Reid played key role on debt bill before Obama nixed plan

Aides to Senate Majority Leader Harry Reid worked closely over the weekend with staff for House Speaker John Boehner and Senate Minority Leader Mitch McConnell on a bill to resolve the debt-ceiling standoff — until Reid pulled out after meeting with President Obama at the White House Sunday.

“He and his staff were writing the bill with us,” says a senior Republican.  “We were still working on it by the time he got back from the White House.”  Asked whether Reid and his staff were fully involved in the work, the senior Republican replied, “edit after edit after edit.”  A key GOP aide confirmed the account.

But the GOP bill to cut spending and raise the debt ceiling, which would avert the coming default crisis, would also require at least one more debt increase before the 2012 election, and the president, working hard for re-election, does not want to deal with the issue again before November 2012.  After consulting with Obama Sunday evening, Reid's willingness to work with the GOP disappeared.  (The White House has all along blamed Republicans for blowing up the talks.)

“I think Reid wants to get this done,” says the senior Republican.  “The problem is, the White House is so far out on a limb on vetoing anything that doesn't get Obama through the 2012 election that it's now kind of personal.”  For Reid to keep working with the GOP would be a slap at the president and leader of the Democratic party — a virtually impossible scenario for the Majority Leader.

So with the debt deadline still approaching, what does Reid do now?  He is said to be working on his own bill, which will include a reported $2.7 trillion in cuts, made up mostly of what Republicans call “paper savings” from the wars in Iraq and Afghanistan.  (Those “paper savings” involve counting money that was never going to be spent on those wars as new spending cuts.)  It's not clear whether Reid will introduce his own bill or try to attach it to something else.

But Republicans believe the entire dynamic on Capitol Hill will be changed if the House passes an actual bill to cut spending and raise the debt ceiling.  “Then it's not a theoretical exercise any more,” says the senior Republican.  At that point, Reid will have more options.  “He has to publicly oppose it,” the Republican says.  “But privately, he might not go out of his way to kill it.”

Barack ObamaBeltway ConfidentialHarry ReidUS

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