Reid, McConnell mull solution to debt crisis
WASHINGTON -- Sen. Harry Reid, D-Nev., said Wednesday there may be a possible way out of the looming debt crisis.
Reid, the Senate majority leader, encouraged more negotiations on a plan that would allow President Barack Obama to increase the government's borrowing power in order to avert financial default.
"It is something we have to take a look at very closely," Reid said of the proposal by the Senate's minority leader, Mitch McConnell, R-Ky. "This is a serious proposal."
Reid said in a Senate speech that he and McConnell have been discussing the plan and possible refinements. Together, he said, they "could go a long way to resolve the impasse" the two sides have reached.
Described as a "last resort" if other negotiations fail, McConnell's proposal would establish groundwork for the $14.3 trillion debt limit to be increased ahead of the Treasury Department's Aug. 2 deadline to avoid default.
It would allow Obama to raise the debt ceiling by $2.5 trillion in three parts. The first increase of $700 billion would come immediately, while two other installments of $900 billion apiece would follow in the months ahead.
The new borrowing authority would take effect unless Congress passes legislation within 15 days disapproving the higher limits.
At each juncture, the president would be required to send Congress a list of spending cuts equal to the new borrowing authority. Lawmakers could then consider the cuts when they write appropriations bills.
Reid stopped short of endorsing the plan, which drew mixed reviews throughout the day. Some conservatives and tea party Republicans condemned it, saying it would allow the debt ceiling to be increased without any guarantee that spending would be cut accordingly.
But along with Reid, House Minority Leader Nancy Pelosi, D-Calif., spoke encouragingly of it, as did some Republican senators.
The White House is keeping the proposal at arms length for the time being.
"We have not discussed or analyzed the components of the plan or endorsed it in its particulars ... because this is a fallback backup option, it's not the preferred option," press secretary Jay Carney said.
The Washington Post reported that, as a way to attract Republican support, Reid and McConnell were discussing the creation of a joint committee of 12 lawmakers that could enforce the budget cuts.
The panel's recommendations for cuts would be fast-tracked through Congress and not subject to amendment, similar to a process that was used to close military bases.
Aides said the leaders are considering pairing McConnell's plan with at least $1.5 trillion in spending cuts that were identified by a negotiating team led by Vice President Joe Biden, the newspaper said.
Reid said Congress will find a way out of its morass.
"I am confident that somehow, someway we will find a way to get this done," he said. "We cannot allow our country for the first time in its history to fail to pay its bills. The risks to our economy are far too great not to."
Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760.
