Republicans in disarray as debt plans are questioned
Washington (CNN) -- Competing Democratic and Republican deficit reduction plans were subjected to a fresh round of criticism Wednesday as signs of disarray emerged in a House Republican caucus split between unhappy conservatives and a leadership struggling to maintain party unity.
Top Democrats said the Republican plan has no chance of passing the Senate; top Republicans called the Democratic plan a non-starter.
As the politicians bickered, the clock continued to tick down. If Congress fails to raise the current $14.3 trillion debt limit by August 2, Americans could face rising interest rates and a declining dollar, among other problems.
As the cost of borrowing rises, individual mortgages, car loans and student loans could become significantly more expensive. Some financial analysts have warned of a potential stock market crash and a downgrade of America＇s triple-A credit rating.
Without an increase in the debt limit, the federal government will not be able to pay all of its bills next month. President Barack Obama recently indicated he can＇t guarantee Social Security checks will be mailed out on time.
Meanwhile, the latest proposals from both parties fall short of their stated objectives, according to reports released over the past two days by the nonpartisan Congressional Budget Office.
A CBO analysis released Wednesday morning concludes that the plan put forward by Senate Majority Leader Harry Reid, D-Nevada, would reduce deficits over the next decade by $2.2 trillion -- $500 billion short of promised savings of $2.7 trillion. Democrats have been claiming their plan would meet the GOP demand that total savings should at least match the debt ceiling increase sought by the government to last through 2012.
On Tuesday, the CBO reported that the most recent proposal from House Speaker John Boehner, R-Ohio, would cut spending by $850 billion rather than the $1.2 trillion proponents claimed it would save, and below the $900 billion increase in the debt ceiling included in the measure.
Boehner＇s plan also calls for at least another $1.6 trillion in deficit reduction partly through tax and entitlement reforms to be proposed by a congressional commission, and would authorize a further extension of the debt ceiling at that point.
Boehner has promised to revise his proposal by adding more spending reductions. The speaker was originally scheduled to hold a House vote on his plan on Wednesday, but has delayed it until Thursday at the earliest.
Lawmakers in both parties, meanwhile, have seized on the CBO reports to attack the other side.
Michael Steel, spokesman for Boehner, said Wednesday that the analysis of Reid＇s proposal "shows the Senate plan for what it is: a grab-bag of gimmicks that gives the president a blank check."
Democrats responded by arguing that Reid＇s plan has more guaranteed savings than Boehner＇s. They also promised that the final version of Reid＇s bill will include more savings.
Beneath the harsh partisan rhetoric, there have been signs of a growing recognition of a need for further compromise. Senate Minority Leader Mitch McConnell, R-Kentucky, called Tuesday for renewed negotiations with Obama, and indicated that his party must be willing to move away from some of its demands.
"We are going to have to get back together and get a solution here," McConnell said. "We cannot get a perfect solution, from my point of view, controlling only the House of Representatives. So I am prepared to accept something less than perfect because perfect is not achievable."
Obama made a nationally televised plea for compromise Monday night but also ripped the GOP for failing to agree to tax hikes on the wealthy.
"This is no way to run the greatest country on Earth," the president said. "The American people may have voted for divided government, but they didn＇t vote for a dysfunctional government."
As for Boehner＇s plan, it appears to be in serious danger of failing to win approval from the GOP-controlled House -- a development that would weaken the party＇s negotiating leverage on a final deal.
Reports emerged Wednesday of a full-blown revolt among rank-and-file conservatives who believe the speaker＇s plan doesn＇t do nearly enough to slow the growth of government.
A senior House GOP source confirmed to CNN that a staffer for the Republican Study Group -- an organization of conservative House members -- sent e-mails to other organizations urging them to pressure conservative House Republicans to oppose the Boehner plan.
"It＇s not appropriate," said Rep. Jim Jordan, R-Ohio, the head of the Republican Study Group, of the e-mail campaign. Jordan claimed he did not know about the e-mails.
On Tuesday, Jordan told CNN that he opposed the Boehner plan.
"I＇m not voting against the speaker, but I＇m voting against this plan," Jordan said. Asked if Boehner had the votes to pass the measure in the House, Jordan said: "I don＇t think so now."
A group of conservative senators released a letter Tuesday calling the Boehner plan insufficient, and arguing that Republicans should reject it in favor of the "cut, cap and balance" plan previously passed by the House and dismissed by the Senate.
"For many reasons, we cannot support this bill and urge you to protect the American taxpayers by strongly opposing this bill," said the letter from Republican Sens. Jim DeMint of South Carolina, Rand Paul of Kentucky, Mike Lee of Utah and David Vitter of Louisiana.
The White House, meanwhile, released a statement noting that Obama＇s senior advisers will recommend a veto if Boehner＇s bill reaches the president＇s desk. Obama has endorsed Reid＇s plan, but has also acknowledged it has little chance of getting passed in the GOP-led House.
Both the Reid and Boehner plans provide a path to raise the debt ceiling through the end of 2012, but differ in terms of scope and requirements for future congressional action.
Reid＇s blueprint calls for roughly $2.7 trillion in savings over the next decade -- the assertion now called into question by the Congressional Budget Office -- while also raising the debt limit by $2.7 trillion, an amount sufficient to fund the government through the next election.
Democrats insist it would be economically dangerous to force a repeat of the current debt ceiling debate in the middle of a presidential campaign; Republicans accuse the Democrats of putting Obama＇s electoral considerations before the national welfare.
Reid＇s plan would cut spending by $1.8 trillion as part of the total $2.2 trillion in savings, according to the CBO. Roughly $1 trillion in the savings are based on the planned U.S. withdrawals from military engagements in Afghanistan and Iraq. Limiting future discretionary spending would save another $751 billion, and an estimated $375 billion would be saved in interest payments due to reduced borrowing because of the spending cuts.
Reid＇s plan also would establish a congressional committee made up of 12 House and Senate members to consider additional options for debt reduction. The committee＇s proposals would be guaranteed by a Senate vote with no amendments by the end of the year.
Reid has insisted his plan meets key GOP demands such no increased taxes. Boehner, however, argued this week that Reid＇s "doesn＇t deal with the biggest drivers of our deficits and debt" -- popular entitlement programs such as Medicare.
Boehner＇s plan, on the other hand, would require two separate votes by Congress to increase the debt ceiling in a package that was intended to include approximately $1.2 trillion in spending cuts over the next decade while setting up a special congressional committee to recommend additional savings of $1.6 trillion or more.
Any failure on the part of Congress to enact the mandated spending reductions would trigger automatic across-the-board budget cuts.
The plan also calls for a congressional vote on a balanced budget amendment to the Constitution by the end of the year. It would allow for combined debt ceiling increases of up to $2.5 trillion.
This plan is "reasonable" and "responsible," Boehner said earlier this week. "We＇re going to have some work to do to get it passed, and I think we＇re going to do it."
A CNN/ORC International Poll reveals a growing public exasperation and demand for compromise. Sixty-four percent of respondents to a July 18-20 survey preferred a deal with a mix of spending cuts and tax increases. Only 34% preferred a debt reduction plan based solely on spending reductions.
According to the poll, the public is sharply divided along partisan lines; Democrats and independents are open to a number of different approaches because they think a failure to raise the debt ceiling would cause a major crisis for the country. Republicans, however, draw the line at tax increases, and a narrow majority of them oppose raising the debt ceiling under any circumstances. |
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