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The McConnell Debt Plan

July 14, 2011 - by Donny Shaw

At this point we’re pretty much all aware that raising the debt ceiling is nothing new. Democrats do it and Republicans do it. It’s been done 9 times in the past decade, and corralling the votes to pass the increases each time has been treated as a burden of the majority. The unique problem this time around is that Congress is split between the parties and it’s not clear who the majority is. But regardless of the politics of the situation, it’s something that pretty much everyone in Congress agrees must be done. And that’s the reality that Senate Minority Leader Micth McConnell’s [R, KY] plan, which seems to be the leading proposal right now, reflects.

Final details of the plan have not yet been released, but you can read the basic outline here. Essentially, it would hand the power to increase the debt ceiling over to the President, give Congress the ability to mount (mainly symbolic) challenges to increases, and require the President to submit a hypothetical plan for offsetting increases with spending cuts. As I see it, the basic qualities of the McConnell plan are:

  • Replaces the concrete spending cuts that Republicans had reportedly won in negotiations with a plan to force the Democrats into tought votes for the sake of political gain.
  • Allows the debt ceiling to be increased without needing to round up Republican votes — solves problem of burden of majority in a split Congress by handing more power over to the Executive.
  • Forces Democrats to go down on the record in favor of debt ceiling increases severl times before 2012 elections (i.e. against the resolutions of diasapproval that the GOP will inevitably launch as the three tranches of debt ceiling increases are implemented.
  • Can be passed without apeasing unpopular positions of Tea Party freshman. As long as leadership in both chambers agree to bring it to a vote, the legislation handing debt ceiling increase authority to the President can be approved with Democratic votes only.

That’s that. It would allow the debt ceiling to be raised by $2.5 trillion before the 2012 elections with zerio in offsetting spending cuts or revenue increases being required. From a policy perspective it’s a total cave for the Republicans. If they go with this proposal, they’re banking on a political win. McConnell has basically admitted as much. “My first choice was to do something important for the country,” he said on Tuesday. “But my second obligation is to my party and my conference to prevent them from being sucked into a horrible position politically that would allow the president, probably, to get reelected because we didn’t handle this difficult situation correctly.”

Right now, Republicans are still publicly calling McConnell’s plan their “last choice.” But with total gridlock on a bigger deal and a Moody’s downgrade of the U.S. credit rating looming it’s looking increasingly likely to form at least the basic shape of what finally ends up happening.

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