Work on McConnell-Reid fallback put on ice; onus put on House

Senate Majority Leader Harry Reid (D-Nev.) will postpone plans to move on a fallback option to raise the debt limit to give the House a chance to move first.

The delay on a fallback plan significantly increases the pressure on President Obama and House Speaker John Boehner (R-Ohio) to reach a deal by themselves to avoid a national default.

Reid had planned to begin proceedings this weekend on a contingency plan he had negotiated with Senate Republican Leader Mitch McConnell (Ky.), who floated the original idea.

The legislation would have given Obama nearly unilateral authority to raise the debt limit, cut spending by $1 trillion to $1.5 trillion and set up a special congressional committee to assemble a deficit-reduction package.

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Earlier this week, the leadership’s plan was to move that package through the Senate and then send it to the House, putting intense pressure on House lawmakers to accept it before a potential national default after Aug. 2.

But House Republicans have vowed to defeat it, and conservative Senate Republicans have pledged to do everything they can to oppose it. 

Instead, Reid and McConnell will wait for the possibility of the president and the Speaker striking a debt-limit deal, which would move through the lower chamber first.

“Earlier this week it looked like we needed to go to that fallback plan as soon as possible. It looked earlier this week like the Senate would have to originate the legislation perhaps as soon as today to avoid default,” Reid said on the Senate floor.

Reid said “circumstances have changed” in the wake of media reports that Obama and Boehner are closing in on a $3 trillion deficit-reduction deal that would raise the debt limit and establish a promise to reform the tax code at a later date.

Reid said the House should act first because a prospective deal between Obama and Boehner would include spending and tax measures, noting the Constitution requires such measures to begin in the House.

“The path to avert default now runs through the House of Representatives,” he said. “We in the Senate must wait for them.”

But Boehner on Friday assured House Republicans that he is not on the verge of striking a deal with the White House to raise the debt ceiling.

“Frankly, we are not close to an agreement,” Boehner said. “I would just suggest it is going to be a hot weekend here in Washington, D.C.” 

Waiting for Obama and Boehner to reach a deal could be risky, however. If the agreement fails to materialize, it might be too late to pass a fallback plan to raise the debt limit through the Senate by the Aug. 2 deadline. That's because Sen. Jim DeMint (R-S.C.), backed by other conservatives, has vowed to use every procedural tool to delay its consideration.

Reid canceled plans for the Senate to work over the weekend, setting the chamber’s next vote for Monday afternoon.

The Speaker told his members he plans to work all weekend on a deal, and said the House GOP will hold another conference meeting Monday for an update on the talks.

Senators said rumors of a $3 trillion deal have shoved aside the fallback option.

“What’s happening now with the president and John Boehner, that’s the hottest thing in town,” said Sen. Dan Coats (R-Ind.), acknowledging he doesn’t know if the rumors are rhetoric or reality. “That is sort of eclipsing every other effort at this particular time.”

The president said the pressure to find a deal was on the House.

"The only folks we have left to convince are some folks in the House of Representatives," Obama said at Friday town-hall. "We're going to keep working on that."

Coats said he did not know at this point whether he could support the McConnell-Reid contingency plan. 

Senate Republicans have grown leery of the plan, despite McConnell’s role in crafting it, because of angry complaints from Tea Party voters.

“I cannot be more emphatic in stating my opposition to that,” said Sen. Mike Lee (R-Utah). “As Republicans, we have said from the very beginning of this discussion, since before I even took office, that the one thing we would not be comfortable with would be a clean debt-limit increase.”

Senate Democrats say they have not been given any details from the White House about a potential deal with Boehner, fueling anger and anxiety within their conference.

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“We had Jack Lew in yesterday — we had no clue that even discussions were going on,” said Sen. Dianne Feinstein (D-Calif.), describing an angry meeting Senate Democrats had the with the White House budget director. “I’ve never seen frustration higher.

“I don’t want to be critical right now of the president; I know what he’s trying to do, but he has to keep his team advised,” she said. “Whether you like it or not, people have to feel they’re part of it.” 

Sen. Jay Rockefeller (D-W.Va.) said he doesn't know any of the details of the potential deal between Obama and Boehner but is concerned about media reports of it.

"I don't like the sound of it at all, but I don't know what's in it," he said. 

Rockefeller said Democrats unleashed their frustration with the White House at the meeting with Lew on Thursday.

"I've never been in such an intense, high-octane meeting in my life," he said, describing it as "not pleasant" for the White House budget director. 

Reid said he would consider moving other legislation in case an agreement failed to emerge from the talks between the president and House Speaker.