Debt Ceiling Negotiations – Sen. McConnell Blinks

Debt ceiling negotiations are at a critical point.  The deadline for default is quickly approaching (even though some say it is a fake deadline, including the Taxpayers Protection Alliance) and the House republican leadership has stood its ground by insisting that tax increases should not be a part of any deal.  A coalition of more than 200 groups from across the country (including the Taxpayers Protection Alliance) has been promoting an idea called Cut, Cap, and Balance (click here for previous blog posting) as a way to get the nation’s fiscal house in order.  It is simple: cut spending; cap spending, and pass a balanced budget amendment.

A bill proposed by Sens. Rand Paul, (R-Ky.), Pat Toomey, (R-Penn.), and Mike Lee (R-Utah) mirrors the principles of cut, cap, and balance by allowing a debt ceiling increase as long as if there were spending cuts, enforceable spending caps and a balanced budget amendment.  The House of Representatives also plans a vote on cut, cap, and balance.  Great news for the taxpayers, but then comes along Sen. Mitch McConnell (R-Ky.) to throw cold water on all the progress that had been made during the debt negotiations.   Sen. McConnell’s plan (dubbed Plan B) would give the President the power to raise the debt ceiling three times to the tune of $2.5 trillion which would be enough to get them past the 2012 elections.

Under McConnell’s plan, the pressure would be on President Obama to request a debt-ceiling increase from Congress and the corresponding spending cuts in three separate votes.  Here is the catch, Congress would vote each time on a resolution to disapprove of the debt-ceiling request. That means Congress would have to get a two-thirds majority to override a presidential veto to prevent the increase.

McConnell’s plan does not require spending cut and as Andrew Moylan with the National Taxpayers Union mentioned in a blog post earlier this week, “it does NOT force any cuts in spending. It contains nothing in the way of Congressional fast-track authority, the way several ‘spending commission’ proposals that preceded the President’s Fiscal Commission executive order did. Unless I’m missing something (which is always possible), I don’t see a single thing that actually requires a spending cut, just a requirement that the President identify a list of spending cuts.”

McConnell even has doubts about his plan.  According to a July 12 Politico article, “Minority Leader Mitch McConnell (R-Ky.) acknowledged at a news conference Tuesday that the new plan would not ensure Republicans would get the trillions in spending cuts they’ve been seeking, and he noted that his party has become ‘increasingly pessimistic’ that it can reach a debt deal with Obama.”

So, why did he propose it?  According to a July 13 Politico article, “’I refuse to help Barack Obama get reelected by marching Republicans into a position where we have co-ownership of a bad economy,’ McConnell told his host, Laura Ingraham. ‘The reason default is no better an idea today than it was when Newt Gingrich tried it in 1995 is that it destroys your brand and would give the president an opportunity to blame Republicans for a bad economy.’’  So, this hollow plan is more for political gain than solving our fiscal crisis.  That is shameful.

The ultimate irony is that Sen. McConnell would want to give so much more power to the Executive Branch considering that his defense of earmarking through the years was that the Executive Branch already has too much power.

The true path to fiscal solvency is not gimmickry; it is through fiscal discipline and the cut, cap, and balance proposal is a real solution.