Debt-limit negotiations: the state of play

Amanda Carey Contributor
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Speaker of the House John Boehner appeared on conservative radio host Rush Limbaugh’s show Thursday and said the debt negotiations were “driving him up the wall.” He’s likely not alone. Throughout weeks of debt talks, plans have been floated, proposals pushed down and rhetoric spun.

Now that the conservative-championed Cut, Cap, Balance Act has been tabled in the Senate, here’s where the negotiations on raising the debt limit stand now.

In the Senate

The Democratic-controlled Senate voted to table the Cut, Cap, Balance Act Friday morning. The measure failed by a 51–46 vote along party lines.

Shortly before the Senate vote Friday morning, Reid took one more shot at CCB, saying “This is a very, very bad piece of legislation, and anyone voting for it I think will have to respond in many different ways to the people of their states.” He added that “We, as a Senate, refuse to waste one more day on this legislation.”

In an interview with The Daily Caller, however, Republican Senator Mike Lee of Utah pushed back at Reid, accusing the Majority Leader of rushing the vote in order to prevent further debate.

“We should have had … more time for debate and discussion,” said Lee. “Instead, Harry Reid decided he couldn’t handle that.”

But Democrat leaders in the Senate have been insistent all along that any deal on the debt limit must include certain tax increases and preserve entitlement programs like Medicare and Social Security. And when the reports surfaced that they had been cut out of talks on a rumored deal between the President and House Republican leaders, Democrats were incensed.

The deal reportedly cuts $3 trillion in spending, but puts off any changes in the tax code until next year.

In response to the deal, the Senate Majority Leader said, “What I have to say is this. The President always talked about balance. There has to be some fairness in this. This can’t all be cuts.”

“There has to be some revenues,” Reid added.

The anger from Senate Democrats brought to the surface heated tensions between the caucus on Capitol Hill and President Obama. Every time details of a supposed deal have been leaked that don’t raise revenues, or Obama has signaled an openness to entitlement reform, Democrats have pushed back hard.

In the House

The Republican-controlled House of Representatives passed the Cut, Cap, Balance Act with 234 votes on Tuesday. The bill ties a vote on the debt increase to spending cuts, caps, and requires the passage and ratification of a balanced budget amendment.

Reports surfaced Thursday that Boehner and Majority Leader Eric Cantor were close to reaching a deal, though both sides denied any agreement was in the works. House Republicans even held a press conference Friday morning, in which Boehner got a little testy, saying again that “There is no agreement. There is not deal in private.”

“Our friends on the other side of the aisle are not at all serious about cutting spending,” added Boehner, who ended the press conference with a terse “Spend less. Bye.”

The big question now is whether House Republicans, or just Boehner and Cantor in private meetings with the President, will be willing to make more concessions over the course of the next 11 days in order to increase the debt limit.

The Proposals

Every faction in Congress, as well as President Obama, have their preferred debt-limit deal. Some differ only slightly; others sit on either end of the political spectrum. Now that the country is 11 days away from the deadline set by Treasury Secretary Tim Geithner, there are three, maybe four possibilities going forward.

From the beginning, Obama pushed for a “grand bargain” — an ambitious package that would cut spending by $4 trillion that included entitlement reforms and revenue raiser. Talks over the large deal fell apart when Republicans refused to give in on certain tax increases. But overall, Obama has held that a “balanced” approach – one that cuts spending and raises revenue – is his biggest priority.

When the reports of a deal between Obama and Boehner surfaced Thursday, the large packaged appeared to make a modest comeback, though scaled back to only $3 trillion in cuts and no revenue raisers.

Earlier this week, the Gang of Six presented their own proposal. The group consists of six Senators – three Republicans and three Democrats — who participated in budget talks months ago with Vice President Joe Biden. The group came up with about $1.5 trillion in agreed-upon budget cuts.

Now, they have presented an outline for legislation. Put simply, the Gang’s plan would cut $3.7 trillion over the next decade, and increase revenues by $1 trillion through reforms in the tax code. On Tuesday, Obama tentatively voiced support for the proposal, as did a handful of Democrat and Republican Senators.

Then there’s the McConnell–Reid backup plan, which would give the President the authority to unilaterally request debt limit increases in three increments. Earlier in the week the plan gained traction and tentative support from Democrats. That plan, however, has very little support from Republicans.

What now?

At this point, it’s anyone’s guess as to how debt-limit negotiations will proceed. Boehner has repeatedly denied that a deal was close to being finalized with Obama. Sen. Lee also told TheDC that the “rumors are utterly false.”

Moreover, Lee — who has been one of the primary leaders in the Senate Republican caucus — told TheDC that Republicans will not vote for a bad deal just to raise the debt limit.

“I’m willing to compromise and negotiate, but only on terms that the fix underlying problem,” added Lee. The Senator went on to say that as far as Republicans are concerned, “There is plenty of room left for compromise within the parameters we’ve outlined.”

At this point, onlookers can expect to see Republican continue to up their calls for Democrats to come forth with their own proposal to tackle the debt limit and deficit reduction.

“What has the Senate done? When is Harry Reid going to put forward his ideas?” said House Majority Leader Eric Cantor during the Friday morning press conference. “When is the Senate going to act?”

“Mr. Reid, if you don’t like our plan, where’s your plan?” added Rep. Jeb Hensarling of Texas.