7/15/2011

Debt Ceiling: July 7, 2011

Obama walks

Pittsburgh, Pennsylvania – July 15 –

There is a possibility that McConnell’s “Plan B” may be used.

Specifically, Senate Minority Leader Mitch McConnell, R-Kentucky, proposes a shift in how government raises debt ceilings, resting the decision and power more with the White House. McConnell's plan would allow the debt ceiling to go up if a) the president requests a specific increase, b) the president submits proposed budget cuts in an amount greater than the debt ceiling increase and c) if two-thirds of Congress does not vote against it (if one-third supports the debt ceiling increase).

The two leaders are considering an attachment of $1 trillion to $1.5 trillion in spending cuts. And they are talking about a commission or group that would propose spending cuts and possibly wider reform.

If this plan passes the Senate, it is possible that the House would vote against it.

There could be a short term deal.

This plan would cover months, three months, or more. The plans would raise the debt ceiling, but require spending cuts. Revenue changes would be a possibility. President Obama has said he would veto this type of plan.

There could be legislation.

House Republicans emerged from a lengthy closed-door meeting Friday with plans to vote on legislation next week that would link a $2.4-trillion debt ceiling increase with a spending cut proposal and balanced budget amendment, proposals President Obama and Democrats have dismissed.

It seems to me that if the legislation above gets through the Senate, it would be vetoed by President Obama.