The Note: A Deal — If They Can Keep It

Aug 1, 2011 9:01am

By MICHAEL FALCONE (@michaelpfalcone) and AMY WALTER (@amyewalter)

After all the pontificating, posturing and politicking it’s come down to this: a deal to raise the debt ceiling and trim government spending that doesn’t make anyone happy.

“Is this the deal I would have preferred?  No,” President Obama said at the White House last night. “I believe that we could have made the tough choices required — on entitlement reform and tax reform — right now, rather than through a special congressional committee process. But this compromise does make a serious down payment on the deficit reduction we need, and gives each party a strong incentive to get a balanced plan done before the end of the year.”

At this hour the markets are the only thing happy a deal is at hand. Futures are pointing toward a strong opening in the U.S. and foreign markets are already up.

But, as ABC News Business Unit correspondent Dan Arnall points out, “there are still a few dangerous steps on the road to our road to fiscal redemption.” The first, of course, is getting this deal through Congress, despite the objections of some liberal Democrats and Tea Party Republicans. 

ABC’s Jake Tapper report that, in a nutshell, the deal includes a debt ceiling increase of up to $2.4 trillion — enough to last through the 2012 presidential election; $900 billion to $1 trillion in spending cuts over 10 years achieved by capping the rate of growth of the discretionary budget with a firewall between security-related spending (i.e. defense) and non-security spending to make sure at least $350 billion comes from the former category; a new special Congressional committee (nicknamed the “supercommittee”) to recommend additional deficit reduction of up to $1.5 trillion. http://abcn.ws/pNrhiM

Liberal Democrats like Rep. Emanuel Cleaver, D-Mo., see the agreement as an abdication of Democratic priorities. 

“This is a Satan sandwich,” Cleaver said in an interview with ABC News, “there’s no question about it because there’s nothing inside this sandwich that the major religions of the world would say deals with protection for the poor, the widows the children, it’s not in here.”

Meanwhile, many conservative Republicans are unhappy, feeling that the deal doesn’t do enough to deal with serious deficit reduction. This morning, the conservative “Cut, Cap and Balance” coalition came out against the compromise.

“The Cut, Cap, Balance Coalition will not support this bill because it clearly fails to meet the standards of the Cut Cap Balance Pledge,” a statement from the coalition members read. “The most glaring shortcoming is that the second debt ceiling increase in this package isn’t tied directly to Congressional approval of a balanced budget amendment as a pre-condition.  It may therefore be avoided altogether.”

(Thirty-nine House Republicans and ten Republican Senators signed this pledge.)

GETTING TO THE MAGIC NUMBER. The deal still has to pass both Houses of Congress in less than 48 hours and now it comes down to counting votes. ABC’s Jon Karl expects that Boehner will need at least 70 Democrats to vote for it, and that’s a tough sell in a House of Representatives that has been as polarized as ever. “Republican ‘no’ votes are likely in the 80 to 100 range, which means you could need 76 Democrats,” Karl says.

Check out Jon Karl’s vote-count whiteboard: http://abcn.ws/rtPwaJ

White House Senior adviser David Plouffe told ABC’s George Stephanopoulos this morning on “Good Morning America” that he is “confident this deal will and should pass.”

Watch Plouffe’s full interview with George: http://abcn.ws/r4lbMZ

For all the posturing by many in Congress about not “kicking the can down the road” this deal punts that thing into another county. Let’s be honest, any real progress on serious deficit reduction can only be accomplished by handling the twin third-rails of politics: entitlement and taxes. The “kicking the can” could have real world consequences from ratings agencies who could still downgrade our debt, even with immediate crisis averted.

RACE FOR THE SIDELINES. Most of the GOP presidential hopefuls have so far steered clear of taking a position on the deal finalized yesterday. Former U.S. Ambassador to China Jon Huntsman came out in support of the deal (“While this framework is not my preferred outcome, it is a positive step toward cutting our nation’s crippling debt”) while Rep. Michele Bachmann is against it (“Throughout this process the President has failed to lead and failed to provide a plan. The ‘deal’ he announced spends too much and doesn’t cut enough. This isn’t the deal the American people ‘preferred’ either, Mr. President. Someone has to say no. I will.”)

But most notably, former Massachusetts Gov. Mitt Romney, who has assiduously avoided taking any sort of definitive position on the issue over the last few weeks, remained silent.

Avoiding taking a stand seems like smart strategy. After all, Romney’s greatest asset is the fact that he can distance himself from the mess in Washington. Why get wrapped up in this mess which has tainted everyone involved?

Even so, it remains to be seen if Republican primary voters will be happy with this strategy, or if they would have preferred their candidates to be fully engaged in the fight. One Democratic strategist notes this will hurt Romney in the long term since it reinforces the stereotype of him as a guy with a “finger in the wind” political compass who “refused to lead at a moment of national peril.”

ABC NEWS’ COUNTDOWN CLOCK: 1 DAY TO DEFAULT: http://abcnews.go.com/politics

 

THE BILL. The full text of the Budget Control Act of 2011 is now available online (74 pages): http://bit.ly/oOGyfJ

THE SUPERCOMMITTEE. ABC’s Jake Tapper reports that the so-called supercommittee set up by the bill would be composed of 12 members. Each leader (Speaker Boehner, Democratic Leader Nancy Pelosi, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell) picks three.

“They’ve each indicated that they’ve given it a lot of thought and that they’re guided by putting the kind of serious, consensus-building members on it that it would take for it to be successful,” a senior White House official says.

But, picking the members is just the beginning. More from Tapper: “Congress is prepared for a fight over what the super-committee can even attempt in terms of tax reform. Republican leadership is telling members that any lowering of rates – even if combined with a net gain in revenue with the simplification of the code — would be scored by CBO as adding to the deficit. The White House pushes back at this, saying the super-committee can use whatever baseline it wants.”

@nytjim: Useful scorecard from WashPost on who got what and who gave up what in #debt deal. http://wapo.st/pkn7dU

 

ABC NEWS SPECIAL COVERAGE. Tonight, Diane Sawyer will anchor “ABC World News” from Washington, DC. Sawyer will bring viewers the latest on the unfolding deal from Capitol Hill and she will reconvene a panel of freshman Tea Party lawmakers who she first interviewed earlier this year.

Here are their bios: http://abcn.ws/gHVnU4 and here’s Diane’s full interview from January: http://abcn.ws/fFMLHI

 

ON TODAY’S “TOP LINE”:  ABC’s Amy Walter and Zach Wolf hear from Congressman Jason Chaffetz. Chaffetz is a Republican from Utah and a member of the Tea Party Caucus. He was one of the few Republicans to vote against Speaker Boehner’s debt deal on Friday, saying that the plan did not go far enough. Also on the program, Rep. Jeff Duncan, R-S.C. The freshman congressman was one of the first to sign the “Cut, Cap and Balance” pledge. Watch “Top Line” LIVE at 12:00 p.m. Eastern. http://abcn.ws/toplineliveabc   

 

THE BUZZ

THE STAKES FOR BOEHNER. “All year long, House Speaker John Boehner has struggled to corral his large but raucous Republican majority. Now comes the ultimate test,” the Wall Street Journal’s Patrick O’Connor and Corey Bowles note. “At stake is both the deal itself but also the speaker. If Mr. Boehner has to pass the vote by relying on Democratic votes—and if he loses more than half of GOP lawmakers in the process—he might avert default while imperiling his effectiveness as a leader.” http://on.wsj.com/oD50o2

NO CLEAR WINNERS. President Obama and Congressional leaders have stitched together an agreement to prevent a national default, provided their 11th-hour deal does not fracture on Monday, but the epic budget battle has failed to resolve another question: which party can be better trusted to govern?” writes The New York Times’ Jeff Zeleny. “The president, with his re-election on the horizon, emerges from the showdown in a diminished state after giving considerable ground and struggling to rise above a deep partisan intransigence that has engulfed Washington. And Republican leaders, especially Speaker John A. Boehner, are bruised after navigating the intractable sentiment of the Tea Party movement. A full victory lap was not expected — or, perhaps, deserved — by those on either side of the debate, which has consumed the capital, unnerved the financial markets and infuriated the American public. Yet even as a compromise was announced on Sunday evening, both parties were prepared to try to define the deal as staying true to their respective principles. … Mr. Boehner faces an immediate test on Monday, needing to bring along enough Republicans to push the deal through the House. The Republican presidential field will have to decide how to navigate between the compromise reached by Congressional leaders and the passions of the Tea Party movement. Mr. Obama’s challenge is to reassert himself as a leader and use the outcome to position himself on the campaign trail as the voice of reason and moderation in a bitterly polarized capital.” http://nyti.ms/r9Nziu

UNINTENDED CONSEQUENCES: CONGRESSIONAL LOGJAM.Whether or not the debt ceiling is raised before Tuesday’s putative deadline, one thing is sure: The debate has created a massive congressional logjam,” The Hill’s Niall Stanage writes. “Nothing else has seemed to matter, even though advocates from disparate points on the ideological spectrum say there are plenty of topics crying out for attention. Former Sen. Pete Domenici (R-N.M.), erstwhile chairman of the Senate Budget Committee, told The Hill that the tortuous negotiations this summer amounted to ‘the biggest usurpation of time and energy that I have ever seen.’ ‘’The whole activity of the Congress has been turned on its head,’ Domenici said. ‘There has been no budget for two years, [which is] really incredible … Continuing resolutions were not intended to operate the government for month after month.’ And it is not as though Aug. 2 will break the logjam. In fact, Washington is going to have to get used to the idea of perpetual fiscal crisis, for there is no end in sight. No appropriations bills have yet been enacted and Congress will have just three weeks to deal with them before the new fiscal year begins Oct. 1, when the nation could once again face a government shutdown.” http://bit.ly/nOe8k8

RICK PERRY WATCH: OUTSIDE HELP. “A new so-called super PAC supporting a prospective Rick Perry presidential campaign is going up Monday in Iowa with a statewide television buy touting the Texas governor as ‘a better option’ for president,” Politico’s Ken Vogel reports. “Jobs for Iowa is spending less than $40,000 for two week’s worth of air time on Fox News Channel in the state, a source familiar with the group told POLITICO. But the group is rumored to have the backing of wealthy Texas Republicans who have long supported Perry and are considering expanding the ad campaign to other states in the near future. In fact, the operatives they’ve retained to create and run the super PAC l on the same day established a pair of linked super PACs in other states that have key early Republican presidential primaries, Jobs for South Carolina and Jobs for Florida. The Iowa ad praises Perry as ‘a conservative with proven leadership’ who has created jobs and balanced budgets in Texas ‘in tough times,’ and concludes ‘What if we had a better option for President? We do. Rick Perry.’ Perry has repeatedly hinted that he’ll seek the Republican presidential nomination, but has said he’ll wait until after Labor Day to declare his intentions. He was left off the ballot for the Aug. 13 straw poll in Ames, Iowa, which is considered a key bellwether of the strength of presidential campaigns in the state headed into its first-in-the-nation nominating event, the Iowa caucuses.” http://politi.co/rhfj61

DUELING SUPERPACS. ABC New Political Director Amy Walter reports: Priorities USA, the Democratic SuperPAC founded by two former aides to President Obama — Bill Burton and Sean Sweeney — reported raising $3.16 million in the first six months of the year and showed $1.8M in the bank. “Priorities USA Action spending reflects our goals of countering Karl Rove and the Koch Brothers and holding Republican candidates accountable,” according to a statement from the group. “We’ve invested in early advertising to highlight Republican proposals to end Medicare and to counter Karl Rove’s $20 million in deceptive ads.” Meanwhile, the conservative Crossroads PAC (which Priorities USA is referring to in their statement) raised $3.9 million. Priorities has $1.84 million in the bank to Crossroad’s $3.28 million. But this isn’t the pool of money from which the independent ads will be financed. That money will be raised and spent from the 501 (c)(4) arms of these groups. Like the SuperPACs these non-profit groups can raise unlimited amounts from their donors but unlike a PAC, they don’t  have to disclose their donors.

 

NOTED: CALL FOR INTERNS. The Note and the ABC Political Unit are in the market for interns for the Fall of 2011. We require actively enrolled students and we prefer applicants who are spending the semester in DC and can commit a regular 9-5 schedule. E-mail a resume and cover letter to Zachary.B.Wolf@abc.com

 

WHO’S TWEETING?

@waltershapiroPD: OK, Obama’s an inept negotiator. OK, the House GOP brazenly risks default. But the debt deal is a shuck. My latest: http://bit.ly/qREMbZ

@pwire: Reich: “Anyone who characterizes deal as a victory over partisanship understands neither economics nor politics.”http://pwire.at/qNhMgc

@ktumulty: Know who i want on the super committee? The senate chaplain. Don’t miss great piece by @fahrenthold #debt http://wapo.st/pHm0I

@grove: Our Ramadan live stream from Al-Masjid al-Haram in Mecca begins:goo.gl/Cckc5

@SteveCase: Apple Launching New iPhone in October (not September) http://dthin.gs/nj69Yx

 

POLITICAL RADAR: 

(all times local)

*Michele Bachmann attends the “Join Me in Ames!” sign up event in Newton, Iowa at noon. At 5 p.m. she leads the Dexter Backyard Chat at the Voss family home in Dexter.

* Rick Santorum visits Washington, Muscatine, Davenport, Clinton and Tipton as part of his Santorum Family Tour.

* Jon Huntsman tours FIRST, a non-profit that encourages young people to hone math and science skills, with inventor Dean Kamen at 12:30 p.m. in Manchester, N.H. At 6:30 p.m., he speaks at a house party in Rochester.

 The Note Futures Calendar: http://abcn.ws/ZI9gV

 

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* For breaking political news and analysis check out The Note blog: http://blogs.abcnews.com/thenote/and ABCNews.com/Politics: http://abcnews.com/politics

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