CQ TODAY ONLINE NEWS
July 12, 2011 – 10:36 p.m.
Muted Reaction to McConnell Plan
By Joseph J. Schatz, CQ Staff
A Senate Republican gambit to resolve the debt limit deadlock drew relatively subdued criticism from the right wing, even though it would cede significant power to the White House and effectively abandon GOP hopes for guaranteed spending cuts.
And although the “contingency” plan offered by Senate Minority Leader
Senate leaders characterized the plan as a last ditch effort to stave off a default on the nation’s debt, which could come as soon as Aug. 2 if the $14.3 trillion debt ceiling is not raised.
Given the upcoming deadline, and the stalemate over taxes and entitlements in any larger deal, McConnell, R-Ky., opted for an audacious move that, so far, has not been rejected outright by top leaders.
The plan would require lawmakers to take as many as six votes on increasing the debt limit over the next year and a half, ostensibly putting the issue on the backs of Democrats each time. But for Obama, who has sought to stake out the political middle ground in the debate, it also would virtually ensure that the government’s borrowing needs are satisfied through 2012 while avoiding a calamitous debt showdown with Congress.
And while it would force the president to lay out plans for significant spending cuts — a key goal of many Republicans — it would not require enactment of any spending reductions. House and Senate Republicans had thus far been demanding that the size of any debt ceiling increase be matched by equally large spending cuts.
As a result, the plan is likely to encounter significant resistance among many House Republicans, though House GOP leaders remained quiet on the McConnell plan Tuesday evening. Whether it represents the key to an increase in the debt limit remained unclear.
McConnell presented the plan at Tuesday’s White House meeting between Obama and the top congressional leaders, the third such session in three days. The plan was “not rejected,” a Senate Democratic aide said, adding, “It was set aside as a possible fall-back plan.”
Michael Steel, a spokesman for House Speaker
“The Speaker shares the leader’s frustration,” Steel said. “Republicans are unified in our commitment to ensuring that the debt limit is not used as leverage to saddle small businesses with increased taxes that destroy jobs.”
Under the proposal, Congress would vote to set up a process by which the administration would seek a debt limit increase three times over the next year and a half. Along with each request for additional borrowing authority, the Obama administration would submit a corresponding set of budget cuts.
Congress could move to block the debt limit requests with a resolution of disapproval. But Obama would almost certainly veto such a resolution in order to prevent a default. At that point, Republicans could move to override the presidential veto, although doing so would require a two-thirds majority in both chambers.
Muted Reaction to McConnell Plan
Under the plan, lawmakers could conceivably vote six times on raising the limit before the 2012 elections: once on each resolution of disapproval and once on each veto override.
Congress would also have to separately act on the accompanying budget cuts. A GOP source said that even with this plan, senators would still want an opportunity to vote on a balanced-budget constitutional amendment and other budgetary changes next week to make clear they were not “going down without a fight.”
“They understand why it might be necessary,” a Senate GOP aide said of the Obama administration after the meeting.
Senate Majority Leader
“I’m not about to trash his proposal; it’s something that I will look at,” Reid said. “I will look at it intently, and I think any new ideas, I’m willing to look at.”
With Treasury Secretary
“It’s a political response,” Sen.
With less than three weeks to go, however, Senate Republicans are casting the plan as a last-ditch effort and making it clear that they are unwilling to risk a default — or to appear to be risking a default — over a budget battle that is primarily between Obama and House Republicans.
Those negotiations continue to stall. While Obama and leaders have discussed a series of spending cuts identified by negotiators in May and June, totaling more than $1.7 trillion, congressional Democrats have warned that the package will not win their support.
It seems clear from the plan that Senate Republicans are willing to give up some power in order to prevent a default. “What we’re not going to be a party to in the Senate is a default,” McConnell said. “If we’re unable to come together, we think it’s extremely important that the country reassure the markets that default is not an option, and reassure Social Security recipients and families of military veterans that default is not an option.”
“This is, again, not my first choice,” McConnell said.
Mixed GOP Reactions
Republicans seemed split on the idea.
Muted Reaction to McConnell Plan
“I think it’s an idea definitely worth exploring,” said Sen.
The bigger question is whether House Republicans, who have driven the spending debate this year, buy into the plan.
House leaders were reluctant to say much. An aide to Majority Leader
“I haven’t really studied it,” added
Some Republicans expressed skepticism that House conservatives, many of whom have entrenched themselves in support of immediate spending cuts, would back a plan that did not force funding reductions.
“There seems to be a very canny political side to this” in forcing the president to repeatedly request more debt limit authority in an election year,” said one House Republican aide. “I’m not so sure it can survive the sort of major policy reaction of multiple increases without any real guarantee of cuts. It may be too much for members to swallow and swallow quickly.”
The conservative Heritage Action for America group criticized the plan, saying it would give up Republicans’ political leverage. “To date, Republicans in Congress have been expressing their intent to use the debt ceiling as a means to secure systemic reforms that could save our country from fiscal collapse,” the group’s CEO, Dan Needham, said in a statement. “The plan that we are reading reports about today is a serious walk back from that position and would seemingly trade the leverage needed to achieve reforms in return for political gains.”
Paul M. Krawzak and Brian Friel contributed to this story.