With congressional Republicans firmly opposed to considering any tax increases to help close the federal budget deficit, the high-stakes negotiations over raising the debt ceiling by August 2 seem to be gradually coalescing around a contingency plan offered by Senate Minority Leader Mitch McConnell, R-Ken.
The somewhat convoluted plan would involve a series of three votes that would allow President Barack Obama to raise the debt ceiling in increments through the end of 2012. The Treasury Department has warned that if the current debt limit of $14.3 trillion is not raised by August 2, the federal government risks defaulting on its obligations.
Even if House Republicans voted against raising the debt ceiling, as many are still inclined to do, they and Senate Republicans would have to overcome a Presidential veto in order to prevent Obama from raising the debt limit. One of the criticisms of the McConnell approach is that it doesn’t necessarily require steep spending cuts, which was the reason why Republicans have said all along they had been resisting another hike in the debt ceiling. So the approach that seems most likely now is that the debt ceiling vote will include the approximately $1.5 trillion in spending cuts already agreed to by a bipartisan group of lawmakers who had been meeting with Vice President Joe Biden.
Plus, another bipartisan group of lawmakers will now be meeting to come up with a longer-term plan for deficit reduction. The 12-member commission would produce their own plan for spending cuts and revenue increases, and it eventually would be sent to Congress for a straight up or down vote.
The plan is not the preferred way to go as far as the Obama administration is concerned, and many House Republicans like House Majority Leader Eric Cantor, R-Va., are not likely to go along with it. But McConnell and Senate Majority Leader Harry Reid, D-Nev., are reportedly working to find a way through the debt limit mess, with the administration’s encouragement. Let’s hope they can find a solution before the August 2 deadline.