McConnell's fallback plan gains steam

Senate aides say a fallback plan to give President Obama authority to raise the $14.3 trillion debt limit will soon become “plan A” for averting a national default.

Publicly, House Speaker John Boehner (R-Ohio) and Senate Republican leader Mitch McConnell (Ky.) have made votes on the Cut, Cap and Balance Act and a balanced-budget amendment their priority this week.

But GOP aides say the leaders are already looking past those votes to a potential deal with Democrats to raise the debt limit before an Aug. 2 deadline and spare Republican lawmakers from a political backlash. 

“McConnell is going to let cut, cap and balance have its vote and then immediately move to plan B,” said a GOP aide in reference to the fallback debt plan McConnell is negotiating with Senate Majority Leader Harry Reid (D-Nev.).

Another Republican aide said McConnell’s contingency plan “has become plan A.”

The fallback option, which would give Obama nearly unilateral authority to raise the debt limit, continued to gain momentum Monday as Sen. Dianne Feinstein (Calif.), an influential member of the Senate Democratic Conference, endorsed it.

“I see the Reid-McConnell bill as the only practical way forward,” Feinstein said Monday on MSNBC. “I think it makes very good sense and I hope that people see the light of day.”

Conservative opposition to the McConnell-Reid plan intensified on Monday as a coalition of activist groups, including some affiliated with the Tea Party, sent a scathing letter to Capitol Hill bashing it.

“We write in strong opposition to Sen. Mitch McConnell’s ‘contingency plan’ to raise the debt ceiling and pledge the use of every tool at our coalition’s disposal to see to its defeat,” the groups wrote.

“In one fell swoop, it abdicates congressional responsibility by granting the president the unilateral authority to raise the debt ceiling and undermines our ability to secure real policy changes that will alter our unsustainable fiscal path,” they wrote.

American Majority Action, the Club for Growth, FreedomWorks, Let Freedom Ring and, which claimed to represent “millions of Americans,” signed the letter.

The outcry has spurred efforts by House Republicans to reach a deal with the president, including through an unannounced White House meeting between Obama, Boehner and House Majority Leader Eric Cantor (R-Va.). 

The full group of congressional leaders, however, has not met with Obama since Thursday, and House GOP leaders on Saturday ignored a 36-hour deadline Obama set for them to come up with a politically viable plan.

Feinstein said there is not enough time to piece together the $4 trillion deficit-reduction plan Obama has requested 

“I think if you take a $4 trillion cut right now, it’s a huge delayed discussion that doesn’t get a lot done by the 2nd of August,” Feinstein said. “And it has the potential of having things in it which could explode later on. So I very much favor what the Reid-McConnell bill is attempting to do, and I think it’s the thing that makes the best sense.” 

The proposal McConnell unveiled last week would give Obama authority to raise the debt limit by $2.5 trillion in three tranches. Congress could only block the request by passing a resolution of disapproval and then overriding an expected veto with a two-thirds vote in each chamber.

The GOP leader has since entered into negotiations with Reid to modify the plan.

A Democratic aide and a Republican senator said the leaders are nearing agreement to attach $1.5 trillion in spending cuts to the legislation. Another change sets up a special committee of eight or 12 lawmakers to recommend a deficit-reduction package that would receive an automatic vote on the Senate floor.

Stiff conservative opposition to the proposal, reflected in a letter from grassroots groups on Monday, has put a temporary freeze on talks between McConnell and Reid. But aides suggested talks on the fallback were on pause so that the House and Senate could vote on alternatives backed by House conservatives that have no chance of moving through the Senate.

The cut, cap and balance proposal, which would authorize Congress to raise the debt limit by $2.4 trillion only after it passed a balanced-budget amendment, is not likely to win more than a few Democratic votes.

An aide to McConnell said the leader would not negotiate the fallback plan while the Senate is set to take up the cut, cap and balance bill and the balanced-budget amendment.

“It’s a last resort,” the aide said.

A Senate Democratic aide said talks on the contingency plan are “on pause.”

“Right now it’s all about these other votes and making sure that the fallback plan is a fallback plan,” said the aide.

Sen. Jim DeMint (R-S.C.) on Friday vowed to “use every tool in the Senate” to block the McConnell-Reid plan, which he called a blank-check debt-limit increase.

Several other Senate conservatives have announced their opposition to that plan, including Sens. Mike Lee (R-Utah) and Marco Rubio (R-Fla.).

DeMint and Lee are members of the Senate Tea Party Caucus.

Senate leaders will be hard-pressed to pass the contingency plan by the beginning of next month, at which point the nation will be at serious risk of default.

Reid announced Monday that he would keep the Senate in session during the two weekends before the deadline to ensure enough floor time to overcome the delaying tactics of conservative Republicans.

Daniel Strauss contributed to this report.