July 28, 2011 in Nation/World

GOP bill seen as key step in moving ahead on debt

Associated Press
 
Details of rival plans on spending and debt
House Republicans and Senate Democrats are pressing competing but broadly similar plans to pair an increase in the nation’s $14.3 trillion borrowing cap limit with spending cuts and to create a special committee to recommend bigger savings for a vote later this year.

The chief difference is the size of the immediate increase in the debt limit. Senate Democratic leader Harry Reid’s $2.7 trillion debt increase plan would keep the government afloat into 2013, while Republican House Speaker John Boehner’s $900 billion increase would require action next year. Highlights of the competing plans:

DEBT INCREASE

House GOP: Immediate $900 billion increase in the debt limit; $1.6 trillion more would be made available after enactment of up to $1.8 trillion in future spending cuts.

Senate Democrats: Immediate $2.7 trillion debt limit increase.


SPENDING ‘CAPS’

House GOP: Cuts $756 billion over 10 years from the day-to-day operating budgets of Cabinet agencies. Caps new spending at $1.043 trillion in 2012, $7 billion below 2011 levels. Total cuts of $917 billion, including interest savings.

Senate Democrats: Nearly identical caps on agency budgets. Saves $1 trillion more by assuming steep cuts in war funding. Total cuts of $2.2 trillion, including interest savings.


SPECIAL COMMITTEE

House GOP: Creates a 12-person, House-Senate bipartisan committee evenly divided between the political parties; charged with producing up to $1.8 trillion in deficit cuts. If a majority of the committee agrees on a plan, it would receive a vote in both the House and the Senate.

Senate Democrats: Nearly identical provisions. The panel would be instructed to seek deficit cuts sufficient to bring the deficit down to about 3 percent of the size of the economy.

OTHER

House GOP: Requires a vote on a balanced budget amendment to the Constitution; “program integrity” initiatives aimed at stemming abuses in benefits programs like Social Security; $17 billion in funding for Pell Grants for low-income college students, financed by curbs in student loan subsidies.

Senate Democrats: Similar Pell Grant provisions and more extensive program integrity initiatives; reduced “direct payments” to farmers; $15 billion in revenues from auctions of electromagnetic spectrum.


Contact your elected leaders
WASHINGTON

Rep. Cathy McMorris Rodgers (Republican, 5th District)
2421 Rayburn HOB
Washington, D.C. 20515
Phone: (202) 225-2006
Email: wa05ima@mail.house.gov
Rodgers’ website

Sen. Maria Cantwell (Democrat)
311 Hart SOB
Washington, D.C. 20510
Phone: (202) 224-3441
Cantwell’s email
Cantwell’s website

Sen. Patty Murray (Democrat)
448 Russell SOB
Washington, D.C. 20510
Phone: (202) 224-2621
Murray’s email
Murray’s website

IDAHO

Rep. Raúl Labrador (Republican, 1st District)
1523 Longworth HOB
Washington, D.C. 20515
Phone: (202) 225-6611
Labrador’s email
Labrador’s website

Sen. Mike Crapo (Republican)
239 Dirksen SOB
Washington, D.C. 20510
Phone: (202) 224-6142
Crapo’s email
Crapo’s website

Sen. James Risch (Republican)
483 Russell SOB
Washington, D.C. 20510
Phone: (202) 224-2752
Risch’s email
Risch’s website

WASHINGTON — House Republican leaders pleaded with their recalcitrant rank and file today to back a plan to stave off an unprecedented government default next week. The House vote would bring President Barack Obama and congressional leaders one step closer to the endgame before Tuesday’s deadline.

Republicans are seeking deep spending cuts in exchange for raising the nation’s $14.3 trillion debt limit. The White House has threatened to veto the House GOP bill even if it makes it through the Senate, where it faces unanimous opposition among Senate Democrats. Still, getting the newly modified House plan passed on Thursday was seen as an important step toward the process of finding a compromise between the House and Senate proposals.

In a closed-door GOP meeting just hours before a scheduled vote, Speaker John Boehner, R-Ohio, made headway in getting toward the 217 votes necessary to pass his plan in the House. No Democrats were expected to support it. Boehner told the Republicans he expected to round up enough votes but was not there yet.

“But today is the day,” he said, according to people in the room.

“I think it’s the best deal we can get,” said Rep. Steve Chabot, R-Ohio, who said he had dropped his opposition. Rep. Walter Jones, R-N.C., said he would back the measure to ensure that Boehner “has a seat at the table” for the endgame negotiations.

The White House expected Boehner to rally Republicans for the measure, with adviser David Plouffe saying it will “pass out of the House in partisan fashion.”

Wall Street warily watched the bitter standoff in Washington. Stocks rose modestly Thursday, based in part on a strong jobs report. On Wednesday, nervous investors sent the Dow Jones industrial average down almost 200 points, on top of a 92-point drop a day earlier.

“Default will rock our financial system to its core,” Senate Majority Leader Harry Reid, D-Nev., said at the start of the Senate session.

The rival plans by Reid and House Speaker John Boehner, R-Ohio, have enough in common — including the establishment of a special congressional panel to recommend additional spending cuts this fall — that Reid has hinted a compromise could be easy to snap together.

“Magic things can happen here in Congress in a very short period of time under the right circumstances,” Reid told reporters on Wednesday.

Plouffe signaled that a melding of the two bills could be the compromise that averts a crisis.

“What you’re going to have to do is reconcile what’s in Reid and Boehner, which is a lot of the things the president has talked about in terms of spending cuts he’d be willing to accept. And that’s where the compromise is,” Plouffe said in an interview on MSNBC.

In the House, Boehner made headway with balky conservatives unhappy that the measure contains smaller spending cuts than a more-stringent debt measure that passed the House last week. The new measure depends on caps on agency budgets to cut more than $900 billion from the deficit over the coming decade while permitting a commensurate increase in the nation’s borrowing to allow the government to pay its bills.

Boehner acknowledged that the measure was hardly perfect but said it represented “the best opportunity we have to hold the president’s feet to the fire. He wants a $2.4 trillion blank check that lets him continue his spending binge through the next election. This is the time to say no.” Boehner made the comments Wednesday to conservative radio host Laura Ingraham.

The White House threatened a veto, saying the bill did not meet President Barack Obama’s demand for an increase in the debt limit large enough to prevent a rerun of the current crisis next year, in the heat of the 2012 election campaign.

“It’s inconceivable to me that the president would actually follow through on this threat,” Senate Minority Leader Mitch McConnell, R-Ky., said Thursday. “After all, the president’s first responsibility is to do what’s best for the country, not his re-election campaign. Same goes for the Senate Democrats.”

McConnell accused Democrats of “playing with fire” in planning to block the Boehner proposal in the Senate.

Obama supports an alternative drafted by Reid that contains comparable cuts to agency operating budgets but also claims savings from lowball estimates of war costs. Reid’s plan would provide a record-breaking $2.7 trillion in additional borrowing authority, enough to tide the government over through 2012. Reid, however, is plainly short of the votes needed to overcome a GOP filibuster.

Unless Congress acts by Tuesday, administration officials say, the government will not be able to pay all its bills. They include $23 billion in Social Security benefits due Aug. 3, an $87 billion payment to investors to redeem maturing Treasury securities and more than $30 billion in interest payments that come due Aug. 15.

Treasury Secretary Timothy Geithner and other officials warn that a default could prove catastrophic for an economy still recovering from the worst recession in decades. But some skeptics, including conservative Republicans like Sen. Pat Toomey of Pennsylvania, say Geithner can manage Treasury’s cash flow to avoid a catastrophe if Congress fails to act.

House Republicans tweaked their measure Wednesday to enhance its prospects of passage after a worse-than expected cost estimate from congressional budget analysts on Tuesday. The changes were modest, but under arcane budget conventions, they brought projected savings for 2012 to $22 billion, part of a 10-year cut of $917 billion. That would trigger a $900 billion increase in the debt limit.

While the Boehner and Reid measures differed in key details, they also shared similarities that underscored the concessions made by the two sides in recent days. Reid’s bill does not envision a tax increase to reduce deficits, a bow to Republicans. But neither does the House measure require passage of a constitutional balanced budget amendment for state ratification, a step in the direction of Obama and the Democrats.

For Boehner, the vote shaped up as a critical test of his ability to lead a fractious majority that includes 87 first-term lawmakers, many of them elected with tea party support. Passage also was imperative to maximize Boehner’s leverage with Obama and Reid in a fast-approaching endgame.

Boehner showed fire in a meeting Wednesday with the Republican caucus.

“Get your ass in line,” Boehner told the rank and file. “I can’t do this job unless you’re behind me.”

But one such first-term Republican said again Thursday he likely would oppose the measure.

“Right now, I can’t” vote for it, Rep. Joe Walsh of Illinois told CBS’s “The Early Show.”

He did give Boehner credit for working hard on the problem and called the speaker’s proposal “a step in the right direction.”

Walsh said that Congress is “too obsessed” with the Aug. 2 default deadline, saying chances of getting more meaningful deficit-reduction right would be better if lawmakers weren’t wedded to that drop-dead date. “We’ve got plenty of revenues in August to service our debt,” he said.

© Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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