Reid says his plan will satisfy debt rating agencies

WASHINGTON -- Sen. Harry Reid, D-Nev., today pressed for support of his legislation to solve the debt crisis, citing a report that it would satisfy bond rating agencies and avert a downgrade of U.S. debt while a competing Republican plan would not.

In a Senate speech, Reid moved to address criticism of the bill he introduced Monday to allow an additional $2.4 trillion in continued government borrowing, accompanied by $2.7 trillion in spending cuts and other savings.

Republicans attempted to characterize some of the savings in Reid's initiative as largely illusory. Sen. Mitch McConnell, R-Ky., said today it was "nothing more than another attempt to pull the wool over the eyes of the American people."

While President Barack Obama endorsed Reid's bill in his nationally televised speech on Monday night, House Speaker John Boehner, R-Ohio, said in his televised rebuttal it was "filled with phony accounting and Washington gimmicks."

"Every bit of our proposal was taken from the Republican playbook," Reid responded today . "It is everything that Republicans have demanded wrapped up in a bow and delivered to their door."

Speaking to reporters later in the day, Reid went on the offensive against a competing debt plan sponsored by Boehner and pending in the House.

"Speaker Boehner's plan is not a compromise," Reid said. "It was written for the Tea Party, not for the American people. Democrats will not vote for it. Democrats will not vote for it. Democrats will not vote for it. It is dead on arrival in the Senate -- if they get it out of the House."

At the same time, The White House announced that administration officials would recommend Obama veto Boehner's plan.

The House and Senate were headed to mid-week showdown votes on the competing plans to extend the government's borrowing powers coupled with trillions of dollars in savings and spending cuts.

The bills by Reid and Boehner are similar in some of the spending cuts they seek. Also, both establish special congressional committees to identify further savings and with the power to speed them to final votes.

The major difference is that the Republican bill seeks a two-phase increase in the debt ceiling.

The Boehner proposal calls for $900 billion to $1 trillion now accompanied by $1.2 trillion in spending cuts, and $1.6 trillion in a second installment likely to be needed early next year, along with another $1.8 trillion in savings.

Neither plan is setting Capitol Hill on fire with enthusiasm, as an Aug. 2 deadline looms to raise the debt ceiling. It is possible neither might pass, leaving only days for a last-ditch effort at compromise.

Reid indicated that talks are continuing over other possible solutions. The Washington Post reported today that Senate Democrats and Republicans were in touch over a strategy in the event the Boehner proposal does pass the House.

House members are expected to vote on Wednesday on the Boehner plan. Reid may file a motion later today that would set up a Senate vote for Thursday, leaving open an opportunity to react depending on the House outcome.

In the meantime, Reid said Democrats at their weekly luncheon decided to mount a campaign to sway Republican counterparts over to his legislation. Assuming all 53 members of the Democratic caucus vote with Reid, he would need seven GOP senators to reach a filibuster-proof 60.

But McConnell repeated today that Republicans will fight Reid's plan.

"We believe the Reid proposal is not a serious effort to address the deficit and debt, and should be defeated," he said.

Critics have focused on $1 trillion that Reid placed in his bill as savings from the U.S. withdrawal from Iraq and Afghanistan. They say it is an accounting gimmick to count as savings money that will not be needed in the first place.

Reid has responded that Republicans counted the same money the same way in the budget blueprint they endorsed earlier this year. Sen. Jon Kyl. R-Ariz., disputed that, saying the GOP budget achieved savings "without using that accounting gimmick."

As for the Boehner bill, Democrats call it a no-starter as they and Obama have rejected the possibility of a short-term increase in the debt ceiling.

Additionally, Reid said this morning that credit rating agencies "as late as last night were saying the plan I introduced will not cause a downgrading of our credit. The one the Republicans introduced will."

Aides said Reid was referencing a report on CNN, based on Wall Street sources, that the Boehner plan would not satisfy Moodys and Standard and Poor's, credit rating agencies that have threatened to downgrade their assessment of U.S. debt, which would add billions of dollars to government borrowing costs.

Boehner, asked this morning about the report, said he believed his plan "is enough" to avoid a credit rating downgrade. He said he believed the second round of $1.8 trillion in savings in his bill would satisfy the agencies.

Boehner also is facing a rebellion from conservatives in the House Republican caucus who say his bill does not reach far enough to cut spending, and does not condition the debt hike to passage of a balanced budget amendment.

At a news conference this morning , Boehner stopped short of guaranteeing he has enough support to pass. According to a report in The Hill, Majority Leader Eric Cantor, R-Va., told Republicans at a meeting to stop "grumbling and whining" about the Boehner plan.

Reid said this morning that, for all the talk of dueling debt plans, "as far as I can tell the only dueling going on in Washington today is between the Republican Party's multiple personalities, and there are quite a few."

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760. Follow him on Twitter @DadTetreault.