The administration believes the composition of deficit savings included in the tax deal to pay for a two-month delay in the automatic spending cuts sets the template for any future deal, according to a White House official, who requested anonymity. The $24 billion in savings was split evenly between new revenue and spending reductions, half of which came from defense.
The U.S. reached its $16.4 trillion legal debt limit on Dec. 31, and the Treasury Department began using extraordinary measures to finance the government. It will exhaust that avenue as early as mid-February, the Congressional Budget Office says.
Negotiations over raising the limit will play out in a bitter political climate. Some Republicans complain that Obama’s insistence on increasing tax rates for the wealthy rather than reverting to a more flexible position he took in 2011 amounts to using his re-election victory to bully them.
Several also grumbled about a campaign-style event the president hosted at the White House on Dec. 31 criticizing Republicans during a delicate moment of the tax talks.
“I just listened to the president, and my heart’s still pounding,” Sen. Bob Corker, R-Tenn., said on the Senate floor. “I am very disappointed to hear what the president just had to say in front of a pep rally, something very unbecoming of where we are at this moment.”
Emotions ran so high during the latest round of talks that at one point Boehner told Senate Majority Leader Harry Reid, D-Nev., to “Go F--- Yourself,” according to two people familiar with the conversation, which took place just steps from the Oval Office.
Frustration also boiled over as House Republicans left a conference meeting on Jan. 1 at which they were presented with the deal the party’s Senate leaders negotiated with the White House. “On Nov. 6,” the day Obama was re-elected, “the American people made a serious mistake,” Rep. Trent Franks, R-Ariz., said in an interview.