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Debt Deal Emerging With Rightward Tilt

Tom Williams/Roll Call
Senate Democratic Policy and Communications Center Chairman Charles Schumer (center) said Democrats would continue to push for revenue changes as part of a joint deficit committee that would be created by the emerging debt deal.

President Barack Obama’s rightward lurch to reach a $3 trillion deficit reduction deal with no guarantee of additional revenues had liberals fuming and Republicans all but declaring victory Sunday afternoon.

With time running out to reach an agreement to raise the debt ceiling before Tuesday’s default deadline, Obama moved dramatically in the direction of the GOP, according to Senators and aides in both parties.

As details trickled out Sunday, the deal framework appeared to give Republicans most of what they were seeking — with about $3 trillion in guaranteed spending cuts but no tax increases, Senate Minority Leader Mitch McConnell said Sunday.

“We are going to deal with this problem the American people sent us here to deal with, which is that the government has been spending too much,” the Kentucky Republican said on CNN.

In return, Obama, whose poll numbers are at all-time lows, gets to avoid another debt ceiling battle before voters head to polls in November 2012, and he will be able to argue that he was willing to compromise to help save the country from a default crisis.

Senate Majority Leader Harry Reid (D-Nev.) also signed off on the deal late Sunday afternoon, “pending caucus approval,” said his spokesman, Adam Jentleson.

But first, the president and Democratic leaders could face a backlash from liberals angry that they appear to have agreed to a revenue-free debt ceiling bill that includes a “trigger” only for automatic cuts in defense, Medicare and other programs if a second deficit reduction package isn’t enacted by the end of this year.

Rep. Emanuel Cleaver, chairman of the Congressional Black Caucus, said early reports of the new deal appeared to be “a sugar-coated Satan sandwich.” The Missouri Democrat said the CBC hadn’t yet made a formal declaration that the group would oppose it, “but this is a shady bill.”

“This deal trades people’s livelihoods for the votes of a few unappeasable right-wing radicals, and I will not support it,” ripped Rep. Raúl Grijalva (D-Ariz.), co-chairman of the Congressional Progressive Caucus, before House Democrats had even been briefed. “The lesson today is that Republicans can hold their breath long enough to get what they want.”

For weeks, liberals have feared that Obama would give in to Republican demands for trillions in spending cuts without a guarantee of “sacrifice” from the wealthy. In a last-ditch effort to stop such a deal, progressive lawmakers amped up their calls that Obama simply ignore the debt ceiling and use the 14th Amendment as a justification.

The White House tried to tamp down the liberal unrest by making it clear that Obama still wants revenue in a final deficit reduction package later this year. That deal would be crafted by a new joint committee, which would be created under the tentative agreement.

National Economic Council Director Gene Sperling said on CNN that Obama would still insist on a balanced package that includes tax reform, and he noted that the president still does not support anything that would cut benefits for seniors without asking the wealthy to sacrifice as well.

But there is no guarantee that Republicans will give an inch on revenues.

One senior House Democratic aide said the deal appeared to be so bad for the Democrats that it might get fewer than 50 votes from their side. That could force Speaker John Boehner (R-Ohio) to corral the vast bulk of the votes from his Conference.

Rep. Kurt Schrader, a member of the Blue Dog Coalition, predicted more optimistically that 80 Democrats would back it.

“While we’re a very diverse Caucus, at the end of the day, we’re not going to put our ideology ahead of the good of the country,” the Oregon Democrat said.

Still, Obama may have some persuading to do in order to get his Democratic colleagues on board.

“I think the president will come in here and sell whatever agreement he comes to,” Schrader predicted.

Selling the package to House Republicans, meanwhile, could be a lot easier given that the deal builds off of Boehner’s own bill. The package that was emerging Sunday afternoon would eliminate the requirement that a balanced budget amendment to the Constitution be passed and sent to the states — but it would include at least a vote on such a proposal in both chambers.

Sen. Carl Levin said the president did not appear to be willing to make the sustained argument that the wealthy pay their fair share but would at least have another chance next year when the Bush tax cuts are set to expire and the nation’s credit rating isn’t on the line.

“The question is how hard he will fight,” the Michigan Democrat said.

Several Senate Democrats appeared resigned to backing a revenue-free deal, even as the details were still being ironed out.

“I think not having revenues is a mistake, but it may be all we can do at this point,” Sen. John Kerry (D-Mass.) said.

Sen. Dianne Feinstein (D-Calif.) said, “I’m not pleased with having it happen this way.” She added she would probably back it “because I think the worst possible thing is for us not to pay our bills.”

Sen. Charles Schumer (D-N.Y.) also said on CNN that Democrats would still push to have revenue included in a final package to be negotiated later by a new 12-person joint deficit reduction committee. That committee would be empowered to send a package without amendment to the House and Senate floors for up-or-down votes by Thanksgiving.

Some Democrats said the political consequences of the joint committee failing to act would hit the GOP more than on the president’s party. Talks on the details of a trigger, which several Senators and aides said was still being tweaked Sunday, included accommodations that would make it more palatable to Democrats.

Though the trigger would force cuts to Medicare, those cuts would come from Medicare providers rather than beneficiaries directly, Democratic Senators and aides said. And large defense cuts are intended to bring the GOP to the table to compromise.

Levin said that if the trigger affected Medicare benefits directly, very few Democrats could support it.

One advantage of such a trigger is that it would create a large array of powerful interests — from defense contractors to health care providers — who would have a huge stake in the passage of a second deficit reduction plan.

And there is also a political advantage to the trigger for Democrats as well. If Republicans opted to pull the trigger rather than agree to any tax increases, Democrats could blast them in the 2012 campaign as hurting seniors to protect millionaires and billionaires.

“That gives a political argument, but in the meantime, there’s a hell of a lot of damage done to average people in this country,” Levin said.

Some Democrats were still looking to sweeten the deal Sunday afternoon, with Senate Majority Whip Dick Durbin (Ill.) saying he hopes the package will extend the payroll tax cut for another year.

The joint deficit committee inspired fear in both parties. Some liberal groups think it has too much power to slash entitlements, while some conservatives are afraid it could be a way to force through a tax increase.

But Sen. John Cornyn (R-Texas) dismissed such concerns. A tax increase would “never pass the House,” he said.

Reid, who conceived the committee idea, said “it will be essential to choose members with open minds willing to consider every option — even when those options are tough pills to swallow for both parties. Cooperation is the only way forward.”

Jessica Brady, Meredith Shiner and John Stanton contributed to this report.

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