–Senate Minority Leader Stumbles Badly In Debt Ceiling Battle
–Senate GOP Leader Calls For Debt Hike Vote, Then Reverses Course

By John Shaw

WASHINGTON (MNI) – Senate Majority Leader Harry Reid, effectively
calling the bluff of Minority Leader Mitch McConnell, said Thursday he
would accept the GOP leader’s suggestion that the Senate vote on the
administration’s plan for a new debt ceiling procedure.

As Reid moved to set a specific time for the Senate vote, McConnell
sharply reversed himself and said he would only allow the vote if there
was a 60 vote threshold.

The confusing situation in the Senate underscored a critical
development in the fiscal negotiations. Both parties are scrambling so
hard for tactical advantages that they are offering plans and proposals
that they often don’t even support, just to embarrass the other
party.

We have reached the point where absolutely nothing can be taken at
face value, said one staffer about the state of the fiscal face off.

The administration recommended last week a revised procedure for
the debt ceiling in which Congress no longer would have to affirmatively
approve a debt hike. Instead, Congress would be able to block debt
ceiling increases by passing motions of disapproval, but these would
take two-thirds majorities in both chambers.

This idea was first suggested by McConnell last year, so Treasury
officials have started to call this the McConnell Provision.

The Senate GOP leader said sarcastically Wednesday that he was
“flattered” by this designation but said that he offered the proposal in
the context of cutting more than $2 trillion in spending.

Reid’s decision to seek to schedule the vote Thursday afternoon
came after McConnell effectively taunted him earlier in the day to hold
the vote.

Reid said Thursday morning that he wanted to think about the matter
and then came to the floor a few hours later said he was ready for the
vote.

McConnell’s comments on the debt ceiling Thursday have been
confusing and even contradictory.

On the one hand, he extolled the use of the debt ceiling as “the
best tool” available to control federal spending.

“The only way we ever cut spending around here is by using the
debate over the debt limit to do it,” McConnell said.

McConnell said that President Obama wanted to remove that “spur”
by seeking a new procedure on the debt ceiling that would eliminate the
need for Congress to affirmatively pass legislation to increase the debt
ceiling.

McConnell described this proposal, which he himself first suggested
last year during the debt ceiling brawl. as giving the president
“limitless borrowing power.”

Then, McConnell suggested the Senate vote on this debt ceiling
proposal as an amendment to a bill granting Russia permanent normal
trade relations. McConnell predicted that even Democrats would vote
against this proposal.

Reid said McConnell was offering the proposal as an attempt to
disguise the disarray in Republican ranks on fiscal policy. but he said
he would be “happy to take a look” at Obama’s debt ceiling proposal, but
rejected an immediate Senate vote on it.

Last week, Obama offered a plan calls for $1.6 trillion in
additional revenues, $600 billion in entitlement savings and $50 billion
for new infrastructure spending.

The administration is also calling for the extension of Bush era
tax cuts for those families making less than $250,000 a year, the
extension of the two percentage point payroll tax reduction that was
first approved in 2010, a renewal of unemployment insurance benefits,
and a housing refinance provision to help homeowners who are underwater
in their mortgages.

The administration also recommending a revised procedure for the
debt ceiling.

** MNI Washington Bureau: (202) 371-2121 **

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