Boehner Ups The Ante

Yesterday, House Speaker John Boehner (R-OH) ended his weekly news conference with:

If the House and Senate can’t reach agreement on — on the CR by March 4th, would you be willing to entertain a short-term CR at current levels?

We’re going to do everything that we can to cut spending. We’re hopeful that the Senate will take up the House-passed bill that comes out of here today, tonight, tomorrow morning, whenever it is. But we hope that they will move it.

But our goal here is to cut spending. But I am not going to move any kind of short-term CR at current levels. When we — when we say we’re going to cut spending, read my lips. We’re going to cut spending.

Thank you.

I’m surprised he used “read my lips,” because that’s what President George H.W. Bush said to the Republican National Convention two years before cutting a deal to go back on his pledge not to raise taxes.

Boehner saw at first hand how the Republicans suffered following the 1995/1996 government shutdowns, and I expect him to avoid a repeat if he can. However, he’s got 87 freshman Republicans who are clamoring for massive federal spending cuts. Whether he can bridge that gap is unclear. I read his remarks as asking President Obama for a meeting to explore some spending cut agreement that would look like a victory to his Republicans, but which wouldn’t be too drastic for most Democrats to swallow. I don’t expect a grand budget deal for long-term deficit reduction. I’m looking for $30 b. of cuts this year that will keep the government from being shut down. If there’s no deal, I expect a series of short-term CRs and debt limit increases.

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About Pete Davis 99 Articles

Affiliation: Davis Capital Investment Ideas

Pete Davis advises Wall Street money managers on Washington policy developments that affect the financial markets. President of his own consulting firm since 1992, Davis Capital Investment Ideas, he draws on 11 years of experience as a Capitol Hill economist with the Joint Committee on Taxation (1974-1981), the Senate Budget Committee (1981-1983), and Senator Robert C. Byrd (1992). He worked in the House and Senate, and for Republicans and Democrats.

Davis brought the first computer policy model, the Treasury Individual Income Tax Model, to Capitol Hill in early 1974, when he became a revenue estimator on the Joint Committee on Taxation. He formulated the 1975 rebate, the earned income tax credit, the 1976 estate tax rates, the 1978 marginal tax rates, and the Roth-Kemp tax cut. He left Capitol Hill in 1983 for the Washington Research Office of Prudential-Bache Securities, where he advised investors for seven years.

Davis has long written a newsletter on the Washington-Wall Street connection for his clients; Capital Gains and Games is his first foray into the blogosphere.

Visit: Capital Gains and Games

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