McConnell demands unbalanced deal

Updated
 

Senate Minority Leader Mitch McConnell (R-Ky.) had a busy morning yesterday, appearing on NBC, ABC, and CBS to repeat his favorite talking points. For example, viewers got to hear the Republican complain, five times, that the nation has a “massive spending addiction,” though the rhetoric has no basis in reality. McConnell also insisted President Obama is “unwilling” to cut spending, suggesting the Minority Leader may be suffering from a poor memory.

Of particular interest, though, were McConnell’s thoughts on creating a new debt-ceiling crisis.

For those who can’t watch clips online, McConnell remains unembarrassed by the notion of threatening to hurt Americans on purpose to force cuts to Social Security and Medicare – cuts he expects the White House to initiate in the hopes of making Republicans happy (and giving them cover). But David Gregory also asked specifically about applying new revenues, not through higher tax rates, but through tax reform. McConnell replied:

“Yeah, that’s over. I’m in favor of doing tax reform, but I think tax reform ought to be revenue neutral as it was back during the Reagan years. We’ve resolved this issue. Look, we don’t have this problem because we tax too little. We have it because we spend way, way too much. So we’ve settled the tax issue.”

This was an important quote because it suggests the Republican-created crisis is much more likely to get worse before it gets better.

Stepping back and looking at the coming fight in the larger context, a resolution should be relatively simple. Sometime between now and the end of February, policymakers have to work out a deal worth about $1.2 trillion, and the White House has said the agreement needs to be “balanced.”

With that in mind, the picture is easy to imagine – Republicans accept $600 billion or so in new revenue through closed loopholes and deductions, Democrats accept $600 billion or so in entitlement “reforms.” The whole deal could come together relatively easily.

Indeed, let’s not forget that a month ago, GOP leaders, including House Speaker John Boehner (R-Ohio), were prepared to accept new revenue as part of a bipartisan fiscal deal, and said they wanted that new revenue to come exclusively through tax reform. In fact, as far as Boehner was concerned, policymakers can find up to $800 billion in new revenue to apply towards debt reduction entirely through the reform process, without touching rates at all.

Now, however, we’re seeing a sharp shift in posture. As far as McConnell is concerned, Republicans could offer a balanced deal, and could offer hundreds of billions of dollars in revenue to reduce the debt, and did propose this just a few weeks ago, but now the idea is off the table. Why? Because Republicans say so.

Obama is looking for a 50-50 deal; McConnell is demanding a 100-0 deal. There’s an obvious resolution, and 24 hours ago, McConnell ruled it out entirely.

Debt and Mitch McConnell

McConnell demands unbalanced deal

Updated