Doug Mills/The New York TimesPresident Obama met with Speaker John A. Boehner and the Congressional leadership in the Cabinet Room on Thursday to continue discussions on a balanced approach to deficit reduction.By now, everyone is surely a bit confused.
Anyone watching the news this week understands that President Obama and lawmakers are racing the clock to raise the nation’s debt ceiling by Aug. 2 while passing legislation to address the country’s soaring deficit.
But after weeks of high-level, closed-door negotiations in the nation’s capital, there are more than a half-dozen proposals floating around that might achieve that.
Democrats like some; Republicans like others. And some plans appear to be disliked equally by members of both parties. It’s hard to keep them straight.
And so The Caucus has pulled together an explainer of the key proposals that Mr. Obama and his Republican adversaries are arguing about.
The White House announced on Thursday night that Mr. Obama will hold another news conference Friday morning — his third in a matter of weeks — to discuss the status of the debt negotiations.
But in the meantime, here’s a cheat sheet that might help to make sense of the options that are, or once were, on the table:
1. The Grand Bargain. Two weeks ago, Mr. Obama and House Speaker John A. Boehner began quietly meeting to discuss the possibility of a “big deal” that could satisfy the immediate concern of the country’s borrowing limit as well as the long-term issue of the nation’s spending.
The Grand Bargain was born. It envisioned more than $4 trillion in deficit reductions over 10 years, including as much as $1 trillion in new revenue that would come from an overhaul of the tax system. Details were sketchy since the two leaders discussed the plan largely by themselves.
But the Grand Bargain didn’t last long. When Mr. Boehner presented the idea to his Republican colleagues, they balked. Within days, Mr. Boehner pulled back from this approach, saying that a big deal was no longer possible due to differences over tax revenues.
2. The Half-Bargain. Also known as the Biden Plan, it was developed during weeks of negotiations led by Vice President Joseph R. Biden Jr. and envisioned about $2 trillion in cuts, with several hundred billion dollars worth of new revenues. In exchange, the debt ceiling would be increased.
But Representative Eric Cantor of Virginia, the majority leader in the House, walked away from the talks, saying that the Republicans in his chamber could not accept any tax increases.
Now, some lawmakers are saying the leaders in Washington should return to the Biden approach as a guide for getting a deal done before Aug. 2. The hangup remains the tax increases favored by Democrats on wealthy jet owners, hedge fund managers and big oil companies.
3. The House Cuts. In meetings at the White House, Mr. Cantor has been pushing Mr. Obama and Democrats to agree to $2.4 trillion worth of spending cuts — with no revenue enhancements.
That would allow the debt limit to be increased by the necessary $2.4 trillion, but Republican lawmakers could say they cut spending by an equal amount when they go home to face their constituents.
Mr. Obama and Democrats have balked at that, saying that spending cuts of that magnitude would inevitably affect programs for the middle class like student loans, veterans benefits and entitlement programs like Medicare and Medicaid.
The president, in the meetings, has repeatedly stressed his belief that cuts like that are not fair, especially if wealthy individuals don’t have to suffer the pain of tax increases at the same time.
4. The White House Cuts. During the afternoon meetings, Mr. Obama has countered with cuts of about $1.5 trillion to $1.7 trillion. That would begin the process of reducing the nation’s long-term debt but would not cut as deeply into lower- to middle-class programs.
Mr. Cantor and his Republican allies in the White House meetings have said that amount is not large enough, and that the plan would not be able to win support from conservatives in the House, who believe that raising the debt ceiling by more than they cut spending would look like a failure.
5. The Stop-Gap. In a sometimes testy back-and-forth with the president, Mr. Cantor suggested a series of stop-gap votes that would increase the debt ceiling by a more modest amount but would avoid the threat of the nation defaulting on its obligations.
The Stop-Gap plan would require several votes — not just one — during the next 18 months to keep raising the debt ceiling. Each of those would be an opportunity to cut more spending even as they increase the borrowing authority.
Mr. Obama has steadfastly refused to accept that idea, saying privately — and publicly — that he would veto any short-term proposal that does not significantly address the nation’s long-term debt and deficit problem.
6. The Balanced Budget Plan. Even as the White House negotiations have stalled, conservatives in the House are pushing another idea: tying an increase in the debt ceiling to the passage of a constitutional amendment requiring Congress to balance the budget.
Such a bill has been debated for decades and would need the approval of two-thirds of the state legislatures even if it ever passed the Congress. But members of the Republican Study Committee, a conservative wing of the House Republicans, are pushing it as a key part of the long-term fiscal solution.
Mr. Boehner has recently endorsed the idea, saying passage would give conservatives assurance that the country’s finances are headed in the right direction.
But Mr. Obama and Democrats are dead-set against it. A White House spokesman this week called it the ultimate abdication of responsibility and said the Congress should not need such a thing if they could simply muster the political will to do the right thing.
7. The McConnell Option. Fearful that all of the other options were unlikely to earn enough support, Senator Mitch McConnell of Kentucky, the Republican leader, came up with a novel one of his own.
His plan would not mandate deficit reduction in exchange for an increase in the debt ceiling. Rather, Congress would essentially grant Mr. Obama the ability to raise the debt ceiling on his own, in three increments during the next 18 months.
Congress would have the ability to vote to disapprove of the debt-ceiling increases — no doubt that would be a popular vote to cast — but Mr. Obama could veto that disapproval and increase the debt ceiling anyway.
The approach would provide certainty to the markets because they could stop worrying that the debt ceiling might not be increased. But it would also give Mr. Obama the politically dubious responsibility of being the one to make the unpopular move.
Even so, Mr. Obama and some Democrats have reacted positively to the idea, saying it might be a way to avoid the threat of a default.
Conservatives in the House have reacted negatively, fearing that they would lose their opportunity — and their leverage — to force major spending cuts and a corresponding reduction in the size of government.
8. The Hybrid McConnell. The most recent chatter in Washington is about the possibility that Mr. Obama and Republicans might agree on a modified version of Mr. McConnell’s plan.
Under that approach, Mr. Obama would be given the authority to raise the debt ceiling, but both sides would also agree to a series of cuts that would begin to reduce the nation’s long-term debt. Those cuts might approach the levels proposed by the White House during the afternoon meetings this week.
It’s not clear whether House conservatives would go along with the plan. And much would still have to be negotiated. But on Friday, Mr. McConnell and his Democratic counterpart in the Senate, Senator Harry Reid of Nevada, the majority leader, are set to continue discussions on how a plan might work.
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