21 July 2011

McConnell-Reid Debt Ceiling Fail Safe Option Hanging By A Thread

WASHINGTON -- The fail-safe debt ceiling plan crafted by the Senate's top two leaders, Harry Reid (D-Nev.) and Mitch McConnell (R-Ky.) – is close to being put on political life support, those familiar with negotiations tell The Huffington Post, as lawmakers coalesce around a major deal instead.
Sources on the Hill Thursday morning expressed a newfound -- at times defeatist -- sense of worry about the political prospects of the proposal, which would cut roughly $1.5 trillion over ten years while granting authority to the president to suggest (but not sign off on) future spending cuts as a condition of raising the debt ceiling now. House Republicans have told leadership that they are sour on the idea, with more than 90 members pledging to oppose it. Another factor contributing toward its demise, however, has been the Obama administration's decision to continue to push for a bigger deficit-reduction package, which has led many lawmakers to consider the McConnell-Reid option both insufficient and potentially unnecessary.
"I think it is certainly an uphill battle now," a Hill Democrat said of the McConnell-Reid plan.
"We did not leave the [White House] meeting yesterday feeling like there was a clear path moving forward," said another Democratic congressional aide. "People are being drawn towards other solutions at the moment. But they are mirages."
Or perhaps not. On Thursday afternoon, a report surfaced that Speaker John Boehner (R-Ohio)'s office and the Obama administration were close to a major deal to resolve the debt ceiling standoff.
On Wednesday evening, the president and his team had separate meetings with congressional Democratic and Republican leadership to chart out a way forward on the debt ceiling deal. The administration pressed, as it has in the past, for lawmakers to coalesce around as big a deficit reduction package as politically possible. There are conflicting reports as to what was discussed. But according to multiple sources from both parties, the administration signaled a willingness to tackle a bigger plan than even that proposed by the bipartisan Gang of Six.
What such a deal would look like is difficult to pin down in detail, as much of the Gang of Six proposal requires congressional committees to write in the specific cuts to programs under their purview. But it would involve steep reductions in health care spending -- both in Medicare and Medicaid. In previous debt ceiling negotiations, the administration has supported further means-testing elements of Medicare as well as raising the eligibility age of the program. Cuts to Medicare suppliers would also be part of a larger package, as would adjusting the payment structure of Social Security so that a lower level of benefits was paid out over time.

Adam Sarvana
Communications Director
U. S. Rep. Raúl M. Grijalva  (AZ-07)
(202) 225-2435 office
(202) 573-2562 cell