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Reid and McConnell Work on Debt Deal Reid and McConnell Work on Debt Deal

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BUDGET

Reid and McConnell Work on Debt Deal

Reid Working to Update McConnell Contingency Plan

Senate Majority Leader Harry Reid, D-Nev., is working with Senate Minority Leader Mitch McConnell, R-Ky., on an updated version of a proposal McConnell floated on Tuesday to allow President Obama to raise the federal debt ceiling in multiple steps.

Reid has proposed linking McConnell’s plan with spending cuts—totaling perhaps $1 trillion over 10 years—and identified talks led by Vice President Joe Biden as the likely source of those cuts, according to Senate leadership aides. When each chamber voted to approve the process allowing Obama to increase the debt ceiling, they would also vote on the cuts, the aides said.

 

“The Republican Leader’s proposal combined with ideas he and I have been discussing to force a vote on deficit-reduction proposals could go a long way toward resolving the impasse we now find ourselves in,” Reid said Wednesday morning.

(RELATED: Debt Talks Splinter Into Dueling GOP Plans)

While Reid and McConnell have not reached a full agreement, a senior Democratic aide expressed confidence that they will “work out some kind of pragmatic solution.”

 

The two leaders presented the product of discussions at a White House meeting on Wednesday, aides said.

Reid’s proposed additions are aimed at increasing the odds that the plan could pass in the House, but cooperation between the Senate leaders suggested an increasing gulf between the two chambers and particularly between Senate and House Republicans.

(RELATED: How Baseball Explains the Debt-Ceiling Talks)

House Republicans are pushing what they call their own plan, with a vote on a balanced budget amendment next week that House leadership aides said could open the door for a vote raising the debt ceiling if the amendment or related legislation passes.

 

Senate leadership aides said the remaining hurdle is House Republicans, who are not part of the talks and have indicated McConnell’s plan is not acceptable to their members.

(RELATED: Bernanke Sidesteps Tug of War in Debt Talks)

“That is the elephant in the room,” the senior Democratic aide said.

McConnell on Tuesday suggested that if no deal is near by the August 2 deadline set by the Treasury Department, Congress could pass a bill granting Obama the authority to raise the debt limit on his own in one “tranche” worth $700 billion and two more worth $900 billion, in three steps in the next year or so. Each request to raise the limit, which would immediately give the administration $100 billion in new borrowing authority, would be subject to a resolution of disapproval. Both chambers would likely pass such a resolution, requiring Obama to veto it each time. A third of each chamber, presumably Democrats, would then have to vote for the increase to avert a veto override. Obama would be required to submit proposed spending cuts with each request, but implementing those would be left to appropriators.

Reid has also proposed creating a bipartisan committee tasked with drafting an enforceable debt-reduction plan with rules that would allow its proposed spending cuts to receive expedited consideration in each chamber, Senate aides confirmed.

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