Debt Ceiling Talks Get Real

With talks set to resume Sunday, Boehner and Obama know this is crunch time

Debt ceiling negotiations wide - AP Photo:Pablo Martinez Monsivais - banner.jpg

This was never going to be deal day.

But it was the day that tantrums ended.

And that's not nothing. In fact, it's the essential first step. It's a sign brinkmanship that once threatened to jeopardize the U.S. economy, inflame global bond markets, and stir up a kind of anti-Washington revulsion that would make last year's tea party protests look like Unitarian ice cream socials has come to an end.

From Speaker John Boehner's clipped and taciturn answers at his press conference this morning -- embroidered, as always, with the GOP talking points about spending cuts, job growth, and no new taxes -- one could hear and see that things once again have become both interesting and serious. Boehner's intensity and focus as a negotiator is, generally, directly INVERSELY proportional to the length of his answers to questions about the endgame. The shorter the answers, the more important things are and are likely to get. And Boehner no longer, as he startlingly did last week, suggested that the August 2 deadline for a Treasury default wasn't real.

(RELATED: Hill Democrats Irked Over Obama's Social Security Overture)

Similarly, when President Obama abandons the forced and ill-fitting uniform of uber partisan -- the one he was wearing last week -- and talks with purpose and directness about good intentions, commitment, shared goals, and mutual understanding of the stakes involved, he's working toward a deal as well.

Incidentally, when Obama and Boehner preemptively strike a Sunday that could be used for golf off the calendar, it's another sign that silliness is giving way to substance.

(RELATED: Obama: Both Sides will Work All Weeken to Reach Deal)

At his White House remarks on Thursday, Obama abandoned all pretense of comparing his GOP rivals in Congress to children less adept and disciplined than Sasha and Malia. He cast off his dismissive tone evident at his Twitter town hall the day before when he took one of Boehner's questions about excessive government spending and the lack of job growth.

First things first. There was never going to be a deal as long as Obama and Boehner and their legions of lieutenants and foot soldiers were - as they have been for the better part of two weeks - digging the trenches deeper, holding press conferences and churning out condemnatory press releases like confetti.

Advocates of go-big-or-go-home strategy sense momentum. The chairmen of Obama's deficit and debt commission, Democrat Erskine Bowles and Republican Alan Simpson, said they "are very encouraged by the reports that the president and congressional leaders in both parties are discussing a serious, comprehensive deficit-reduction plan with 'everything on the table.' Negotiators should hopefully work toward an agreement that achieves at least $4 trillion in deficit reduction, stabilizes our debt by 2015 and addresses Social Security solvency to ensure that our nation remains financially strong for future generations."

(RELATED: Boehner Says 'Maybe 50-50' Chance Deal Will Be Reached Soon)

But Democratic interest groups are furious over any discussion of reducing Social Security benefits. It could be the break-point for Obama and what his former press secretary Robert Gibbs famously referred to as the "professional Left."

"The idea of cutting Social Security as part of these debt-ceiling negotiations is simply ridiculous," said Jim Dean, rother of former Democratic National Committee Chairman Howard Dean and chairman of the Democratic grassroots political action committee Democracy for America. "At a time when America is hurting, when people are losing their jobs and their homes at an unprecedented rate, we are now going to tell the average American working family that they will have the burden of supporting their parents in old age and no retirement for themselves. Let's keep our priorities straight and stop giving away the farm to Republican bullies."

As this outside pressure increases, it's quite likely that rank-and-file lawmakers will continue to stake out their turf on what a deal ought to look like. But it's going to be much quieter at the leadership level. Volatility in Washington at the highest level could trigger volatility on Wall Street and every other trading index across the globe. To serve the country, leaders now need to turn the volume down in public and turn their attention toward the contours of a deal.

Right now, the pursuit is for a big deal. But Obama and Boehner must also have a Plan B and Plan C in mind. It appears that everything is on the table: Social Security, Medicare, Medicaid, spending cuts, user fees, broadband-spectrum auctions, recalculations of the Consumer Price Index, tax reform, corporate tax subsidies and other tax preferences ("expenditures" in the current argot). There is, at one level, a Great Recession feel to the ever-widening dimension of these talks. The current assumption appears to be the bigger the deal, the better its chances of surviving. You know ... too big to fail.

Obama knows this is crunch time. He doesn't have the leverage he thought he did. Republicans hold the votes and the fate of at least part of the economic recovery he needs in the palm of their hands. Obama also knows that if he makes this deal and reverses type on spending and entitlements, he blunts a wide array of GOP arguments in 2012 and opens up a dialogue he hasn't with independent voters for at least a year. Republicans know that governance matters and that raising the debt ceiling, protecting the economy, and driving the hardest bargain ever against a Democratic president in terms of spending cuts and entitlement reforms (all without raising tax rates) are goals that may never be closer than they are now. If Republicans were also to persuade Obama to embrace fundamental tax reform that would lower corporate and personal tax rates while also denuding the code of the current kudzu of tax favors, credits, set-asides and subsidies ... it might be a once-in-a-lifetime deal.

Washington doesn't do once-in-a-lifetime very often. Almost never, actually. Washington prefers once-every-year solutions (see the alternative minimum tax, Medicare "doc fix," continuing resolutions, and the current highway funding process for examples). Consequently, there's no reason to believe this will work. The reasons it should fail far outnumber the reasons it should succeed.

But at least the issues are on the table, the moment is at hand, and the participants are no longer having tantrums.

In Washington, that amounts to progress.

Image credit: Pablo Martinez Monsivais/AP