Minority Leader Mitch McConnell, R-Ky., can call it whatever he likes, but the only thing that really matters about the plan he unveiled yesterday is that it allows President Obama to borrow $2.5 trillion without forcing him to make any spending cuts. This is exactly what Obama has been asking for since January. That is why The New York Times endorsed the McConnell plan today under the header “A Pathway Out of the Debt Crisis.”</p>
The McConnell proposal, which the White House has called a “active option,”, could potentially force vulnerable Senate Democrats to vote in favor of raising the debt limit four times (once for the initial transfer of authority, and then once for each of the three debt hike installments). But it would also force all Republicans to vote for a debt hike once. They would be forced to sound like Sen. John Kerry, D-Mass., “I voted for the debt hike before I voted against it.”
And McConnell’s claim that his plan would force Obama to identify real spending cuts is, at best, naive. Once the authority to raise the debt limit is transferred to Obama, the only check on his power is a two-thirds veto. There is nothing stopping Obama from submitting a vague plan with no real spending cuts identified. The only recourse Republicans would have, would be to convince enough Democrats to override Obama and send the country into default. That would never happen.
The Wall Street Journal editorial board also endorsed the McConnell proposal this morning writing: “The entitlement state can’t be reformed by one house of Congress in one year against a determined President and Senate held by the other party. It requires more than one election.” The McConnell plan clearly takes that long view. It would deny Obama a victory on taxes and debt reduction and it would prevent another stimulus plan.It would give him next to nothing to run on in 2012.
The McConnell debt hike is not the worst outcome of the debt limit negotiations, but its proponents should not oversell its benefits either.
Around the Bigs
The Washington Examiner, McConnell offers ‘last choice option,’ blindsiding House GOP: House Republicans were completely blindsided by McConnell’s debt limit compromise yesterday. A GOP aide tells The Examiner: “There is universal sentiment in the House Republican circles that we’ve just been given a swift kick in the political gut. If there were a way for a proposal to be more than dead on arrival, this would be it.”
CBS News, Obama says he cannot guarantee Social Security checks will go out on August 3: Obama told CBS News: “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it.” Notice he did not say that Treasury does not have the money. That would be easily verifiably false. Instead he said the money “may” not be there. This is a blatant effort to scare seniors about the debt limit.
The Wall Street Journal, Cuts Would Only Shift Health-Care Costs: The $350 billion in Medicare and Medicaid cuts identified by House Majority Leader Eric Cantor, R-Va., for deficit reduction this week, would only shift the cost of health care to states and individuals. Hospitals and other medical providers would simply force private sector clients to pay more to make up for the lost revenue from the government.
The Wall Street Journal, Budget Solution: Squeeze the Middle: Budget deficits are so large, The Journal reports, that if taxes are used to close them, “There simply isn’t enough income at the top to tax, nor enough spending on people at the bottom to cut.”
The Hill, Republicans want records from Justice officials about botched gun operation: Sen. Chuck Grassley, R-Iowan, and Rep. Darrell Issa, R-Calif., have sent a letter to Attorney General Eric Holder requesting all communication records from 12 senior officials with the Department of Justice relating to Operation Gunrunner.
The Wall Street Journal, Employers Lobby to Weaken Insurance Mandate: The nation’s largest employers are lobbying the Internal Revenue Service for favroable rulings on what counts as a “full-time worker” and “affordable insurance” under Obamacare. Employers say they can’t calculate how much an employee spends on health care without asking them how much their spouses or dependents earn – a potential privacy violation that is not be verifiable, either.
The Los Angeles Times, Janice Hahn wins House seat: Los Angeles City Council Democrat Janice Hahn defeated Republican businessman Craig Huey 54.6 percent to 45.4 percent in yesterday’s California 36 special election.
Obama: In a web-video sent to supporters via email, Obama reelection campaign manager Jim Messina announced that the president had raised $47 million in the second quarter of this year. That is more than the entire GOP field combined.
Paul: Rep. Ron Paul, R-Texas, announced he will not seek reelection to the House yesterday. Instead, he will focus entirely on his presidential campaign.
Romney: Former-Massachusetts Gov. Mitt Romney spokeswoman Andrea Saul announced yesterday that Romney would not be signing the The Family Leader’s marriage pledge. Saul told the AP that Romney “strongly supports traditional marriage,” but that the oath “contained references and provisions that were undignified and inappropriate for a presidential campaign.” Rep. Michele Bachmann, R-Minn., has already signed the pledge. Former-Minnesota Gov. Tim Pawlenty is undecided.
James Pethokoukis posts a graph from a Goldman Sachs report showing that the Treasury Department has more than enough cash and incoming revenue to make all interest, Social Security, Medicare, and “essential” defense payments without a hike in the debt limit. His takeaway: “The issue isn’t default but government shutdown.”
The Washington Examiner‘s Michael Barone points to evidence that illegal immigration from Mexico is slowing and calls for a new direction in immigration policy: “It seems clear that tougher enforcement measures, like requiring use of e-Verify, can reduce the number of illegals in the United States. … we can shift our immigration quotas to more highly skilled immigrants.”
In The Washington Post, Kansas Secretary of State Kris Kobach defends Voter ID laws: “Photo IDs have become ubiquitous and unavoidable. You can’t cash a check, board a plane or drive without one. That is why it’s not unreasonable to require picture identification to protect our most important privilege of citizenship.”
Talking Points Memo is a huge fan of the McConnell debt hike. Under the header ” So Long, Supply-Side? McConnell Plan Gives Dems Big Opening On Taxes,” TPM’s Brian Beutler writes: “Yesterday’s development undermined the basic vision of the conservative movement: that decoupling taxes and spending would cause revenue and outlay arrows to diverge; and that when faced with the resulting unsustainable debt load, the country’s representatives, pushed by powerful interest groups, would keep the tax rates and scotch social programs. Choose the corporate state over the entitlement state. That didn’t happen.”
ThinkProgress counts that Newt Gingrich plugged his latest book six separate times at a recent “campaign” stop in Iowa.
Daily Kos‘ Joan McCarter explains why liberals believe Social Security is not adding to the federal deficit.