By Erik Wasson and Russell Berman - 06/22/11 12:50 AM EDT
Top lawmakers pushed back Tuesday against Senate Minority Leader Mitch McConnell’s suggestion that a short-term increase in the debt ceiling could be needed to buy time for reaching an agreement on entitlement reforms.
House Majority Leader Eric Cantor (R-Va.), a member of the deficit talks led by Vice President Biden, on Tuesday reiterated his preference for passing one large increase to the federal borrowing limit.
House Ways and Means Committee Chairman Dave Camp (R-Mich.) also shot down a short-term increase.
“It doesn’t give you certainty,” Camp said. “Ideally you’d like to get that settled and not have it continually a hanging-over issue.”
McConnell (R-Ky.) said over the weekend that Congress might need to pass a “very short-term” increase in the debt limit that would temporarily keep the government from defaulting after the Aug. 2 deadline set by the Treasury. He said talks on reforming entitlements could start back up in the fall if a small debt increase is approved.
Asked about McConnell’s idea, Senate Majority Leader Harry Reid (R-Nev.) said he agreed with Cantor that a long-term
increase is needed.
“Well, I think what he should do is talk to Rep. Cantor in the House. He said earlier today that short-term extension of the debt limit wouldn’t be good for the country. So he should talk to his Republican friend in the House, because I agree with Cantor,” Reid said.
House Minority Whip Steny Hoyer (D-Md.) concurred, saying a temporary increase would be “better than none — but ‘temporary’ continues to roil the markets.”
McConnell declined to call for a short-term increase in the debt ceiling when reporters asked him about it Tuesday.
“We are still hoping for a very large package that will impress the ratings agencies, impress foreign countries and astonish the American people that we’re actually going to come together here and take advantage of this terrific opportunity that’s provided by the president’s request of us to raise the debt ceiling,” McConnell said. “Beyond that I’m not prepared to go, because there are all kind of moving parts underneath those general principles.”
A GOP aide said McConnell’s statement over the weekend was meant to show that Republicans would not accept a bad deal in exchange for raising the debt ceiling. The aide acknowledged that it could be difficult to even pass a short-term increase in the House and emphasized that McConnell wants big cuts and a long-term deal.
Members of the Biden group met again Tuesday as they continued work on a package of fiscal reforms that could be paired with a more than $2 trillion increase in the debt limit.
Fellow negotiator Rep. Chris Van Hollen (D-Md.) said the group was “slogging” through the most difficult issues. He indicated there might have been a discussion of Medicare but would not provide details.
Cantor appeared to suggest some openness to small revenue increases such as eliminating corporate loopholes in exchange for substantial spending cuts. Democrats have been telling Cantor behind closed doors that they cannot sell a package to their caucus that does not close some tax loopholes.
Cantor pointed out that the revenue that would come from eliminating certain industry tax breaks would be minuscule compared to the trillions of dollars in savings the group is seeking.
“You look at the value of the so-called revenue savings or revenue enhancement there, versus what we’re talking about, trillions, you have to sort of wonder — is this about policy and substance, or is this about politics?” Cantor said.
Camp expressed opposition to revenue-raising changes in the tax code. Asked what revenue raiser would be the least harmful, Camp said he couldn’t “think of a least damaging place.”
Treasury Secretary Timothy Geithner, another member of the Biden talks, said that while he has “no doubt” the U.S. would avoid a default crisis this summer, the Biden group might not have the time to deal with the details on certain issues before the August deadline for raising the $14.3 trillion borrowing limit.
Reforming Medicare, Medicaid and the tax code could come after the August deadline, Geithner suggested.
Geithner also said that policy issues that could be riders in the budget — such as funding for the Environmental Protection Agency and the healthcare overhaul — would likely need to be examined within the regular congressional appropriations process.
“Our job is to figure out, given that reality, how we can do enough to make sure we can give people more confidence that this country is going to be able to live within our means over time,” Geithner said.
Bernie Becker and Mike Lillis contributed.