Washington on the cusp of debt deal
On the cusp of a deal… The substance that’s still unresolved: how you “trigger” entitlement and tax reform (or punish Congress for NOT doing it)… And what’s also unresolved: soothing the egos of the Democrats and Republicans who aren’t going to like the deal… Brooks vs. Krugman on the grand bargain… Senate to vote on “Cut, Cap, and Balance” at 10:00 am ET… Obama holds town hall at 11:00 am ET in College Park, MD to sell the grand bargain… Panetta and Joint Chiefs will certify that DADT is ready to be repealed… Staff changes at Huntsman HQ… Pawlenty’s new TV ad… And Rudy’s thinking about a presidential run and will decide by the end of summer.
By NBC's Chuck Todd, Mark Murray, and Brooke Brower
*** On the cusp: The Obama White House and House Speaker John Boehner are now thisclose to reaching a “grand bargain” deal. That framework includes spending cuts, plus entitlement changes and increased tax revenues (as part of a tax overhaul) that would come later. But there are two big hurdles left: 1) on the substance, and 2) on soothing egos. On the substance, the most contentious matter is how you “trigger” the provisions to guarantee completing tax and entitlement reform. The Democrats have offered a trigger of letting the Bush tax cuts expire for those making $250,000 or more. Republicans, meanwhile, have countered that if those Bush tax cuts are hanging in the balance, they’d offer a trigger of their own to ensure Dem action: scaling back Obama’s health-care law and eliminating the mandate. Bottom line: If entitlement and tax reform is completed on time, then the Bush tax cuts and the health-care law don’t get touched. Also on the substance front, we’re hearing that there’s yet to be an agreement on the scope of the entitlement changes. And never mind the actual individual cuts on the discretionary side. Details, details. The K Street Army is gathering forces if this deal goes through because we haven't seen this much change in the way government spends and gathers money in a generation.

*** On substance and egos: And that brings us to soothing egos. There would be two winners if this deal gets reached: President Obama and John Boehner. Obama gets his deal, avoids default, and advances his brand -- as the Washington Post's Fixers write -- of being able to bring people together when others have failed. Boehner gets his deal too, accomplishes something historic, and provides some stability for his House majority. But here’s the deal: No one else wins. Not Nancy Pelosi and the House Democrats who want to take back that chamber. Ditto Mitch McConnell and Senate Republicans. So the next couple of days are all about soothing egos and convincing folks that it’s either this deal or nothing. By the way, one way Republicans are selling this to their rank-and-file, unlike previous "grand bargains" (think 1982 or 1990 or 1995) is this one has cuts up front. The best Democratic sales pitch is the Bush tax cuts aspect.