Glimmer of Hope for a Deal on Debt Ceiling
Policy + Politics

Glimmer of Hope for a Deal on Debt Ceiling

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There was a glimmer of hope on Saturday that there may be a way out of the debt ceiling mess. After  weeks  of political wrangling and posturing, Senate Minority Leader Mitch McConnell, R-Ky., spoke with President Obama and Vice President Joseph Biden Saturday afternoon and then reported progress toward a bipartisan deal that would avert the first default on U.S. debt in history.

Standing shoulder to shoulder with House Speaker John Boehner, R-Ohio, at the Capitol, McConnell declared that “Our country is not going to default for the first time in history; that is not going to happen,” McConnell told reporters.  “We now have a level of seriousness, with the right people at the table, that we needed.” 

“In spite of our differences I think we are dealing with reasonable, responsible people who want this crisis to end as quickly as possible and I’m confident we will,” Boehner  added.

Whether Republican and Democratic congressional leaders and the White House can forge a bipartisan agreement within the next day or two remains to be seen.  The biggest stumbling block appears to be a dispute over whether the deal  should extend the Treasury’s borrowing authority through the 2012 election, as Obama insists, or require a second vote next year to make sure Congress and the White House are meeting goals for slashing long-term  spending.

Moreover, House conservatives are demanding congressional approval of a Balanced Budget Amendment as a condition of raising the debt ceiling next year – a deal breaker as far as the Democrats are concerned.

Senate Majority Leader Harry Reid, D-Nev., reported no progress towards a deal after he and House Minority Leader Nancy Pelosi, D-Calif., conferred with the president and his aides at the White House. And as the evening wore on, Reid and McConnell bickered on the floor of the Senate over procedural matters, as the Senate moved toward a vote in the wee hours of Sunday morning on whether to proceed with action on Reid’s latest offer to the Republicans.

"The question is are we closer to an agreement, the answer is no,” Reid told reporters. The House voted earlier in the day to make it clear it would never go along with Reid’s plan, for $2.4 trillion of spending cuts over the coming decade -- including more than $1 trillion of disputed war savings – and extending the Treasury’s borrowing authority through 2012.

An even bigger  question, many agreed, was whether  Boehner would  risk his speakership by pushing a bipartisan compromise on the debt ceiling through the House before Tuesday’s deadline using substantial Democratic votes and less than a majority of his Republican troops. Twenty-two of the 240 House Republicans voted against Boehner’s own plan even after the speaker recast it to placate angry freshmen Republicans in his caucus. A bipartisan deal that makes major concessions to Obama would almost certainly trigger dozens of more defections.

Rep. Steve Womack, R-Ark., told MSNBC that Boehner  has done “a fantastic job of helping to guide our conference, sometimes as divided as it may be, through this whitewater,” and that “if we have to reach across the aisle at the eleventh hour to put something on the desk that can get a presidential signature, then we will evaluate that particular at the moment it’s crafted.”

However, University of Virginia political scientist Larry Sabato cautioned that “Unless he wants to be known as the Speaker who engineered a disastrous default, he’ll have no choice but to go to Pelosi and [Minority Whip Steny] Hoyer to round up some Democratic votes to compensate for the purist Tea Party caucus votes he is bound to lose in the next go-round,” said Larry Sabato, a University of Virginia political scientists.

Jim Manley, the former chief spokesman for Reid, said of Boehner: “It’s not fair to say he’s a  dead man walking now, but that [House Republican]  caucus could  very well turn on him,” said Jim Manley, former chief spokesman for Reid.

The House Republican approach would only grant the Treasury extended borrowing authority through the end of the year, by raising the debt ceiling by $900 billion, while cutting spending by $917 billion. Then a committee of lawmakers would have been assigned to find $1.8 trillion of additional cuts. If Congress approves those cuts – as well as passes a balanced budget amendment to the Constitution – the debt ceiling would be raised by enough to get the Treasury through the rest of the year. If not, Congress and the nation would be back in another debt crisis.

The requirement of passage of a Balanced Budget Amendment was added to Boehner’s bill at the insistence of rebellious conservatives and to finally smooth the way to a narrow passage on Friday, 218 to 210. “That’s a little extreme,” Reid said of the balanced budget amendment requirement, adding that the Democrats would go along with another vote on a balanced budget amendment but couldn’t guarantee an outcome.

With only three more days before the Treasury says it will hit its borrowing limits and will have to begin defaulting on some of the government’s massive obligations, there was far more partisan warfare than substantive negations between the two sides. At one point this evening, McConnell complained to Reid on the Senate floor that he had to interrupt another conversation with the vice president to take part in the charade of parliamentary maneuvering.  Still, Democratic and Republican leaders agree that a markets roiling default and likely downgrade in the U.S. Triple-A credit rating is unthinkable, and something is almost certain to emerge by Sunday or early Monday.

The key may be in devising a “trigger” or budget enforcement mechanism that would assure the agreed to reductions in the deficit would be implemented, even if Congress and the special committee couldn’t reach agreement on additional savings. Republicans are looking for assurances that those deep cuts would be made in government programs, including entitlements  such as Medicare and Medicaid. But Democrats are insisting that any trigger also include increases in tax revenues – a sticking point with the Republicans.

“If we answered the question of what to do about the trigger, we might be able to get through this,” said Sen. Richard Durbin, D-Ill. Senate Budget Chairman Kent Conrad, D-N.D., who also was a member of the Senate “Gang of Six” told reporters  that he was drafting legislation with Republicans for three separate trigger mechanisms, all of which could include revenue-generators along with cuts or introduce revenue generators in a deficit structure sometime in the future.

Rep. Chris Van Hollen, D-Md., ranking Democrat on the House Budget Committee, said that a bipartisan show of force will be the only way to get a compromise through the House, but that will mean Boehner and other House GoP leaders parting company with the Tea Party on this issue.

“It’s very clear that getting a responsible compromise will require the Speaker to reach across the aisle and start putting together a bipartisan coalition,” Van Hollen said. “It’s going to require ruffling some of the feathers of the Tea Party caucus from the Republican Party.”