WASHINGTON — With compromise talks at a vituperative standstill, Senate Republicans unexpectedly offered Tuesday to hand President Barack Obama new powers to avert a first-ever government default threatened for Aug. 2.
Under a proposal outlined by Sen. Mitch McConnell of Kentucky, Obama could request — and likely secure — increases of up to $2.5 trillion in the government’s borrowing authority in three separate installments over the next year, as long as he simultaneously proposed spending cuts of greater size.
The debt limit increases would take effect unless blocked by Congress under special rules that would require speedy action — and even then Obama could exercise his authority to veto such legislation. Significantly, the president’s spending cuts would be debated under normal procedures, with no guarantee they ever come to a final vote.
The White House had no immediate reaction to the proposal, which came a few hours before Obama presided over his third meeting in as many days with congressional leaders searching for a way to avoid a default and ensuing financial crisis.
In an interview on CBS taped before the meeting, Obama said that without a deal to raise the debt limit, he could not guarantee that Social Security checks will be issued on Aug. 3 “because there may simply not be the money in the coffers to do it.”
In essence, McConnell’s proposal would greatly enhance Obama’s authority to avoid a default, while also virtually absolving Republicans of responsibility if one occurred.
At the same time, it would allow Republican lawmakers to avoid having to support an increase in the debt limit, something many of them find odious.
“Republicans will choose a path that actually reflects the will of the people, which is to do the responsible thing and ensure the government doesn’t default on its obligations,” McConnell said in a speech on the Senate floor. He also excoriated the administration for seeking tax increases along with spending cuts as part of an agreement to raise the debt limit, adding that as long as Obama is president “a real solution is unattainable.”
House Speaker John Boehner, R-Ohio, praised McConnell for doing “good work” with his recommendation but, in an interview on Fox News, did not endorse it.
At the same time, Boehner said he believed Obama was trying to reach a compromise on deficit cuts, “but their insistence on raising taxes is preventing us from getting there.”
The talks have revolved around attempts to meet Republican demands for deficit cuts at least as large as any increase in the debt limit. Negotiators have grown testy in recent days as Obama and Democrats pushed for higher tax revenue as part of the deal, a line Republicans say they will not cross.
It was unclear whether McConnell’s proposal could show the White House and congressional leaders of both parties a way out of a deadlock that Obama and others said threatened calamitous results for an economy still struggling to recover from the worst recession in decades.
It would obligate Obama to outline deep spending cuts, something Republicans have been trying to force him to do for months without much success.
Reductions as large as $2.5 trillion would almost certainly affect domestic programs seen as important by Democratic constituencies and by rank-and-file lawmakers, possibly including Medicare and Medicaid. Even if the cuts never took effect, Republicans would be able to call for votes, while identifying them as sponsored by the White House.