THE CAUCUS; Congressional Memo: Boehner’s Pursuit Of ‘Grand Bargain’ Comes With Risks

John Boehner

Speaker John A. Boehner has a risky habit he just can’t kick – and it is not smoking.

It is his determination to use the federal debt limit as leverage to win the ”grand bargain” he covets on taxes, spending and social programs. The famously chain-smoking Ohio Republican may ultimately cut his big deal and emerge a hero. But there are potentially serious repercussions for him and his party as well as President Obama and the Democrats.

Mr. Boehner took fellow lawmakers and the White House by surprise last week when he indicated a willingness to plunge back into the fight that devoured much of 2011. It didn’t end well for either side when the government bond rating was downgraded, the image of Washington took a beating and a subsequent special Congressional debt committee flopped. The result requires a $500 billion cut in Pentagon spending that Republicans are now trying to wriggle out of.

On Sunday, Mr. Boehner said he was ”not going to apologize for leading” by restarting the debate on the debt limit.

”Why do we want to wait and rush this through at the end of the year after the election?” he said during an interview on ABC’s ”This Week.”

So why would Mr. Boehner want to go down that road again? There are plenty of reasons, starting with the idea offered by his aides that Mr. Boehner genuinely sees the idea of simplifying the tax code, cutting spending and increasing the sustainability of Social Security and Medicare as the right and necessary thing to do.

”When the speaker says the debt is hurting our economy and threatening our future, it’s not spin,” said Kevin Smith, a spokesman for Mr. Boehner. ”He believes it to his core, and feels a very personal sense of responsibility to press Washington to deal with the problem while he has the chance.”

There are other factors at work. Mr. Boehner needs to get members of his unruly rank and file thinking about the idea that they might have to compromise in the months ahead on taxes and spending. Given the history of this House Republican majority, that might take time.

Republicans also believe they win when talking about debt and borrowing, reinforcing their narrative that Democrats have irresponsibly maxed out the nation’s credit card. Then there is the fact that Mr. Boehner’s biggest asset in the upcoming negotiations is the need to raise the debt limit. And he must get it on the table because the game has changed since 2011.

Because of the failure of the special debt committee, the Pentagon is facing steep reductions over the next decade under what is known as a sequester. Even though many of them backed the budget agreement, Republicans and some Democrats argue that those cuts are too deep and could not only weaken the military but might lead to significant job losses around the county if contractors are forced to lay off workers.

But the dirty little not-so secret on Capitol Hill is that many Democrats prefer those cuts — tough though they might be to swallow — compared with the alternative: offsetting another increase in the debt limit with even more cuts in domestic programs without some new tax dollars.

As a result, there is no way Democrats are going to sign off on any proposal that would raise the debt limit, extend Bush-era tax cuts and jettison the sequester without finding new revenue, preferably through higher taxes on the most affluent Americans.

”The bottom line is, to avoid the sequester they are going to have come up with a balanced approach,” said Senator Charles E. Schumer of New York, the No. 3 Senate Democrat.

Finding that balance might be tough for Mr. Boehner and run him afoul of the many House Republicans who are dead set against any increase in revenue. It is similar to last year when the speaker was willing to entertain up to $800 billion in new revenue in exchange for lower tax rates and significant changes in Social Security and Medicare. But whether he could ever sell that idea to his fellow House Republicans was a very open question before the entire deal collapsed in a breakdown with the White House. Pushing again for new revenue could mean trouble for Mr. Boehner.

In his remarks last week, Mr. Boehner sought to take the offensive, saying that Democrats lacked the nerve to do what is right. And he promised that the House would vote before the election to extend the Bush-era tax cuts in an effort to put the Democrats on the defensive.

Democrats think they have changed the calculus on taxes and can defend their refusal to extend the lower tax rates across the board by arguing that millionaires should pay more. But they will face a barrage of Republican attacks that they are supporting a tax increase and that could make Democrats in tough races nervous. Representative Nancy Pelosi, the Democratic leader, on Sunday sought to neutralize the issue by challenging the speaker to bring up the middle-class tax cuts for a separate vote, a decision Mr. Boehner is highly unlikely to make since it would provide Democrats cover.

As he tries to tie the debt limit, tax rates and sequester into the foundation of a new grand bargain, the speaker faces a problem with the calendar. The sequester and the tax cuts need to be dealt with by Jan. 1; the timetable for the debt ceiling increase is uncertain and the Treasury Department can be expected to stretch out the need for an increase as long as possible.

Mr. Boehner’s allies rate his record in negotiations with the White House to be pretty good, having struck agreements on spending cuts far deeper than what Democrats would have previously accepted, even though it came at a political cost.

Now he is again in pursuit of a grand bargain with the debt limit as his bludgeon. The test will be whether he can reach consensus with Democrats armed with the Pentagon cuts while not suffering political setbacks in November or losing the support of his own party.

This is a more complete version of the story than the one that appeared in print.

PHOTO: Speaker John A. Boehner wants concessions on taxes, spending and social programs in exchange for agreeing to lift the debt limit. (PHOTOGRAPH BY LUKE SHARRETT FOR THE NEW YORK TIMES)

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