Open Thread & News Round-Up: Debt Negotiations

Here's the latest...

New York Times—McConnell Proposal Gives Obama Power to Increase Debt Limit:

The Senate Republican leader, Mitch McConnell of Kentucky, said Tuesday that a bipartisan budget deal with President Obama was probably out of reach, and he proposed a plan under which the president could increase the federal debt limit without Congressional approval for offsetting spending cuts.

...Mr. McConnell's proposal would give Mr. Obama sweeping power to increase the government's borrowing authority, in increments, by up to $2.4 trillion — enough, it is estimated, to cover federal obligations through next year — only if Mr. Obama specified spending cuts of equal amounts. But Congress would not have to approve the spending cuts prior to the debt-limit increase.

It is not clear whether House Republicans would sign on to such a measure, given their drive to extract deep spending cuts in return for any debt-limit increase.

TPMDC—McConnell Debt Back-Up Plan Gives Dems Opportunity To Break GOP Anti-Tax Hegemony:

The plan itself was clear enough: Republicans don't really have the stomach to allow the country to default on its debt in pursuit of their decades-long goals of slashing deeply into popular entitlement programs. But instead of admitting that and extending President Obama's borrowing authority through the 2012 election, McConnell proposed a Rube Goldberg-esque scheme by which Obama, by accepting some public embarrassment for himself and his party, could raise the debt limit on his own, with no policy strings attached.

No spending cuts for Republicans. No tax increases for Democrats. In effect, a clean debt-limit hike with all attendant political consequences, such as there are any, falling on the latter.

The Hill—McConnell fallback plan would leave debt-ceiling hikes to Obama:

McConnell described his proposal as a "last choice option" to avoid a national default if Congress fails to reach a compromise to raise the debt limit by Aug. 2.

"It's extremely important that the country reassure the markets that default is not an option and reassure Social Security recipients and families of military veterans that default is not an option," McConnell said.

Naturally, his attempt at being vaguely reasonable (by GOP standards) was immediately met with "immediate, fierce criticism from grassroots conservatives, who are furious at the lack of firm spending cuts."

The Hill—Tea Party group tells McConnell to 'find his spine': "The influential conservative Tea Party organization FreedomWorks is pushing back on a plan by Senate Minority Leader Mitch McConnell to hand much of the responsibility for raising the debt ceiling to President Obama. 'Sen. McConnell thinks cutting spending is too hard. Help him find his spine! Call him at 202-224-2541,' the group tweeted."

CNN—Gingrich blasts McConnell over debt ceiling: "Despite recent public scraps with his own party, former House Speaker Newt Gingrich didn't hold back Tuesday on the subject of Senate Minority Leader Mitch McConnell's debt ceiling plan. 'McConnell's plan is an irresponsible surrender to big government, big deficits and continued overspending,' Gingrich tweeted."

TPMDC—Grover Norquist: Rumors Of My Support For The McConnell Debt Plan Are Greatly Exaggerated: "A couple hours after the National Review posted Norquist's initial take on the plan (and as conservative anger at McConnell bubbled up) Norquist pushed back, claiming that he's not endorsing anything, yet. 'Americans for Tax Reform President Grover Norquist did not endorse any particular debt limit contingency plan, as has been alleged,' ATR wrote in a blog post. 'He did endorse the objective of Leader McConnell's effort to force the President to put his spending plan in writing.' Though he's not officially endorsing it, Norquist is continuing to say nicer things about McConnell's plan than just about anyone on the right."

Meanwhile...

Gallup—U.S. Debt Ceiling Increase Remains Unpopular With Americans: "Despite agreement among leaders of both sides of the political aisle in Washington that raising the U.S. debt ceiling is necessary, more Americans want their member of Congress to vote against such a bill than for it, 42% vs. 22%, while one-third are unsure."

WaPo—Congress hears outcry from business lobby on debt ceiling and deficit: "A sprawling coalition of Wall Street and Main Street business leaders sent an unmistakable message to lawmakers Tuesday: Enough squabbling. Get the debt ceiling raised. The message, sent in a letter to President Obama and every member of Congress, puts pressure on GOP lawmakers, who have staked out an uncompromising stance against raising taxes in the partisan wrangling over the country's borrowing limit."

And meanwhile still...

ThinkProgress—Cantor Proposes Cutting $353 Billion from Medicare and Medicaid: "House Majority Leader Eric Cantor (R-VA) has proposed $353 billion in cuts to Medicare and Medicaid, which he suggested in the deficit reduction talks yesterday at the White House. Cantor's plan would cut $100 billion in matching payments to states for Medicaid, and save $109 billion by increasing co-payments, reducing home health payments, and prohibiting first dollar coverage for Medigap policies."

Discuss.