’ projections, which were pretty measly at 1.8 percent – already below the required growth rate needed to keep up with a growing population.

This confirms the worst suspicions on the trajectory of the economy. The chances of a double-dip are very real and hopes for an accelerated turnaround were unfounded.

As Washington flails about and the economy curls up into a ball, President Obama’s reelection chances have plummeted like global stock markets.

But Democrats are hoping that the Republican House’s sputtering over Speaker John Boehner’s debt ceiling alternative will give the president’s party a chance to share some of the blame for the sputtering economy.

A statement from Democratic National Committee Chairwoman Debbie Wasserman Schultz described Boehner’s plans as “a bill that would have resulted in only a short-term increase to the debt ceiling, and could have resulted in the loss of the United States’ Triple-A bond rating.”

Schultz, like everyone else in Washington, knows that the government’s bond rating will almost certainly be reduced, at least temporarily, regardless of which of the still-viable plans emerges as the final vehicle for compromise. The inability of a divided government to take action on the out-of-control debt and long-term liabilities will be the cause for the downgrade.

But with great gales of economic worry blowing in the face of President Obama’s reelection bid, Democrats are hoping to shift some of the blame to the GOP.

The president will speak this morning on the debt and the economy. Expect him to suggest that Republicans are to blame by their dithering about on the debt ceiling. Plummeting markets will also help him make his case.

Those markets and the Democratic symphony of blame may have as much to do with getting House GOPers to pass the Boehner plan. Republicans want Obama to own this economy.

Debt Ceiling Just Another Battle in a Long War

"What we're trying to do is save the world from the Republican budget....we're trying to save life on this planet as we know it today."

-- House Minority Leader Nancy Pelosi talking to reporters

What a crushing disappointment this whole debt ceiling drama is turning out to be for the American electorate.

When the White House talks about “Armageddon” and Republicans ruining Christmas and Republicans warn of “economic devastation” from the out of control debt, voters might be forgiven for thinking that the stakes for the current fight over extending the nation’s $14.3 trillion debt limit are monumental in scope.

But there’s no viable plan on offer in Washington that would do anything to change the fact that the federal government spends more than $10 billion a day but only takes in a little more than $6 billion.

Even the plans touted as big, like the Gang of Six entitlement and taxation twofer or the Obama-Boehner compromise version, are actually small. They are considered big in Washington because they address the sacred cows of both political parties, but as credit raters observe, finding a way to decrease the debt by $4 trillion in a decade is “a good start” and a sign of political progress, but nothing more.

Anything in Washington that counts on future fiscal discipline is, at best, a notional idea. Ask the lawmakers who each year vote to keep kicking the can on the Doc Fix and the Alternate Minimum Tax.

For all the nail gnawing and overheated rhetoric this week, even the largest plans being discussed are relative trifles compared not only to the size of the problem, but what other nations are facing. You want austerity? Try Britain, where every agency, from welfare to defense, has been slashed to the bone. You want credit anxiety? Try Greece or Portugal where defaults look inevitable and governments hang on the latest bond ratings.

Lawmakers and many in the media have phrased the current discussion in the most apocalyptic of terms and have suggested that the current debate is of monumental proportions. But this is just part of a two-year trench war between the Obama Democrats and the House Republicans.

The first battle was fought this spring over the unfinished 2011 budget. Republicans won some real cuts (and some phony ones) and both sides managed to avert a government shutdown. This is the second round in which Republicans will gain more ground and likely avert a shutdown. The third round, which will start as soon as this one ends, is over next year’s budget.

As soon as this fight is concluded, everybody can reset their shutdown clocks because the government will run out of operating funds on Sept. 30. The best hope is that the House and Senate can agree to a continuing resolution to fund the government while they fight over yearlong funding, but that is an open question.

If the Republican leadership in the House and the Democratic leadership in the Senate are shattered by the current struggle, who will be left to negotiate?

But it is the awareness of the scope and length of this war that has conservatives in the House mostly still sticking with Boehner. Outside groups may imagine obtaining a total victory in a blitzkrieg attack on Obama’s redoubts, but members on the Hill know the bloody realities.

Lawmakers know what their rhetoric does not reveal: This is not the end of anything, or the beginning, just the next battle in a long trench war that won’t end until Election Day 2012. So get your gas masks on and mind the mustard gas.

Still Hope for a Bigger Deal?

“I would respectfully encourage leaders in the Senate and the House, and the president, to find common ground by committing to a guaranteed vote on a long-term fix – otherwise, as I said months ago, I simply cannot support a short-term deal that is just a little better than the shorter-term deal.”

-- Sen. Joe Manchin, D-W.V., on the Senate floor saying he would vote against the debt plan offered by Senate Majority Leader Harry Reid

The Senate’s bipartisan Gang of Six is threatening to release a final version of its long-term proposal on debt, taxes, welfare and entitlements and lovers of dramatic legislation are again raising their hopes that a grand bargain could be yet reached by Tuesday.

This would call for a plan to quickly get momentum on both sides of the aisle and for there to be broad agreement that there should be a very short-term extension of the debt limit in order to hammer out a grand bargain.

Power Play loves a surprise ending as much as the next political note, but there just isn’t the requisite trust between Republicans and Democrats, House and Senate and president and Congress to pull off such a huge leap of faith.

The Gangsters and others working on something with “bigness” aren’t out of the picture, though. If they can successfully pitch a plan in the next four days, it could become the framework for whatever super committee results from the compromising, can-kicking agreement that emerges before Tuesday’s deadline.

And Now, A Word From Charles

“If the ratings are lowered because of what's going on here, it's not because of the shortness of the extension. It will be because of the size, because the size is what tells you about the seriousness. And the seriousness that has been demonstrated by the Democrats here has been zero.”

-- Charles Krauthammer on “Special Report w/Bret Baier

***Today on “Power Play w/Chris Stirewalt,” Chris and A.B. Stoddard of the Hill talk to Wall Street expert Charles Payne on what a lower credit rating for the U.S. would really mean for you. Plus – what’s going on inside Boehner’s caucus after the failure to bring the bill up for vote Thursday night? Don’t miss a minute at 11:30a ET at live.foxnews.com ***