Speaker John Boehner and President Obama finally agree on something: there is no immediate debt crisis. But does this agreement bring the two sides any closer to a grand bargain?
“We do not have an immediate debt crisis,” Speaker John Boehner said on ABC’s This Week Sunday, echoing both Rep. Paul Ryan and President Obama in a rare point of agreement on the nation’s fiscal issues.
Last week, Obama told ABC’s George Stephanopolous that “we don’t have an immediate crisis in terms of debt,” and, “in fact, for the next 10 years, it’s gonna be in a sustainable place.” The president’s remarks provoked an outcry from those who thought a blasé treatment of the country’s deficit would harm the chances of a grand bargain.
A major Republican contention is that growing debts pose a threat to economic growth. In exchange for modest reform on entitlements–the key drivers of the debt–Republicans would concede (in theory) on what Democrats want: new revenues. But if Obama doesn’t see danger in the deficit, the thinking went, what’s either party’s incentive to make a deal?
Now Boehner and Ryan are conceding that point as well, that there is no immediate debt crisis–but with a qualifier: a crisis is on the way.
“We do not have a debt crisis right now,” Ryan told CBS’s Face The Nation Sunday. “But we see it coming. We know it’s irrefutably happening. And the point we’re trying to make with our budget is, let’s get ahead of this problem.”
“We all know that we have [a debt crisis] looming,” Boehner told Martha Raddatz Sunday. ”And we have one looming because we have entitlement programs that are not sustainable in their current form. They’re gonna go bankrupt…[Obama's] point, as he went on to say in that interview, is that we don’t really need to do anything at this point. And I would argue that we do need to do something.”
Boehner believes that balancing the budget will lead to economic growth, because when “the government continues to spend more than a trillion dollars every year that it doesn’t have, [it] scares investors, scares business people, makes them less willing to hire people.”
Obama has the exact opposite position when it comes to the causal relationship between debt and economic growth. As he told Stephanopolous, he won’t “chase a balanced budget just for the sake of balance.” He wants to grow the economy by focusing on employment, an anti-austerity, not-quite-Keynesian growth strategy that will fix our debt issues when a larger work force introduces more revenue into the system.
The president is still willing to compromise on entitlements if he can get the GOP to compromise on revenue. But that’s not a deal Boehner is interested in. He told Raddatz that “talk about raising revenue is over.” The speaker may agree with the president on whether or not we have an immediate debt crisis, but it’s an agreement that doesn’t look to bring either side closer to a deal. As MSNBC’s Chris Matthews pointed out on Meet The Press Sunday, Obama’s version of a grand bargain might have looked toxic from the beginning:
“If you’re a Republican, the Democrats are basically saying, ‘Why don’t you raise taxes on people that have big tax loopholes…and in exchange for that we’re going to let you take responsibility for cutting Medicare. Why would any Republican ever seek reelection saying, ‘Yes, I did raise taxes on people in this audience, and I also screwed you on Medicare.’ Why would anyone want to do that?”