Two sides craft debt plans before deadline
With no debt deal done and both sides racing an Aug. 2 deadline, Democrats and Republicans on Sunday readied separate backup plans to try to raise the government’s borrowing limit and cut spending.
House Speaker John A. Boehner, Ohio Republican, pitched his colleagues on a plan to raise the borrowing limit by about $1 trillion and match that with similar sized spending cuts — enough to last through the rest of the year, and leaving for later the heavy lifting on taxes and bigger spending items.
Meanwhile, Senate Majority Leader Harry Reid said he is working on a plan to raise the debt limit by $2.7 trillion, coupled with an equal reduction in projected future spending. In a concession to Republicans, he said that plan would not include tax increases, but that the new debt level would last through the 2012 elections.
That date has become a critical marker for Democrats — so much so that President Obama’s advisers said he would veto any bill that doesn’t last that long.
“It must be extended in a way that gives certainty to economy through ‘13 and not some short-term gimmick, where we’re right back in this fix in six or eight months,” White House Chief of Staff Bill Daley said on NBC’s “Meet the Press” program Sunday.
“I understand why they’re saying they won’t sign a short-term. But I think they won’t have any choice, and I think that’s the only answer right now,” he said.
Leaders on both sides were testing their ideas with fellow party members Sunday.
Mr. Boehner held a conference call with House Republicans in the afternoon, while Mr. Reid and House Minority Leader Nancy Pelosi, California Democrat, went to meet with Mr. Obama at the White House on Sunday evening.
The backup plans by Mr. Boehner and Senate Democrats reflect just how much the negotiations have shifted over the past two days, after Mr. Boehner announced he was walking away from talks with Mr. Obama.
“After over six months [of] conversations with the president about doing the ‘big deal,’ about taking a big step in the right direction, it is pretty clear to me that they are just not willing to do it — that the next election matters more than doing what is right for the country,” Mr. Boehner told “Fox News Sunday.”
Mr. Boehner said he would instead try to work out a deal with Mr. Reid and, barring that, write his own backup plan to raise the debt limit by about $1 trillion, which would likely last through the rest of this year, and combine that with a promise the government spends about $1 trillion less over the next decade than otherwise projected.
The Associated Press reported that Republicans would release their plan Monday.
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