Yesterday House Speaker John Boehner said he wanted a working debt plan before the markets open tomorrow, but perhaps that was just a teensy bit too ambitious. Or maybe, as seems to be the case of late, he was prepared to find a passable (that is, through Congress) compromise but his caucus simply wasn't. Reuters now reports that Boehner is backtracking and arguing that there will have to be a two-stage process. An interesting strategy considering that President Obama, Senate Majority Leader Harry Reid, and House Minority Leader Nancy Pelosi just yesterday reaffirmed their position that a stop-gap solution is, well, not a solution. Treasury Secretary Timothy Geithner, not particularly visible in the debt talks to date, may present the last remaining compromise on this question. Speaking to the Washington Post today, he said that "there's nothing wrong with doing this in stages." Just that the first stage would have to include a vote to raise the debt ceiling beyond just the next several months, while thornier debt-and-deficit-reduction plans (such as the Gang of Six's much-lauded proposal) could be tackled in a later phase.
Geithner on CNN's State of the Union:
Inevitably, we’re going to do this in two stages. We’ll lock savings we’ve agreed to. And then there will be a second stage, where Congress is forced to identify and agree on a set of other reforms — tax reform that raises revenue and entitlement reform to make sure we put that on sustainable footing. But the key question is what happens at the end of that first stage.
That may still be a tough sell for freshmen Republicans, who are either against raising the debt ceiling full stop or want to see it used as a leveraging stick to gain huge spending concessions from the White House. In all frankness to those junior members of the House, you've been holding that negotiating chip in your hands for over a month now. And with the August 2 deadline but a week away, looks like it's time to make a final play or risk losing the whole pot.