The raging debate over what it will cost President Barack Obama to get an increase in the debt ceiling took a stunning turn Tuesday when Senate Republican Leader Mitch McConnell blinked.
Up to now the debate has largely been between congressional Republicans—led by House Speaker John Boehner—who have taken the firm position that the solution to the debt ceiling crisis will largely be found in spending cuts, not new revenues—and the president. For his part Obama, as he made clear in his Monday press availability, is committed to cutting entitlements—but only if they have the political “pay for” of higher taxes on the wealthiest Americans and corporations.
Enter McConnell, who has proposed a three-part solution that he apparently believes would shift all the blame for increasing the debt ceiling to the Obama and the Democrats in Congress.
According to National Review’s Rich Lowry, the McConnell Plan would “authorize the President to submit a request to Congress asking to increase the debt limit by $700 billion, and would require submission of a plan to reduce spending by a greater amount.”
“Upon receipt of the President’s request, the debt limit would be provisionally increased by $100 billion to provide breathing room and avert an August 2nd default,” with the House and Senate having 15 days to disapprove of the request, Lowry wrote based on an outline attributed to McConnell’s office.It’s a complicated plan, involving resolutions of disapproval and other parliamentary maneuvers.
If either chamber defeats the resolution (of disapproval), the remaining $600 billion increase would be allowed. If both chambers pass the resolution, it would be sent to the President for a veto or signature. If vetoed, debate on an override would be limited to one hour. If the veto is overridden (which would require a 2/3 vote) in both chambers, then the request would be denied and the provisional $100 billion increase revoked.”
If the veto is sustained in either chamber, the remaining $600 billion increase would be allowed.
For the second and third requests in fall 2011 and summer 2012, the President could request an increase of the debt limit by $900 billion once the Treasury Department determines that the country is within $100 billion of the debt limit. The president would also be required to submit a plan to reduce spending by a greater amount. Each of these subsequent requests would be subject to the same disapproval process outlined above.
McConnell’s proposal hit the debate like ants at a picnic; especially among the groups supporting the “Cut, Cap, and Balance” approach to the problem.
“I am sincerely disappointed that Senator Mitch McConnell did not wait for the process to work,” said Concerned Women for America’s Penny Nance. “The last thing Washington needs is an unlimited credit line when we can’t even pay the debt we currently owe. The only sensible policy is to cut and cap spending and balance the budget. Those are the only options that our leaders should be discussing.”
James Valvo, director of government affairs for the Tea Party-oriented group Americans for Prosperity, said his group “is opposed to any deal that abdicates Congress’s constitutional responsibility to authorize any debt it wants the country to issue. Reversing the incentives in order to shield senators and representatives from politically tough decisions is a non-starter.”
Colin Hanna, president of Let Freedom Ring! (where I am a senior fellow) and who has been at the forefront of the effort in support of cut, cap, and balance, criticized the McConnell approach, saying, “Instead of pushing the Obama administration to make significant immediate cuts, cap federal spending as a proportion of our economy, and pass a balanced budget amendment, the proposed three-stage mechanism is exactly the sort of Washington deal that the public distrusts. Furthermore, it fails to achieve the permanent reform that we so desperately need to avert an endless series of fiscal crises. The recently proposed Cut Cap and Balance Act, by comparison, would force the short term, medium term, and long-term reforms that can bring us back to fiscal sanity.”
Over the next 24 hours we will know if McConnell’s proposal is a real idea or a trial balloon. Based on the way people are shooting at it, however, it’s not likely to last long.