McConnell’s last ditch debt ceiling plan: What’s in it for Republicans?

In a surprise move, Senate Republican leader Mitch McConnell on Tuesday proposed a “last choice option” to avoid default on the national debt that would require the support of just over a third of the House and Senate to raise the national debt ceiling.

The McConnell proposal, which requires special legislation to be adopted, gives the president expedited procedures to increase the debt limit by as much as $2.4 trillion that require only submission of a plan to reduce spending by a greater amount. There is no requirement that Congress actually pass those spending cuts.

Sen. Mitch McConnell
REUTERS/Jim Young
Sen. Mitch McConnell

But even if the cuts are never passed, the proposal has two political advantages for Republicans: It forces President Obama to lay out his proposed spending cuts in writing, a longtime GOP demand. And it absolves Republicans of responsibility for sending the nation into its first-ever default, as early as Aug. 2.

In exchange, Republicans give up all leverage on spending – riling many conservatives who elected a new GOP House majority to make tough decisions on spending, and diminishing Congress’s constitutional power of the purse.

Senate majority leader Harry Reid (D) Nevada said at a press conference that he did not know much about the plan, but stated: “I am not about to trash his proposal. It’s something that I will look at.”

“It’s an admission by Mitch McConnell that the votes won’t be there on the GOP side to do anything. They’re looking for a way out,” says Stan Collender, a longtime congressional budget analyst and partner at Qorvis Communications in Washington. “It puts the onus for raising the debt limit directly on President Obama.”

With both sides in deeply entrenched positions – Republicans refusing tax increases and Democrats refusing deep spending or entitlement cuts without them – default on the national debt is an outcome that some congressional leaders are taking more seriously.

Sen. Pat Toomey (R) of Pennsylvania proposed legislation requiring the Obama administration to come up with contingency plans to prioritize payments to avoid default after Aug. 2. Treasury Secretary Timothy Geithner has proposed invoking an obscure clause in Article 14 of the Constitution to give the president unilateral authority to raise the debt limit.

McConnell’s proposed legislative mechanism gives the House and Senate the option to defeat the proposed increase in the debt ceiling with a joint resolution disapproving of the president’s request that has little chance of success.

Either the resolution fails in either chamber – most likely in the Democrat-controlled Senate – in which case the debt limit increase goes forward. Or, the president vetoes the disapproving resolution, requiring a two-thirds supermajority to override the veto. In other words, it would take only 33 senators and 146 House members to sustain the presidential veto and increase the debt limit.

So, why is the House minority leader making it easy for President Obama to get a $2.4 trillion increase in the national debt limit?

McConnell says the aim is to take the unthinkable prospect of national default in the next three weeks off the table.

“We have become increasingly pessimistic that we will be able to reach an agreement with the only person in America who can sign something into law, and that’s the president of the United States,” he told reporters at a press briefing on Tuesday.

“What we are not going to be a party to in the Senate, I’m pretty confident, is default,” he added.

Conservative critics say it’s a way for Republicans to avoid taking responsibility for two unthinkable votes – either raising taxes or forcing the nation into default.

“It’s a classic game of chicken, and the Republicans say we’re willing to resolve this in an orderly way and here’s the formulaic mechanism we want to set in place,” says Michael Franc, who heads the Heritage Foundation’s outreach to members of Congress.

“President Obama can propose a debt increase with smoke-and-mirrors spending cuts, and fiscal conservatives don’t get spending cuts anywhere,” says Chris Edward, director of the tax policy studies at the CATO Institute, a libertarian think tank.

“What the Republicans should have done months ago was have reasonable cuts, pass them through the House and say: ‘This is what we want, and we’re not budging,’ ” he adds.

But Americans for Tax Reform (ATR), an anti-tax group, held off criticism on the grounds that the plan at least forces the White House to publish something like a plan to cut spending.

“The president has been allowed to promote imaginary spending cuts to which he would accede in order to get Republicans to agree to tax hikes,” said ATR president Grover Norquist, in a statement. “Republicans didn’t bite. But President Obama, up until today, didn’t have to disclose what imaginary spending cuts he was so reasonably prepared to accept.”

The plan also requires the president to make three separate requests for the full $2.4 trillion increase in the debt limit that he has been requesting. That’s three big votes before the 2012 elections – votes Republicans expect will focus voter attention on big government and run to their advantage.

To enact McConnell’s proposal, Congress must first pass a law that authorizes the president to submit a request asking for $2.4 trillion increase in the debt limit in three stages, with an initial request for $700 billion.

“One of the ways to deal with the budget is to deal with the budget process instead,” Mr. Collender says. “This is a bit of a throwback. It was inevitable that they would try to come up with some procedural gimmick.”

Comments (2)

  1. Submitted by Steve Titterud on 07/13/2011 - 01:49 pm.

    I don’t see how anyone can mistake this hand-washing by Republicans as anything but a failure of their caucus.

    I see a lot of positives for Obama in McConnell’s proposal.

    If this idea actually bears fruit, I think in the end Obama will come out of it as the responsible party – the one who, in a city of eunuchs, had the cojones to act to avoid a systemic disaster, and the one who proposed the reasonable kinds of cuts the nation can easily tolerate.

    As far as candidates for those cuts, there are an enormous number of tax expenditures – the pet exemptions, grants, and credits which are the entries in the Congress’ checkbook register. This is the time-honored and favored way to pay off campaign contributors and future employers – and virtually always, it is vastly in excess of anything they gave. If you’re an industry or large corporation, you can’t get this kind of ROI anywhere else.

    Then there’s the military budget, a monstrous fraud whose resources are deployed in such a manner as to harm our national interests. Start with a false causus belli for the war in Iraq, continue to this day by supporting corrupt puppet governments in Iraq and Afghanistan. And for what? What are we actually getting out of these escapades?

    For an interesting comparison, add up the costs of these wars over the years and compare that number with our national debt.

    Then there is the “security” budget (across departments), whose costs even our top officials have admitted they do not know, so cloaked in secrecy are they.

    Another set of good candidates are the enormous agricultural subsidies. Very little of those monies go to anyone you could call a farmer.

    If McConnell’s plan becomes reality, the President will have a LOT to choose from when it comes to cutting things we can do without.

  2. Submitted by Bernice Vetsch on 07/13/2011 - 03:31 pm.

    Okay by me if the president takes the entire amount out of the so-called “defense” budget.

    I learned this morning (John Nichols of The Nation on Democracy Now) that the CIA is operating one or more secret prisons in Somalia to which SUSPECTED terrorists from other North African locations are renditioned. Most of them have not been charged with any crime; none have been released. We do all this to fight the Worldwide War on Terror, but do nothing to ease the starvation of thousands of Somali refugees.

    This is just one example of CIA dirty tricks that will do nothing but increase now that General Petraeus is its head (he told the Senate Intel Committee that there are times “humane” interrogation methods are just not sufficient; the senators lapped it up with fulsome compliments one after another).

    The Pentagon’s anti-missile shield in eastern Europe is another waste of our precious resources. Russia thinks it’s aimed at them; others believe it’s to satisfy the paranoia of those who believe Iran is getting ready to nuke us and/or Israel.

    Then there are our drones in Afghanistan and Pakistan and the resentment they cause among those whose innocent friends and family members are killed as collateral damage.

    A few trillion from this budget ought to be easy to find.

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