Grand bargain or grand illusion?

The word from Capitol Hill is that Speaker Boehner wants to resolve the current stalemate over the CR and the impending stalemate over the debt ceiling through a “grand bargain” on fiscal issues. Boehner reportedly has long wanted such a bargain. And now, according to NRO’s Bob Costa, “the House GOP’s most influential fiscal strategists, Dave Camp and Paul Ryan, are privately reassuring nervous Republicans that. . .a budget deal is in the works — and they should be enthused about what they’re cooking up.”

Boehner, Ryan, and Camp apparently thinking big. Their “grand bargain” reportedly would encompass entitlement reforms, such as chained CPI, elimination of the medical-device tax, delays to parts of Obamacare, and tax reform in exchange for delaying aspects of sequestration and extending the debt limit. The Democrats would, of course, seek increased revenues, whether through tax reform or increased rates under the current system.

Boehner’s grand bargain strategy sounds too good to be true, and probably is — not the reports that this is what he wants, but the notion that the Democrats will enable him to achieve a good bargain.

As October 17 (the deadline for raising the debt ceiling) approaches, the two most likely scenarios (in no particular order) are (1) widespread public disgust about the government shutdown with most blame going to the Republicans and (2) indifference to the shutdown. The other possibilities are widespread disgust with blame falling equally or falling mostly on the Democrats. But even with President Obama overplaying his hand, these scenarios are less likely than the first two.

In the first scenario, the Democrats will continue to play hard ball as October 17 approaches, either by rejecting “grand bargain” talks or driving a very hard bargain. Republicans might end up making a bad bargain just to escape from the box they have put themselves in.

In the second scenario — public indifference to the shutdown — the Democrats may well double down on their current “no pain for the public, no gain for the Dems” strategy. Knowing that the public almost certainly will not be indifferent to the consequences of the government being unable to borrow money, Obama may reject negotiations and dare Boehner and company to refuse to raise the debt ceiling.

As Republican members see their vision of a grand bargain turn into a grand illusion, and the economy very possibly about to take a big hit, they likely will back down quickly. Throughout this process, Republicans have been less unified than Democrats.

The other problem is the scope of a grand bargain. It’s difficult to see how it could be hammered out by October 17. So the parties presumably would have to reopen the government and raise the debt ceiling for a period sufficient to reach the bargain. But if the Democrats continue to believe they have the upper hand by a good margin, or will have it if the debt ceiling isn’t raised, they may lack sufficient incentive to accept a temporary truce.

I’m not saying that Boehner’s grand bargain strategy necessarily is worse than the alternatives at this point. And I’d be the last to criticize Reps. Camp and Ryan for being excited about “cooking up” a solution to our fiscal woes. I just hope that Boehner himself isn’t too excited, and that he and his caucus understand that the grand bargain strategy is more of a long-shot than sure-shot.

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