WASHINGTON (AP) — Budget talks between President Barack Obama and his GOP rivals are at a frustrating standstill, leading a top Republican to launch a long-shot proposal to give Obama sweeping new powers to muscle through an increase in the government's debt limit without the approval of a bitterly divided Congress.
Lawmakers return to the White House for another
negotiating session Wednesday. A two-hour session Tuesday produced no progress
after a day of poisonous exchanges between Democrats and Republicans.
Saying he didn't see a path to an agreement so long
as Democrats insist on revenue increases, Senate GOP leader Mitch McConnell of
Kentucky offered a backup plan that would, in effect, guarantee Obama requests
for new government borrowing authority unless Congress musters veto-proof
majorities to deny him.
McConnell's plan immediately ran into stiff
opposition among tea party conservatives and seemed unlikely to pass the House,
but neither the White House nor House Speaker John Boehner, R-Ohio, dismissed
it out of hand.
"I think everybody agrees there needs to be a
backup plan if we can't come to an agreement," Boehner said in a Fox News
Channel interview Tuesday afternoon. "And frankly, I think Mitch has done
good work."
Under McConnell's proposal, 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 coming 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. But the
president's spending would have no guarantee of receiving a vote.
"The American people elected (McConnell) to
serve as a check on Obama's appetite for out-of-control spending, not to write
him a blank check to continue the binge," said conservative activist Brett
Bozell. "It's these sort of shenanigans that got Republicans thrown out of
power in 2006."
McConnell made his proposal public 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 possible financial crisis.
Democratic officials who participated in the
session said Obama did not reject McConnell's idea, but said it's not his
preferred approach. A statement issued later by press secretary Jay Carney said
the president "continues to believe that our focus must remain on seizing
this unique opportunity to come to agreement on significant, balanced deficit
reduction."
McConnell's plan was hatched out of frustration
that Congress and Obama are deadlocked as the clock ticks toward an Aug. 2
deadline for a market-rattling default on U.S. obligations.
"I had hoped all year long that the opportunity
presented by his request of us to raise the debt ceiling would generate a
bipartisan agreement that would begin to get our house in order,"
McConnell said. "I still hope it will. But we're certainly not going to
send a signal to the markets and the American people that default is an
option."
Republicans are demanding $2 trillion-plus in
budget cuts as the price for a commensurate increase in the government's
ability to continue to borrow more than 40 cents of every dollar it spends.
Both Republicans and Obama see the politically toxic debt limit vote as a way
to seize an opportunity to cut future deficits — a move that would seem to be
to the political benefit of both sides.
But GOP refusals to consider devoting any new
revenue from closing tax loopholes — like those enjoyed by oil and gas
companies — to cutting the deficit has led Democrats to withhold further
spending cuts beyond a handful tentatively agreed to during several weeks of
talks led by Vice President Joe Biden in May and June. For their part,
Republicans say the White House is offering minuscule spending cuts in the near
term and is pulling back from some tentative agreements on topics like
requiring federal workers to contribute more to their pensions.
Obama himself upped the stakes Tuesday, telling CBS
News anchor Scott Pelley that more than $20 billion in Social Security checks
could be held up.
"I can't guarantee that the checks will go out
Aug. 3 if we haven't resolved this," Obama said. "There may simply
not be the money in the coffers to do it."
Copyright 2011 The Associated Press.
