DeCanting the Whine

At the very end of the meeting after hearing Republicans endorsing a short term deal, the very kind of deal President Obama has said he will not accept, the kind of deal he has said he would veto, he gave a speech.

Democratic officials said that he told the group that this is the kind of political posturing that Americans have a great distaste for, it's the kind of thing they always expect from Washington where politicians take political positions and cater to their bases rather than take hard stands on tough issues. And that is when the meeting broke up...

Republicans are now agreeing openly, at least House Republicans, that they do like this idea of a short term debt extension, which would require multiple votes before now and next year's election which makes it a political issue and changes the entire dynamic of these negotiations. And Tom, I'll tell you that the president again today repeated that he would veto any kind of short term deal which means if that's what House Republicans are pushing for, there is no deal.

This is where the President said to the group "this confirms the worst suspicion everyone has of Washington." The President was frustrated that Eric Cantor had now endorsed this short term deal idea and was frustrated that he had changed off of his prior position where he had wanted to go for a real deficit reduction --- in the words of Democratic officials --- into the short term idea.

And then she said that they are all still meeting tomorrow to discuss detailed spending cuts and for the first time tax revenues will be on the table.

Lost in the rush to frame the dramatic conclusion of Wednesday meetings was word of the actual substance of the talks. According to several attendees, negotiations stalled from the onset over the same issues that have proved irresolvable. Working off of talks that had been spearheaded by Vice President Joseph Biden, the president said he would be comfortable signing off on northward of $1.5 trillion in discretionary spending and mandatory spending cuts. With additional negotiations, he added, he could move that figure up to $1.7 trillion, and with a willingness to consider revenue increases and tax loophole closures, he added, lawmakers could get to over $2 trillion. His preference, he said, was to continue to push for the biggest package possible, so long as it was balanced.

Cantor, who has taken over the mantel of chief Republican negotiator from Speaker John Boehner (R-Ohio), responded by insisting that revenues were off the table and that without steeper cuts, the votes likely didn't exist to pass anything but a smaller, more temporary package. House Republicans needed the administration to go to a higher number, he added.

To which the president responded: "It is easy to get to a higher number when you are not asking anything difficult from yourself. "

From there, the friction remained. When the White House pushed for an extension of unemployment insurance as part of the final package, Republicans objected. The White House was forced to explain that it would be off-setting that extension with cuts elsewhere. When the president pushed to lock in savings from cuts to the Department of Defense, Republicans objected again; this time, they were joined by Sen. Dick Durbin (D-Ill.), who urged (conversely) for the president to go further in pulling savings out of the Pentagon.

According to a Democratic official, the most contentious debate came when talks turned to discretionary spending, and, specifically, whether to count long-term savings based on current spending baselines or by tying them to inflation. Republicans wanted the former. It was, the official said, a debate over the "measurements of savings as opposed to the savings themselves."

Talks, from there, turned to how to enforce those savings in the long run. Those discussions, which took place between Sen. Jon Kyl (R-Ariz.) and top economic adviser Gene Sperling, were described as cordial compared to the earlier ones. But lawmakers quickly found themselves back on the same sticking point.

Unhappy that negotiators remained at $1.7 trillion-or-so in cuts, Cantor pressed again for a shorter deal or for negotiators to find their way to $2.5 trillion. The president, growing more agitated, argued that attendees where simply looking for ways to say no.

"Talk about arbitrary," he said of Cantor's figure, according to a Democratic attendee. "I am totally willing to do the hard stuff to get well above what you need and you won't do it because you can't put one penny of revenue on the table."

he would be comfortable signing off on northward of $1.5 trillion in discretionary spending and mandatory spending cuts. With additional negotiations, he added, he could move that figure up to $1.7 trillion

I have reached the point where I say enough," Obama concluded, according to Reuters. "Would Ronald Reagan be sitting here? I've reached my limit. This may bring my presidency down, but I will not yield on this."

Negotiators have been aiming for a deal that would secure at least $2.4 trillion in deficit savings in order to extend the debt limit through the end of next year. Cantor charged Wednesday that the White House’s figure for those potential deficit savings was consistently “going downward,” from $1.8 trillion last week to “not even” $1.4 trillion, due to Democrats’ insistence on the inclusion of unemployment insurance and health-care expenditures in the final deal.