It Was Eric Cantor Who Killed the Debt Ceiling Deal

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Everyone and his brother has already blogged about Ryan Lizza’s profile of Eric Cantor in the New Yorker this week, but it’s only just now that its real meaning has struck me. Maybe I’m just slow. The subject at hand is the debt ceiling talks in July 2011, and before we get to Lizza, here’s the basic timeline:

July 17: Cantor and John Boehner meet in the White House to talk with Tim Geithner about how a tax reform package could raise $800 billion as part of a “grand bargain” deficit reduction plan.

July 19: The Gang of Six in the Senate releases a bipartisan plan that includes over $1 trillion in tax increases.

July 20: Congressional Democrats start to revolt. They figure that if a bunch of Republicans can sign on to a plan with over $1 trillion in tax increases, why is Obama settling for only $800 billion?

July 21: Obama calls Boehner and asks him for $400 billion in additional revenue.

Lizza tells us what happened next:

As Obama waited by the phone for a response from the Speaker, Cantor struck. Cantor told me that it was a “fair assessment” that he talked Boehner out of accepting Obama’s deal. He said he told Boehner that it would be better, instead, to take the issues of taxes and spending to the voters and “have it out” with the Democrats in the election. Why give Obama an enormous political victory, and potentially help him win reëlection, when they might be able to negotiate a more favorable deal with a new Republican President? Boehner told Obama there was no deal. Instead of a Grand Bargain, Cantor and the House Republicans made a grand bet.

Here’s why this timeline is important. It’s been an article of faith among conservatives that the grand bargain collapsed because Obama got greedy and asked for more revenue. And there’s certainly a kernel of truth to that: a $1.2 trillion revenue increase was obviously a tougher lift for Boehner than an $800 billion increase.

But based on Cantor’s own testimony to Lizza, that wasn’t really what killed the deal. Regardless of the size of the revenue increase, Cantor just flatly didn’t want to reach an agreement. He didn’t want to give Obama a political win, and figured that a failed deal would hurt Obama enough that Republicans could win the presidency and then write their own bill. He persuaded Boehner to go along, and the deal was dead.

Bottom line: It wasn’t Obama’s $400 billion that killed the deal. It was Eric Cantor who killed the deal. We now have that straight from the horse’s mouth.

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We didn't know what to expect when we told you we needed to raise $400,000 before our fiscal year closed on June 30, and we're thrilled to report that our incredible community of readers contributed some $415,000 to help us keep charging as hard as we can during this crazy year.

You just sent an incredible message: that quality journalism doesn't have to answer to advertisers, billionaires, or hedge funds; that newsrooms can eke out an existence thanks primarily to the generosity of its readers. That's so powerful. Especially during what's been called a "media extinction event" when those looking to make a profit from the news pull back, the Mother Jones community steps in.

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