T-minus about ten days 'til August 2

Updates from the deficit negotiation frying pan. Think cool thoughts!

President Obama appears to be cutting to the chase: he is negotiating only with House Republicans at this point, chiefly with Speaker of the House John Boehner. The latest plan floating around ("Grand Bargain 2.0") would raise the debt ceiling by August 2 and include $3 trillion in spending cuts over the next ten years. This proposal would kick at least one can down the road.  It alludes to a future federal tax code overhaul, with no details included, so would postpone any revenue increases until after the 2012 election. The President is clearly serious about striking a deal, because he is giving the Republicans pretty much everything they want. The Washington Post reported today that Senate Democrats are very unhappy with this proposal.

Optimism that a draft proposal from the Senate’s reconstituted "Gang of Six" might be a vehicle for the debt ceiling deal has been dashed.  Senate Budget Chairman Kent Conrad (D-ND) said there is not enough time for the Congressional Budget Office to score the plan and move it through the House and Senate.

The Senate earlier today rejected "Cut, Cap and Balance," (PDF, 176KB) on a party line, 51-46 procedural vote to pull the bill from the Senate floor.

As much as we at your Federal Budget Blog hope for a deal that maintains U.S. credit and bond ratings, and preserves the merest chance that the two parties will be able to work together cooperatively, we are not so optimistic that we are going to like any of these deals. Where there are deep spending cuts, scientific research is unlikely to be spared.  So, that's all we have to say about that, for now.