Tuesday, July 19, 2011

U.S. House Set to Pass Doomed Spending-Cut Bill With No Debt Deal Imminent

Analysis: McConnell plan may be reckoning for Republicans

Senate Republican leader Mitch McConnell (R-KY) speaks following the Senate Republican Annual Issues Meeting on Capitol Hill in Washington, January 6, 2011. REUTERS/Jim Young

WASHINGTON | Tue Jul 19, 2011 
(Reuters) - Senator Mitch McConnell's plan to avert an imminent U.S. debt default could lead to a day of reckoning for his Republicans as they weigh the prospect of fiscal disaster against the demands of Tea Party activists.
With other efforts to raise the federal government's debt ceiling at a standstill, McConnell's "Plan B" to avoid default is increasingly seen as "Plan A" in Washington.
The proposal by the top Republican in the Senate would dump the task into the laps of President Barack Obama and his Democrats, forcing them to back a $2.4 trillion increase in borrowing before the November 2012 elections as recession-weary voters worry about the country's growing mountain of debt.
Pinning the debt increase on Obama and the Democrats could help McConnell pick up the four seats needed to win Republican control of the Senate and further his stated goal of making Obama a one-term president.
It also may ensure his party avoids getting blamed for an August 2 default that could push the United States back into recession and upend financial markets across the globe.
Surprisingly, Democrats have embraced the plan as the best possible way to get an increase in the debt ceiling through a divided Congress.
Obama could also turn the situation to his advantage.
"Obama's answer (could be) that Republicans in Congress didn't step up and deal with this so I'm making the tough decisions and showing leadership," said Jennifer Duffy, an analyst with the Cook Political Report.
The Democratic-controlled Senate is expected to pass the McConnell measure if it comes up for a vote this week, but prospects are less certain in the Republican-controlled House of Representatives.
The plan would allow Obama to raise the debt ceiling without the deep spending cuts Republicans have sought. Activists from the fiscally and socially conservative Tea Party movement, who helped Republicans win control of the House last year, wonder if they will get another chance.
"It undermines the ideology that led Republicans to win in the first place," said Ryan Hecker of Contract from America, a Tea Party group. "What McConnell is doing is basically giving up."
Such rhetoric carries less weight in the Senate. Tea Party activists arguably prevented Republicans from winning control of that chamber in last year's congressional elections by forcing the party to back inexperienced, erratic candidates over more electable choices in several races.
McConnell's politics have shifted to the right since he entered politics in the 1960s but his primary concern is his party as an institution, said John David Dyche, a lawyer and McConnell biographer.
"McConnell is a Republican leader more so than a conservative leader," Dyche said.
That is a problem for Tea Party activists who put ideology first.
"He is a typical politician and is living proof of the maxim 'Our nation was designed by geniuses and run by idiots'," said Judson Phillips, founder of Tea Party Nation, one of the movement's biggest groups.
The Tea Party agenda will be front and center this week in Congress.
The House will vote on Tuesday on a plan that would make a debt-ceiling increase conditional on deep spending cuts, firm caps on future spending and congressional passage of a balanced budget amendment to the Constitution.
That bill is expected to fall short in the Senate. The balanced-budget amendment also is likely to fail in the Senate, sparing Republicans a possibly embarrassing vote in the House, where it could also fall short of the two-thirds majority needed for passage.Read more...

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