The most shocking thing about the “grand bargain” is how quickly it was abandoned.
It was Republicans, after all, who made the debt ceiling crisis into a crisis, who insisted that they wouldn’t pass a new debt ceiling unless there were large budget cuts involved, who accused President Obama of not being engaged in the process.
So, what happened?
Obama said yes to the idea of making a real deal. He and Speaker John Boehner worked privately for weeks on the bargain. And then Boehner, told that his caucus would never support the package if it included tax hikes, walked away.
In a news conference Monday, Obama tried to resurrect the deal. More than that, he tried to make it clear that he would play the role of grown-up in this process. If it wasn’t clear enough, he told the country that it was time to “eat our peas” (though it’s fair to note that Obama’s appetite didn’t exist when his deficit commission released its recommendations in November or when he released his budget in February).
The vegetable dish that he was willing to stomach included a $4 trillion budget package, with nearly all the ingredients you could ask for, including Medicare cuts and $800 billion in tax hikes. It also reportedly had a bit of tax reform and further entitlement reform. If it was a lot to take in, it was still what many of us have been asking Washington to swallow.
Some liberals were ready to rage against it, but didn’t really get the chance. The deal disappeared before they knew exactly what was in it.
Republicans, it seems, want Obama to continue negotiating against himself. Strangely, though, none of this could have happened without the insistence of the Tea Party caucus.
Remember that in all other years, there is no debt ceiling crisis. Republicans and Democrats alike routinely raise the ceiling. It was raised seven times under George W. Bush.
There’s a reason for that. Failing to pass a new debt ceiling “would be a financial disaster, not only for us, but for the worldwide economy.” Those were Boehner’s words in January.
If the debt ceiling isn’t addressed by Aug. 2, there is a great chance that the United States of America, the richest country in the world, would default on its obligations.
If you wonder what that might mean, Obama played the Social Security card while on CBS News Tuesday night, saying that he “cannot guarantee” 70 million Americans would get their various government checks if the ceiling isn’t raised.
But with risk, there is also opportunity, in this case the chance to take on the outsized debt with a large package of tools. The grand bargain was similar in style to the Simpson- Bowles report. It was bolder than anything the Senate Gang of Six could agree on.
And yet, there is no deal. Trying to regain favor in his caucus, Boehner now says the debt ceiling is “his problem”— meaning Obama’s. But, of course, the risk of default is everyone’s problem. And one still very much in search of a solution.
