Treasury details 'McConnell Provision' on raising debt limit

The Treasury Department fleshed out the White House's push to take control of the debt limit as part of a deal to avoid the "fiscal cliff" Wednesday.

The Treasury is billing this arrangement as the "McConnell Provision," after the agreement coming out of the last debt limit fight — much to the chagrin of Senate GOP leadership.

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Under the White House proposal, which has been rejected out of hand by congressional Republicans, the president would have the ability to notify Congress of a pending hike to the debt limit whenever the government comes within $100 billion of the current borrowing cap. Congress would then have the opportunity to pass a resolution disapproving of the pending hike, otherwise the increase will go through automatically.

Even if a disapproval resolution is passed, the president would have the power to veto it, meaning a two-thirds majority of Congress would be needed to block any increase — long odds in any Congress.

Treasury Secretary Timothy Geithner contends this new structure could defuse future debt-limit standoffs that could roil markets and upset credit-rating agencies, while continuing to give Congress a voice on this fiscal front.

The Treasury described the idea as coming from Senate Minority Leader Mitch McConnell (R-Ky.) during the debt-limit standoff of August 2011. Under that agreement, the president had the ability to request three hikes to the debt limit in writing, and Congress would have to disapprove of it by a veto-proof margin to block it. All three attempts to do so failed.

McConnell's office disputed the Treasury's characterization of the proposal as essentially one coming from the Senate's top Republican, describing it instead as an unchecked a "power grab" by the administration because the original agreement came after the White House agreed to specific spending cuts in exchange for limited control over raising the debt ceiling.

"While we're certainly flattered that the administration praised one piece of the Budget Control Act, they seem to have amnesia on the rest of the plan. Namely, the debt ceiling was raised last year only after the White House agreed to at least $2 TRILLION in cuts to Washington spending, and agreed to be bound by the timing and amount set by Congress — not his own whim," said Don Stewart, McConnell's spokesman.

"The President wants to have the ability to raise the debt ceiling whenever he wants, for as much as he wants, with no responsibility or spending cuts attached."