Republican would let Obama raise limit

McConnell sets out ‘last-choice option’

By Jackie Calmes
New York Times / July 13, 2011

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WASHINGTON - From the White House and Congress to financial centers, pessimism spread yesterday about the prospects of a debt-limit deal between President Obama and Republicans, prompting the Senate Republican leader to propose a “last-choice option’’ that piqued the administration’s interest but angered conservatives in his own party.

The leader, Senator Mitch McConnell of Kentucky, said a bipartisan budget-cutting deal is probably out of reach, making it unlikely that Republicans would approve an increase in the government’s debt limit by Aug. 2.

To prevent default, he proposed that Congress in effect empower Obama to raise the government’s borrowing limit without its prior approval of offsetting cuts in spending.

Administration officials welcomed the McConnell initiative for at least signaling that both parties’ leaders were committed to averting a potential economy-shaking government default; many Democrats in Congress saw it as a way to avoid the sort of deep cuts in Medicare, Medicaid, and Social Security that Republicans have sought as the price of their votes for a debt-limit increase.

But many conservatives immediately assailed McConnell’s proposal as a panicky sellout, much as they in recent days had attacked the House Republican leader, Speaker John A. Boehner, for privately discussing with Obama a debt-reduction deal that could raise revenues as well as cut spending - ultimately forcing Boehner to retreat.

Boehner, though, suggested he could be open to the McConnell proposal, highlighting concern among the Republican leadership about how the showdown with the administration would end, the blame the party could suffer if a debt-limit crisis hurt the economy, and the challenge of leading their rank and file into a compromise.

Boehner, in an interview on Fox News, said, “I think everybody believes there needs to be a backup plan if we are unable to come to an agreement, and frankly I think Mitch has done good work.’’

Yet Boehner also acknowledged the limits of his own leadership given the passions of conservatives on the issue. “I don’t think such a proposal could pass the House in any way, shape or form,’’ Boehner said. “You have a number of members who will never vote to raise the debt ceiling and a large block of members who believe this really is the moment to put our fiscal house in order.’’

McConnell made his proposal after days in which Obama has been on the offensive in the battle over the budget, calling for more deficit reduction than Republicans are at this point and urging both parties to put ideology aside in favor of compromise. While McConnell’s plan would face an array of political and perhaps constitutional issues, it signaled that Republican leaders did not intend to let conservative demands for deep spending cuts provoke a possible financial crisis and saddle the party with a reputation for irresponsible intransigence.

And with prospects for a broad budget deal having dimmed, McConnell’s plan would shift both substantive and political responsibility onto Obama, forcing him to take almost sole ownership of a debt-limit increase and any consequences from not doing more to address the budget deficit.

The longtime conservative activist Brent Bozell encouraged followers online to call McConnell’s office because he had “betrayed the trust of the American people.’’

And Newt Gingrich, a Republican presidential candidate, tweeted, “McConnell’s plan is an irresponsible surrender to big government, big deficits, and continued overspending. I oppose it.’’

“Senator McConnell’s proposal today reaffirmed what leaders of both parties have stated clearly, that defaulting on America’s past due bills is not an option,’’ Jay Carney, the White House press secretary, said in a statement. “The president continues to believe that our focus must remain on seizing this unique opportunity to come to agreement on significant, balanced deficit reduction.’’

The latest White House meeting of nearly two hours yesterday afternoon ended with both sides agreeing to return today and further seek up to $2 trillion in debt reductions.

But the two parties remain far apart on Obama’s demand that a quarter of the package come from higher taxes on the wealthy and businesses.

With the deadline for raising the government’s $14.3 trillion debt limit just three weeks away, yesterday seemed a new low in the weeks of maneuvering and negotiations between the White House and Republicans.

McConnell, who after Republicans’ gains in the midterm elections last November said that their goal would be to make Obama a one-term president, said in a morning speech in the Senate, “After years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is probably unattainable.’’

Obama stoked Republicans’ political concerns when, in answer to a question in an interview with CBS News, he said he “cannot guarantee’’ the government can pay benefits next month to Social Security recipients, veterans, and the disabled if Congress does not increase the debt limit by August.

McConnell’s proposal would give Obama sweeping power to increase the government’s borrowing authority, in three increments, by up to $2.4 trillion - enough, it is estimated, to cover federal obligations through next year - only if Obama specifies spending cuts of equal amounts.

Congress would vote on whether to approve Obama’s debt-limit increases, but the president could veto any disapproval and presumably sustain his veto in the House and Senate. And Congress would not have to approve the proposed spending cuts prior to the debt-limit increase.