The coming fight over the debt ceiling: An optimistic take

By Doyle McManus

Jan. 7, 2013 12 AM PT

In my Sunday column, I wrote that Speaker of the House John A. Boehner (R-Ohio) has won reelection to the worst job in Washington. He’s leading a fractious, unhappy Republican majority that just lost a battle over income tax rates, partly because of its dysfunctional divide between pragmatic conservatives and tea party hardliners. And now he must lead them into an even larger battle next month over federal spending and the debt ceiling.

Boehner might not disagree. “I need this job like a hole in the head,” he told Stephen Moore of the Wall Street Journal. The speaker confirmed that last month’s “fiscal cliff” negotiations were so heated that at one point he told Senate Majority Leader Harry Reid (D-Nev.): “Go [blank] yourself.”

In Boehner’s telling, the prospects for the next round of negotiations don’t sound much better. He described his talks with President Obama as a dialogue of the deaf. He said Obama told him: “We don’t have a spending problem” -- merely “a healthcare problem.” Boehner’s response: “Mr. President, we have a very serious spending problem.” Obama’s reply: “I’m getting tired of hearing you say that.”

So will the debt ceiling showdown turn into a full-blown crisis, with a government shutdown, a market crash, or even a disastrous default on the federal debt?

Not necessarily. The Obama-Boehner argument over defining our fiscal problem obscures a basic issue on which both parties agree: spending on healthcare, including Medicare and Medicaid, must come down.

Obama has already taken modest steps toward cutting spending on Medicare, and even entertained the idea of raising the health plan’s eligibility age from 65 to 67 until he was shouted down by members of his own party.

Is a bargain -- grand or otherwise -- possible? For a more optimistic take, I talked with David Dreier, the moderate conservative Republican who represented part of Los Angeles County in the House for 32 years until his retirement last week.

“There’s a chance,” Dreier told me. “Obama has recognized the need for entitlement reform…. If he’s thinking about a long-term legacy, entitlement reform would be a place to start.”

Paradoxically, Dreier said, trimming future spending from Social Security and Medicare -- long considered the “third rails” of American politics -- is possible only in a period of divided government.

“If Mitt Romney had won the presidential election, Republicans would be scared to death of entitlement reform,” he said. “It would be far too risky…. But if Obama and the Democrats are willing to step up to the plate, they’ll find willing partners on the other side.”

It won’t be easy, Dreier acknowledged. A deal that trims entitlement spending would divide both Democrats and Republicans. “Anybody who claims to know how this will play out is crazy,” he said. But he made one easy, reliable prediction: “We’ll go right up to the edge.”

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