Can House GOP Pull off the Great Debt Caper?

Can House GOP Pull off the Great Debt Caper? Loyalty Will Decide

“[The president’s] getting pretty good at this fear mongering and that’s why the American public and our congressmen and women need to take a step back and be reasonable and rational.”

-- Sarah Palin “On the Record w/Greta Van Susteren”

Republicans have been routing Democrats on the battle over President Obama’s request to increase the nation’s $14.3 trillion credit limit.

Democrats have abandoned their calls for tax increases and have bowed (with the help of creative accounting) the idea of pairing each dollar of increased borrowing power with a dollar of spending cuts.

But Democrats are refusing to yield on one final point: that the cuts must extend past the 2012 election. It may be an unappealing place to draw the line, but it’s a logical one for the party.

Remember that not only does President Obama not want to re-litigate this issue in the heat of a general election, neither do the remaining moderate Democrats in the House and Senate.

Members like Rep. Heath Shuler and other red-state Democrats were willing to support an austere plan to cut spending deeply, cap future outlays and enact a balanced budget amendment favored by conservative Republicans, but they aren’t willing to support Speaker John Boehner’s substitute plan for a six-month extension.

An irony here for the most conservative members of the House is that because they oppose even the stalled “Cut, Cap and Balance” plan for being too lax on spending, they of course oppose the Boehner alternative because it is only a stopgap package of cuts. Like Rahm Emanuel after the Panic of 2008, they don’t want to waste a crisis. Plus, an immediate, 40-percent reduction in government spending sounds pretty darned good to a lot of conservatives.

But the overwhelming bipartisan majority in Congress is determined to avoid any disruptions surrounding the debt ceiling. They fear that world markets could crumble and that while President Obama would be the biggest loser, every incumbent would take the blame for being unable to avert a crisis.

The opposition of Rep. Michele Bachmann and others to every plan means that Democratic votes are more important when it comes down to passing any plan.

And if House Republicans kill the alternative plan on offer from House Speaker John Boehner, the likely vehicle for the final compromise will be Senate legislation offered by Majority Leader Harry Reid. Which platform do you think will be more conservative?

Republican leaders got their members psyched up on Tuesday, including showing them clips from a Ben Affleck movie about the loyalty of Boston bank robbers.

But House Republicans should remember how that movie, “The Town,” ends.

House members saw the head gangster, Affleck, asking for and receiving the unquestioning assistance of one of his associates, played by Jeremy Renner. It’s a macho loyalty moment.

But at the end of the movie, Affleck walks on and leaves that same associate to die alone when Renner’s character makes a greedy and desperate move after the big score goes bad.

Those in Congress demanding a massive deal or secretly hoping for a government shutdown should remember that if they get too greedy, their leaders, like Affleck, will walk on to a deal with Democrats to avoid a catastrophe.

Now, Process is Policy

“This is what can happen when you have an actual plan and submit it for independent review – which the Democrats who run Washington have refused to do.”

-- Statement from House Speaker John Boehner on an unfavorable CBO score of his debt-ceiling legislation

House Speaker John Boehner’s plan for a two-step increase in the federal borrowing limit was in serious trouble even before the Congressional Budget Office passed judgment on the bill.

The most conservative members of the House opposed the plan because it lacks bigness and doesn’t force President Obama to accept fundamental changes to entitlement programs, leaves the door open to future tax increases and doesn’t insist on a balanced budget amendment.

Fiscally conservative Democrats opposed the plan because it would force the same issues back to center stage in just six months. Remember that those same vulnerable Democrats are facing another potential shutdown and more painful votes when the federal fiscal year ends in nine weeks. They will vote for almost anything, no matter how austere, as long as it takes them through November 2012, but they’re not ready to swallow a six-month bump.

Boehner’s policy team is reworking the legislation in an effort to toughen up the cuts. These cuts are based on the negotiations between Vice President Joe Biden and House Majority Leader Eric Cantor, which are the basis of three plans currently circling the Rotunda: Harry Reid’s 18-month extension, Mitch McConnell’s conditional 18-month extension and Boehner’s six-month strategy.

The CBO was going to score the Biden cuts eventually, and there was no chance that the final version would reflect the estimates of the negotiators, since all those involved have an interest in amplifying the size of the reductions, first pegged at $1.5 trillion over 10 years and now looking more like $850 billion.

What Team Boehner is doing now matters not just for the health of the speaker’s bill but to the other two viable vehicles for a final compromise.

These cuts are the common currency of these negotiations, and are so important that White House budget boss Jack Lew even took to the Internet to defend the cuts estimates in the Boehner plan against the CBO, arguing that the office scored the plan starting in March rather than January.

As the seconds tick off the government shutdown clock, no one can afford any late-game disappointments. Whether the Aug. 2 date picked by Treasury Secretary Tim Geithner is accurate, the market disruptions and interest rate hikes attendant to an impasse and shutdown will start kicking in around then. That means lawmakers are desperate to have something either done or on track to pass by the time the sun comes up that day.

So, if Boehner can rescue his bill and squeeze it out of the House on a GOP-only vote, it would head to the Senate where it would immediately be amended to reflect a longer-term extension.

While Reid’s plan and its tendentious cuts based are probably not going to make the grade (Reid might have doubled his $2.2 trillion in cuts estimate from the CBO if he would have included the continued cessation of hostilities in Vietnam and Korea), the bipartisan plan backed by McConnell could fit.

That would mean the Senate would send back to the House an 18-month plan conditioned on dividing the money into three tranches and establishing some kind of super committee on cuts. To sweeten the deal for the House, the plan could include provisions that would decrease the chances of a tax increase coming from the super committee.

That bill, if blessed by the White House and House Minority Whip Steny Hoyer, would breeze through the House with almost all Democrats supporting it and necessitating only 40 or 50 Republicans to sign off.

If the Boehner plan dies, Senate Democrats get to design the vehicle and it will have fewer conservative features and look like less of a win for the GOP.

Crossroads Launches A Daisy Ad Against Obama?

“We are near the breaking point. Maybe we won’t be crushed when our economy snaps, but someone will. It’s time to take away President Obama’s blank check.”

-- Ad from conservative political action group Crossroads GPS that shows a little girl about to be crushed by a mountain of cargo containers representing the national debt and weak economy. The ad debuts today in a $3.5 million swing-state rollout

Power Play observes that the new ad out from American Crossroads includes the jarring image of a wide-eyed freckle-faced girl about to get squashed by debt and economic uncertainty – a girl who looks an awful lot like the girl who was about to vaporized in Lyndon Johnson’s infamous 1964 “Daisy” ad.

The Crossroads ad, part of a $20 million rollout by the well-funded conservative group tagging President Obama on the economy, follows up a scary spot in which a woman, who appears to be a single mother, unable to sleep because she is tortured by her disillusionment with Obama.

But in this one, it’s an innocent little girl who’s about to get squashed and it’s pretty scary. As for whether the young actress is homage to the “Daisy” ad, the group had no comment.

Watch here and judge for yourself. (You can see the 1964 ad here)

And Now, A Word From Charles

“I heard the president, as a lot of Democrats like to do, heaping praise on Reagan and the debt ceiling, quoting Reagan and saying he increased the debt ceiling 18 times in his presidency. If you do the math that means the average length of increase of the debt limit was less than six months

And three minutes later Obama is denouncing the Republicans and the Boehner proposal because it's six months, which is unconscionable, irresponsible and reckless… I'm surprised that nobody in the White House is able, actually, to divide 18 by eight.”

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

***Today on “Power Play w/Chris Stirewalt,” Chris tries to get straight talk on Boehner’s debt ceiling proposal from both sides of the aisle. Reps. David Schweikert and Hansen Clarke lay it all on the line. Plus, the very latest drama from the 2012 campaign trail. Don’t miss a second of the show at 11:30 a ET at live.foxnews.com !***