Boehner's plan steps back from prior offers to allow an $800B increase in revenues. | Niko Duffy/POLITICO Debt chess match in Congress

Congress moved toward showdown votes this week on the debt crisis — possibly as early as Wednesday — even as President Barack Obama and Speaker John Boehner squared off on national television Monday night in what’s become Washington’s high-stakes political gamble with default — only seven days away.

Late Monday, House Republicans filed a 57-page bill setting out a two-step plan to raise the debt ceiling by $2.5 trillion, but first requiring that Obama be penalized with much deeper spending cuts than Boehner and the president were near agreement on only last week.


Across the Capitol, in this game of chess, Senate Majority Leader Harry Reid filed his own alternative $2.7 trillion package intended as a buffer of sorts between the president and Boehner, if the speaker’s bill should pass the House. But the real drama remains between Obama and Boehner directly, a raw replay of their April government shutdown fight — only now affecting not just federal agencies but the entire U.S. economy.

Speaking from the East Room, Obama went directly at Boehner’s Republican conference, saying that Americans were “fed up with a town where compromise has become a dirty word” and if he gives in now to the GOP’s bill, he will only be back facing the same early next year.

“Once again the economy will be held captive until they get their way,” Obama said of Boehner’s caucus. “It’s a dangerous game that we’ve never played before and we can’t afford to play it now. …We can’t allow the American people to become collateral damage to Washington’s political warfare.”

Boehner answered in what was a forceful speech for the Ohio Republican, casting himself as the former small businessman who still believes that “the bigger the government, the smaller the people.”

“The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today.” Boehner said. “That is just not going to happen.”

If anything, it’s become more personal for the two men, who twice tried to forge a larger debt deal and now seem caught in a contest of who can push the other farther into a corner.

If Boehner’s bill were to get through Congress, it would be crippling blow for the president. And after all the warnings of this crisis coming as long ago as last winter, it is one of the great riddles about Obama, a man so smart but still timid strategically, his critics say, when it comes to dealing with Congress.

Indeed there was an almost taunting tone to Boehner’s remarks at times. As if ignoring what they had negotiated — Obama agreeing to raise the eligibility age for Medicare to 67— Boehner dismissed the president as “adamant that we cannot make fundamental changes in our entitlement programs."

And the budget decisions now, Boehner said, should be made based on “how they will affect people who are struggling to get a job, not how they affect some politician’s chances of getting reelected.”

At the same time, the speaker has put himself at the mercy of his right wing by designing a bill that writes off most House Democrats to get at the president.

If these conservatives now defect — and some already were doing so Monday — Boehner risks real embarrassment when the measure comes to a vote, possibly as early as Wednesday.

“Might we lose one? I don’t know,” Minority Leader Nancy Pelosi said of the Boehner plan. “In our caucus, there’s overwhelming opposition.”

In his latest proposal, the speaker steps back from his prior offers to Obama to allow an $800 billion increase in revenues as part of tax reform. And his new spending cuts appear to be at least $600 billion more when compared with the White House talks — a huge hole for Obama to try to fill in return for avoiding another default fight seven months from now.

The Boehner bill anticipates two installments on raising the debt. The first — valued at $900 billion to $1 trillion — is contingent on 10-year savings of $1.2 trillion from annual appropriations bills. The second installment of up to $1.6 trillion could not be debated until Congress has enacted an additional $1.8 trillion in savings, expected to come largely from government benefit programs and entitlements such as Medicare and Medicaid.

This breakdown matches the basic framework Boehner discussed with Obama but in each case leans toward demanding more savings. There’s some irony here in that the speaker complained last week that Obama had moved the goal posts on $400 billion in revenues; now Boehner appears to be doing the same on cuts.

For example, the Boehner plan gives less credit than the White House and many Republicans in calculating the savings from proposed cuts in appropriations. This makes it harder in turn for lawmakers to clear the next hurdle, coming up with $1.8 trillion in savings for the second debt increase installment.

The $1.8 trillion target will be the responsibility of a newly constructed 12-member joint leadership committee charged with reporting back a package by Nov. 23, just before the Thanksgiving recess. The bipartisan panel, six Democrats and six Republicans, would have broad discretion but will almost surely focus first on significant savings from entitlement programs and government benefits already identified in the White House talks.

Down to last Friday’s collapse there were disparities in how each side saw the talks. The administration estimated the entitlement and benefit savings at almost $800 billion while Republicans hoped for $950 billion.

But even taking the higher GOP number and adding 20 percent for future interest savings, the net deficit reduction would be less than $1.2 trillion — or $600 billion under the higher goal set by the Boehner plan.

This difference should help Boehner in his pursuit of conservative votes, but the plan is not without risks. Having just voted for the even more stringent Cut, Cap and Balance bill last week, many Republicans were taking a wait-and-see approach to the new proposal. And in the case of 2012 appropriations, the Boehner bill represents a step back from even deeper spending cuts called for in the House Republican budget in April.

That resolution sets a cap of $1.019 trillion for discretionary spending in the new fiscal year that begins Oct.1, nearly $120 billion less than Obama’s budget. And even Monday, the House was in the midst of intense floor debate over a $27.5 billion natural resources bill that cuts $3.8 billion from administration requests, including wildlife and environmental agencies.

The new budget structure in the Boehner bill is expected to set a cap of $1.043 trillion for 2012 or nearly $24 billion higher than the April resolution. And that concession could potentially cost the speaker on the right, even as it helps him win Senate Republican votes he will need if he gets through the House.

In his speech last night, Boehner emphasized that he had worked with Reid himself on versions of the bill and predicted it will ultimately prevail. “If the President signs it, the ‘crisis’ atmosphere he has created will simply disappear,” Boehner said.

But for the White House, the Senate remains its great stone wall, and Obama is betting that he can command enough loyalty from Democrats that the Boehner bill will never get to his desk.

That would set up a situation in which the president and speaker can negotiate some compromise this weekend — when everyone’s back is up against default. And certainly Boehner’s added cuts have already raised the stakes for liberal senators who are demanding that some savings credit be given for winding down U.S. military operations in Iraq and Afghanistan.

This is a major reason that Reid has included large war savings in his alternative to Boehner and the Nevada Democrat is positioning himself to have a floor vote — after Boehner’s strength is first tested in the House.

If a compromise is to be reached between the two sides this week, much will depend on whether Boehner is willing to consider these savings as part of the joint committee’s future recommendations.

“To have a small group of extreme people drive the whole debate on the Republican side and then Democrats should give in, that makes no sense because it is terrible for the country,” said Sen. Chuck Schumer (D-N.Y.), appearing with Reid at a news conference. “Those 100 people do not represent America.”