Four Paths to a Debt Hike

Obama, Boehner Offer a Fourth Option

“A lot of the spending cuts that we're making should be around areas like defense spending as opposed to food stamps.”

-- President Obama in an interview with National Public Radio

President Obama will head to a college campus in one of the most liberal states in the nation today to make his case for a debt deal with a campaign-style event at the University of Maryland.

He’s also done an interview with one of the top news outlets for liberals, National Public Radio, that will air today as part of his bid to get a deal done. He spent nearly two hours on Thursday evening trying to placate congressional Democratic leaders.

Today is the first deadline set by the administration on the president’s demand that the government’s $14.3 trillion debt limit be increased to accommodate new borrowing for old appropriations. While the president and Treasury Secretary Tim Geithner both hold that the “Armageddon” won’t take place until Aug. 2, today marks the date on which the administration says a deal in principle must be reached in order for Congress to complete its work before the lakes of fire, skies of cinders, etc.

So why is Obama out trying to placate his own political base today?

Obama and House Speaker John Boehner have been cooking up a big deal on entitlements and taxes for some time and now they are both trying to sell it to their political allies.

While Obama was talking about the need to protect the vulnerable with NPR, Boehner was on with Rush Limbaugh talking about the need for deep cuts and holding the line on tax rates.

Obama and Boehner’s base petting caused a lot of pants wetting among doctrinaire liberals and conservatives as they began to fret either that Obama was preparing to turn Social Security upside down or that Boehner was preparing to accept huge tax increases.

The truth, though, is that neither Obama nor Boehner have the juice to push anything too radical through Congress.

The details of what have been discussed – a $3 trillion plan conditioned on future alterations to entitlements and the tax code with deadlines on implementation enforced by doomsday devices on current tax rates and the president’s national health law – is the Washington obsession du jour. But it is only one of four competing possibilities.

A look at the other three:

1) The Revenge of the Gang of Six

While it’s unlikely that the framework outlined by the bipartisan group could be whipped up into a bill that could pass the House and Senate before Aug. 2, adherents to the plan are looking for a short increase that would allow work to continue.

But not only is the plan losing steam as conservatives and liberals debate the details, it could be a credit catastrophe if there was a short-term patch and then negotiations broke down and the government was back in this same jam.

2) Small Ball

Many Republicans have grown frustrated with all of the J. Wellington Wimpy deals out there (“I would gladly give you a Social Security reform Tuesday for a debt hike today”).

But they also know that as the Aug. 2 deadline approaches, Obama and the Democrats can ratchet up the pressure by threatening to cut off Social Security benefits, etc. Plus, having heard the dire warnings of credit agencies, even some pretty starchy conservatives have had second thoughts about the merits of using the debt ceiling to force a partial shutdown.

The plan to avoid this pain on the right is to offer the president and Senate Democrats a straight increase of $1.5 trillion, enough for about a year of borrowing, based on cuts already outlined in the negotiations between House Majority leader Eric Cantor and Vice President Joe Biden.

Obama, who’s getting poor marks from voters for his stewardship, wants a big win on fiscal issues and to avoid re-litigating this issue before the election. Debt hawks fear that this may be their last, best chance to get bipartisan support for necessary entitlement reforms.

The Small Ballers, though, want to keep it simple.

3) Modified McConnell

Senate Minority Leader Mitch McConnell has an offer for the president – if all else fails, Obama can trade a resolution to the debt impasse for incremental political pain spread out over the coming election year. The plan, also backed as an emergency measure by Obama and Majority Leader Harry Reid, would make Obama’s full $2.4 trillion borrowing increase available in three tranches to be doled out over the course of the next year.

The plan also calls for the creation of debt committee to recommend legislation on long-term solutions as the benchmarks for disbursement come along. Under a Modified McConnell, the Gang of Six’s framework or even whatever hash the president and Boehner have been cooking up could become the basis for the committee.

The plan would also embrace the $1.5 trillion in cuts backed by the Small Ball supporters by allowing the House to pick its own rates.

It’s a cautious approach that will look better and better as the deadline nears.

Republican Govs Primed for Perry

“The more [voters] see, the more they like.”

-- A Republican consultant advising the proto-campaign of Texas Gov. Rick Perry to Power Play on the still undeclared Perry’s second-place finish in the latest FOX News poll

Texas Gov. Rick Perry is in Aspen, Colo. with his fellow Republican governors today for the stated purpose of a policy retreat, but a source close to another prominent governor in the group tells Power Play that the event has taken on some elements of a campaign rally.

“Perry is exactly the kind of candidate his fellow executives have been waiting for. He’s a no-nonsense conservative, the longest-serving governor in the nation and someone who understands the need to restore power to the states,” the aide said. “Given that and his proven fundraising ability, he’s not going to hear much that’s negative from his fellow governors.”

Perry landed within the margin of error with frontrunner Mitt Romney in the new FOX News poll out Thursday and in the latest CNN survey.

Holder Looks at Case Against News Corp.

"I can make no comment since it's an ongoing investigation."

-- An FBI spokesman to FOX News about reports that the Justice Department is preparing subpoenas to investigate media speculation on whether London tabloid News of the World hacked 9/11 victims’ voicemails

A London newspaper’s speculative report on whether another London newspaper hacked into the voicemails of the victims of the 9/11 attacks has reportedly set off a Justice Department probe of Rupert Murdoch’s News Corp. media empire.

The Wall Street Journal, which, like FOX News, is part of News Corp., reports that subpoenas are being prepared by the agency to investigate whether any American voicemail hacking occurred and if payments to British police officers by the former News Corp. tabloid News of the World constitute violations of the Carter-era Foreign Corrupt Practices Act by the New York-based corporation.

There has been no evidence put forward that the News of World’s shoddy practices were applied to the 9/11 stories and no evidence that any other News Corp. outlet mimicked the conduct that led to the closure of the newspaper.

Attorney General Eric Holder said through a spokesman earlier this week that he “welcomed” the chance to discuss the allegations with concerned 9/11 families.

News Corp. sources dismissed the probe as a “fishing expedition” to the Journal, but even fishing expeditions can cause serious discomfort when conducted at the federal cabinet level.

Given the Obama administration’s previous campaign against FOX News, Holder is entering a politically fraught area with his investigation. Whatever he does will be seen through the prism of the administration’s efforts to marginalize one of News Corp.’s prime properties.

And Now, A Word From Charles

“I think what happened is congressional Democrats got a whiff of possible deal where you get entitlement cuts and tax reform, say, next year, which might increase revenue or might not, and they panicked because they have a religious belief in raising the taxes. If you don't have that, you can't have a deal, so it created a kind of a theological panic.”

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

***Friday on Power Play Live w/Chris Stirewalt: Rep. Shelley Moore Capito of West Virginia told Chris there’s a lack of unity within the House GOP when it comes to the debt. Watch the clip now.

Monday Ohio Senator and budget wonk Rob Portman will talk with Chris and former John Boehner adviser Kevin Madden. Read Chris' column first and participate in the chat at live.foxnews.com. Don't miss it!***