By Alexander Bolton - 07/28/11 12:56 AM EDT
The Aug. 2 deadline for raising the nation’s debt ceiling might not be as rigid a cutoff date as the administration has been saying, according to some senior Senate Democrats.
Senate Democrats, in the midst of stalemated negotiations, acknowledge there might be some flexibility with the deadline Treasury Secretary Timothy Geithner has set for raising the national debt limit.
Analyses by Barclays and UBS suggest a national default could be pushed back until Aug. 8 or Aug. 10 because the federal government has received a higher flow of tax revenues than it had earlier anticipated.
Senate Budget Committee Chairman Kent Conrad (D-N.D.) said the banks’ reports are credible.
“It could be a few days. I’m sure it could,” said Conrad. “Yeah, I suspect that.”
Conrad said the extra time does little to alleviate pressure on Congress to strike a deal soon.
“But that doesn’t fundamentally change anything. We’ve got to make spending and revenue decisions that reduce the deficit,” he said.
Sen. Dianne Feinstein (D-Calif.) said a bill might not have to be passed and signed by Aug. 2 if Democrats and Republicans have already agreed to a deal.
“I think if a deal were announced and the bill is to be paid over the third and the fourth [of August], that it would be OK, candidly,” she said. “But the deal would have to have a kind of very strong acceptance in the body.”
Geithner has pushed back against private-sector forecasts that Congress has a few more days than expected to reach a deal.
Colleen Murray, a Treasury spokeswoman, said Wednesday that the government had not received more tax revenue than expected in June and July.
“The fact remains that the U.S. will exhaust borrowing authority on Aug. 2 and after that date there is no way to guarantee we will be able to meet all of the nation’s obligations,” she said.
White House Budget Director Jack Lew likewise insists there is no wiggle room.
“Aug. 2 is very real,” he said Tuesday on MSNBC.
But some Democrats are skeptical of Lew after he told them at a meeting last Thursday that media reports of an imminent debt-limit deal between President Obama and House Speaker John Boehner (R-Ohio) were false.
A senior administration official told reporters at a background briefing Friday evening that the two sides were in fact very close to a deal.
The markets became more jittery as Wednesday ended with no bipartisan deal in sight. The Dow Jones Industrial Average ended the day down almost 200 points.
Senate Majority Leader Harry Reid (D-Nev.) said time is fast running out, but stopped short of pushing the panic button.
Asked when the “drop-dead” date was for putting debt-limit legislation on the Senate floor, Reid deadpanned: “Probably soon.”
He said legislation could move through the upper chamber quickly if a bipartisan deal is struck.
“Magic things can happen here in Congress in a very short period of time under the right circumstances,” he said.
A Senate Democratic aide supported the administration’s claim that Aug. 2 is not a flexible date.
“It’s a firm deadline and we cannot afford to delude ourselves into thinking we have any more time to kick the can down the road,” the aide said. “The only situation under which we can do a short-term extension of a few days is if a deal is already struck.”
Senate conservatives led by Jim DeMint (R-S.C.) have vowed to filibuster legislation that raises the debt limit if Congress does not first pass a balanced-budget amendment.
DeMint vowed to use “every tool” in the Senate to stop an earlier fallback debt plan introduced by Senate Republican Leader Mitch McConnell (Ky.). Conservatives say two competing proposals from Reid and Boehner aren’t substantially different.
Reid has two procedural options for moving legislation to increase the debt limit. One possibility is to put his own bill on the floor. Another option is to take Boehner’s plan — assuming it can pass the House — and amend it by substituting the Reid plan.
If Reid files cloture — a motion to end debate — on his own plan by Wednesday evening, that would set up a final Senate vote for Sunday, sending it to the House late that same day. Reid would have to hold two cloture votes on his bill, because it has been offered as an amendment to underlying legislation.
If Reid waits for Boehner’s bill, modifies it with his own and then files cloture, that would also set up a final vote Sunday, assuming Boehner’s plan gets to the Senate on Thursday.
Waiting for Boehner’s bill to come from the House would give Reid an extra day to modify his own plan, which the Congressional Budget Office projects would cut $2.2 trillion from the deficit over 10 years.
Democrats want to raise the debt limit by at least $2.4 trillion to carry the nation past the 2012 election. Republicans have demanded that the amount of debt-limit increase be matched dollar for dollar by spending cuts.
Reid said Wednesday it would not be difficult to find an additional $200 billion or $300 billion in savings.
“So for us to arrive at $2.4 trillion-$2.5 trillion is really fairly easy to do. It’s what — it’s what we call tweaking. It can be done fairly easily,” Reid told reporters.