McConnell's about-face: Go big on deficit

Senate Minority Leader Mitch McConnell (R-Ky.) has made an about-face in recent days and now favors a huge deficit-reduction deal, according to Senate GOP sources. 

McConnell’s shift is significant because it could push the supercommittee to pursue an agreement that would slash trillions of dollars from the nation’s record debt levels. Such a deal could derail President Obama’s reelection strategy of criticizing what some have called a do-nothing Congress. 

At the beginning of this week, Senate GOP and Democratic sources said McConnell appeared to favor a $1.2 trillion package out of the deficit-reduction supercommittee, the minimum level needed to avert automatic spending cuts to defense and non-defense programs. 

Democratic aides at the time accused McConnell of trying to torpedo a major agreement. 

“There are many who think McConnell is tanking the thing. They win if Washington is seen as broken. If Washington is reportedly broken, then they get to elect more Republican senators,” a Democratic aide said Monday. 

By Thursday, the dynamic changed. McConnell had signaled to colleagues that he would be willing to support a plan on the scale of $4 trillion, which budget hawks say would have a meaningful impact on the deficit. Anything less, they maintain, is window dressing. 

A $4 trillion deal has gained more popularity in the Senate GOP conference this week as lawmakers have become convinced that Obama wants the deficit-reduction supercommittee to fail.

“McConnell has recalculated in the last few days,” said a Republican senator, who asked for anonymity to speak about his leader. 

Aides to McConnell say he has always supported a deficit-reduction package that would make significant reforms to Social Security, Medicare and Medicaid. 

Others acknowledge that McConnell has been consistent in his public statements, but add that behind the scenes, it’s been a different story. 

McConnell on Tuesday said he has always wanted the supercommittee to succeed in advancing major reforms. 

“I assure you, I wouldn’t have lightly been a part of crafting a process that reduced the number for success in the Senate to 51 and eliminated the possibility of amendments if I was not interested in getting an outcome,” he said. 

A member of the supercommittee told The Hill in September that the panel is unlikely to “go big” because striking such a bipartisan deal is nearly impossible. 

One obstacle to a $4 trillion deal is that it would have to include significant tax increases to attract the necessary Democratic support. McConnell and other GOP leaders have repeatedly argued that taxes should not be raised in an ailing economy.

Media reports have noted that McConnell and Senate Republicans have had less incentive than House Speaker John Boehner (R-Ohio) to push the supercommittee to strike a grand bargain. 

The rationale was that Boehner has a majority to protect and needs to show voters that Republicans can govern. Senate Republicans, however, are in the minority and are more likely to take charge of the upper chamber if Senate Democrats are shown to be incapable of addressing the nation’s problems. 

That line of thinking has now changed, according to Republican senators. 

Senate GOP officials have begun to reassess the political impact of the supercommittee deadlocking or reporting a modest agreement, as it has become evident that it would play into Obama’s reelection game plan. Regardless of what happens with the supercommittee, the 2012 map favors the Senate GOP, as Democrats are defending 23 seats and Republicans only 10. 

Obama pushed hard for a large deficit-reduction package in July, but Boehner walked away from the tentative deal amid concern from conservatives in the House about tax provisions.

Senate Minority Whip Jon Kyl (R-Ariz.) said he suspects Obama is more interested in taking a page from former President Harry Truman’s playbook and running against a do-nothing Congress instead of pushing for a major deficit deal. 

“I haven’t seen any signals. He might be talking to his Democratic colleagues,” Kyl said when asked whether he’s seen any indication Obama is pushing for a grand bargain this fall.

Sen. Lindsey Graham (R-S.C.) said, “I think governing is over for him. I think he’s no longer in the governing mode.

“He’s 24/7 candidate Obama, and he’s going to have to run against something, because he ain’t going to run on his record. He better run against something else,” said Graham. 

House Assistant Leader James Clyburn (D-S.C.), a member of the supercommittee, said he supports a big savings plan but isn’t sure where the president is. 

“I’m a $4 trillion guy,” he said. 

Asked if Obama is still pushing strongly for a grand bargain, Clyburn said: “I don’t know.” 

A White House spokesman referred The Hill to the president’s recommendation to the supercommittee in September, which would reduce the deficit by nearly $3 trillion over the next decade. The proposal included more than $300 billion in cuts to Medicare and Medicaid. 

On Thursday, 33 Republicans released a public letter to the supercommittee urging it to report a deficit-reduction deal large enough to balance the budget in 10 years. The Republicans also demanded the package include comprehensive tax reform and no net tax increase. A source familiar with the supercommittee negotiations, however, said there is not enough time to reach agreement on comprehensive tax reform. 

GOP, Dems crafting ‘Plan B’ strategy

 Meanwhile, a group of Republican senators met with Senate Democrats and a bipartisan group of House members Thursday morning to plan a public education campaign to push for a major deficit-reduction package from the supercommittee.  

“There’s an education campaign that needs to be done with the American people,” said Sen. Saxby Chambliss (R-Ga.), who attended the meeting. 

Sens. Mike Crapo (R-Idaho), Tom Coburn (R-Okla.), Bob Corker (R-Tenn.), Mike Johanns (R-Neb.), Dick Durbin (D-Ill.), Mark Warner (D-Va.) and Michael Bennet (D-Colo.) also attended the meeting. 

Lawmakers said they discussed setting up a bipartisan communications campaign. One scenario envisioned Republicans and Democrats teaming up to form small communications teams, according to one participant. 

House Minority Whip Steny Hoyer (D-Md.) was one of several House lawmakers, including Reps. Heath Shuler (D-N.C.) and Jim Cooper (D-Tenn.), who attended the meeting. Hoyer’s presence signals that he could be drifting from House Minority Leader Nancy Pelosi’s (D-Calif.) opposition to entitlement reform. Hoyer, who is well-regarded by congressional Republicans, said in September that everything should be on the table.

The senators who attended Thursday’s meeting support the work of the Gang of Six, which called for substantial reforms to Medicare, Medicaid and Social Security. 

The lawmakers also discussed setting the groundwork for a Plan B in case the supercommittee fails to produce a meaningful deficit-reduction plan by its Nov. 23 deadline. The consensus among them is that a $1.2 trillion deal would not be sufficient to improve the long-term budgetary outlook. 

“We’re asking them to do the impossible in a short amount of time,” said Rep. Ron Kind (D-Wis.), who attended the meeting. 

He said there is a high chance the panel falls short of the $4 trillion mark that he and many of his colleagues support. 

“We have to prepare for that eventuality. While we want to do everything to support the committee, we’re running out of time,” he said. 

Lawmakers discussed the possibility that they might need to continue the campaign for a major deal if the supercommittee deadlocks. 

“There’s nothing to prevent us from picking up where they left off and moving forward,” Kind said. “The senators recognize that if they pull up short, it shouldn’t end.”