As the deadline to raise the country's $14.3 trillion debt ceiling quickly approaches, hopes of a "grand bargain" between Democrats and Republicans broke down over the weekend.
The "grand bargain" would have included a balanced approach to cutting U.S. debt by $4 trillion over the next 10 year via spending cuts, closing tax loopholes, entitlement reforms and tax increases.
But that last bit -- tax hikes — remains off-limits and essentially a deal-breaker for the Republican caucus as Speaker of the House, John Boehner, clearly stated in this statement released Saturday:
"Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase."
The package under negotiation during the Biden talks involves just $2 trillion in cuts, which would likely sustain the country's spending habits through November 2012.
Despite Republicans reluctance to agree to any deal that would raise revenues, Treasury Secretary Timothy Geithner told NBC's David Gregory on Meet the Press that President Obama would continue "try to get the biggest deal possible" on the deficit - a view the President reiterated Monday morning during his latest press briefing on the issue.
Regardless of the shape and size of the final deal, David Walker, CEO of Comeback America Initiative and former U.S. Comptroller General, firmly believes the debt ceiling will be raised by the August 2 deadline. But whatever the outcome he hopes that it takes the country through the 2012 election. (See: What If? "Huge Interest Rate Risk" If No Deal on Debt Ceiling, David Walker Says)
"We don't want to be dealing with this during an election year," he tells Aaron in the accompanying clip. "But frankly what we need to do is have some sort of citizen engagement and education campaign that is a supplemental to the typical political campaign so that people understand the facts, the truth and the tough choices that are going to have to be made irrespective of what happens in the election."
That is where Walker's Comeback America Initiative comes in. Later this month, his organization will release a framework that showcases how he claims the government can cut nearly $3 trillion from spending over the next ten years WITHOUT raising taxes or gutting the social safety net.
Sound impossible? See the accompanying video where Walker gives The Daily Ticker a sneak preview of the CAI plan, which includes defense cuts and means testing for Medicare.