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Credit Warning Piles Pressure on Already Tense Negotiations

Mark Wilson/Getty Images
Vice President Joseph Biden (right) and White House Chief of Staff William Daley talk during Wednesday’s debt negotiations.

Senate Majority Leader Harry Reid (D-Nev.) praised McConnells framework on the chamber floor Wednesday as a unique proposal, something that we have to look at very closely, and he is apparently doing just that. In the afternoon gathering with Democratic leaders, Reid discussed some of the ideas he had to alter the McConnell plan and pair it with hard cuts.

McConnells plan only requires the president to recommend cuts when he submits requests to Congress to increase the debt limit. Though Democrats, like Republicans, say they would prefer the White House talks to produce a deal with savings equaling the amount of a debt ceiling increase approximately $2.4 trillion they, too, are considering a fallback plan.

Short of a larger agreement, they discussed approving a smaller deal from the White House negotiations, then using some version of McConnells plan to further raise the debt ceiling to ensure borrowing capacity through the elections. The Kentucky Republican proposed a complicated mechanism for raising the debt ceiling that would force multiple votes and place the political burden on Congressional Democrats and Obama.

We could couple it with other things, Rep. Chris Van Hollen (D-Md.) said about the McConnell plan, which he said were looking at as he exited the Democrats session Wednesday.

Its still unclear what those other things might look like or even whether theres consensus among Democrats to move forward with a contingency plan that is based on McConnells. The Democrats discussed the balance of cuts and whether Reid would include closing corporate tax loopholes in such a package, but they didnt reach agreement.

The attendees of the meeting in Reids leadership suite included Pelosi, House Minority Whip Steny Hoyer (Md.), House Assistant Minority Leader James Clyburn (S.C.), House Democratic Caucus Chairman John Larson (Conn.), Van Hollen, Senate Majority Whip Dick Durbin (Ill.), Senate Democratic Conference Vice Chairman Charles Schumer (N.Y.) and Senate Democratic Conference Secretary Patty Murray (Wash.).

The Democrats embrace of McConnells proposal, or some iteration of it, is a far cry from House Republicans stance, and the opposition isnt isolated to the GOP Conferences tea party freshmen. Establishment allies of Boehner conceded in the Speakers Lobby on Wednesday that McConnells plan was dead on arrival in the House, even as Boehner publicly praised his Senate counterparts hard work.

Boehner has not specifically stated that he endorses the plan, and Cantor has flat-out rejected it. The latter has given Democrats, especially those in the room Wednesday, a platform to criticize the House GOP even as they try to structure a plan that might be palatable to them.
You have Republicans trashing a proposal put forward by the Republican leader in the Senate, Van Hollen said. I think people need to wake up to the fact that these guys message their sins: Were prepared to take the entire economy, put millions of jobs at risk, unless we get things 100 percent our way.

Christina Bellantoni, Jessica Brady and John Stanton contributed to this report.

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