House Republicans and Senate Democrats sped forward Monday on their collision course over the debt ceiling, with the debate likely to come to a head this weekend, just days before the August 2 deadline when the United States is scheduled to begin defaulting on its debts.
The two chambers are scheduled to move forward this week on competing plans offered by House Speaker Rep. John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev. The two plans outlined on Monday share few similarities, have been denounced by the other chamber, and offer little obvious hope for the two chambers to resolve the differences in conference and send legislation to President Obama before next Tuesday's deadline. Despite the heightened stakes, leaders on both sides reiterated their view that default would not ultimately occur.
The House Republican plan, as outlined in a background briefing by GOP aides because legislative text has not yet been released, would offer an immediate $1 trillion raise in the debt ceiling tied to legislation that includes still-undefined discretionary spending caps aimed at reducing spending by $1.2 trillion over 10 years. The $1 trillion stopgap increase would carry the U.S. until early 2012-forcing another vote in an election year, which the White House is seeking to avoid.
The House bill would then create a bipartisan, bicameral joint committee made up of 12 lawmakers who would be charged with finding $1.6-$1.8 trillion in savings through whatever means they determine by November 23. If a majority of the committee approves the deficit reduction proposal, their recommendations would be fast-tracked through both chambers, with no amendments allowed, and protected by an up-or-down majority vote by December 23.
If and when the package is enacted, there would be a symbolic congressional authorization to the president to request a second debt limit increase not to exceed what the committee has enacted, meaning no more than $1.5 trillion, which would then push the debt limit into early 2013. The process for his request would be similar to a scheme first introduced by Senate Minority Leader Mitch McConnell, R-Ky., that would have Congress vote on a resolution of disapproval in a political gesture to put the pressure on Democrats in the vote.
The GOP plan also requires the House and Senate to vote on a Balanced Budget Amendment by the measure after October 11, but before the end of the year. It does not require that the measure be passed by the two-thirds majority required for a constitutional amendment-a sticking point for many fiscal conservatives.
The plan, of course, is riddled with potential problems that offer no surer path to avoid default than the previous failed attempts. The White House is opposed to the two-step, short-term solution, and Boehner's right flank could be potentially hostile to the idea of an enhanced super-committee charged with coming up with a proposal that the rank-and-file would have no ability to amend. A GOP aide made it clear that no Republican lawmakers appointed to the committee would support tax increases, but that suggests the same problems that have dogged this debate will occur again in short order-a signal that could rattle the markets already wary of the U.S. government's ability to solve long-term fiscal problems.
"A short-term solution is no solution at all," Reid said on the Senate floor, arguing that markets "need certainty" that Boehner's six-to-eight-month increase would not provide. Reid is offering a counterproposal that would raise the debt ceiling past the 2012 elections and include a plan for $2.7 trillion in spending cuts. He was expected to outline the plan in detail later on Monday and brief the Democratic Caucus in the evening.
The two chambers could vote as early as Wednesday on their competing proposals, making a weekend session all but certain. The House is expected to vote on Wednesday, but a GOP leadership aide said the vote would be contingent on the Congressional Budget Office scoring the bill. "Our members won't vote on it without a score," the aide said.