Can’t argue with the Republican approach

“In a speech before a Wall Street crowd on Monday, John Boehner laid out the three legs of the GOP's opening bid on the debt ceiling. They are:

1) "Without significant spending cuts and reforms to reduce our debt, there will be no debt limit increase. And the cuts should be greater than the accompanying increase in debt authority the president is given. We should be talking about cuts of trillions, not just billions."

2) "They should be actual cuts and program reforms, not broad deficit or debt targets that punt the tough questions to the future."

3) "With the exception of tax hikes -- which will destroy jobs -- everything is on the table. That includes honest conversations about how best to preserve Medicare."

So at least $2 trillion in cuts, no tax hikes -- though it's unclear whether taking "tax hikes" off the table leaves room for cuts in tax expenditures that raise revenue while lowering rates -- and no recourse to debt triggers or other procedural mechanisms. In a subsequent interview with the Washington Post, Boehner's "aides declined to say over what period the cuts would have to take effect, saying only that they could be achieved on a time frame longer than the life of the debt-limit increase."

Boehner's got a big number, but it's not, over time, an impossible number. All of the major long-term budgets cut and raise more than $2 trillion over the next 10 years, so Boehner's demands, though impressive in the abstract, are actually in the center of deficit-reduction consensus. What's more questionable is his timetable. It's very unlikely that Congress will be able to cut a multi-trillion dollar deal on deficit reduction before early-August, when the Treasury runs out of financial gimmicks to delay a default. And if Boehner and the Republicans won't accept fiscal rules as a downpayment on deficit reduction, that leaves us with few options save for a series of hard-to-negotiate, short-term increases in the debt ceiling -- which is to say, an extremely extended period of uncertainty for the market.”