McConnell warns GOP: Don’t help re-elect Obama

From left, Pres­i­dent Barack Obama, Sen­ate Major­ity Leader Harry Reid of Nev., Sen­ate Minor­ity Leader Mitch McConnell of Ky., cen­ter, and Sen­ate Major­ity Whip Richard Durbin of Ill., meet in the Cab­i­net Room of the White House in Wash­ing­ton Wednes­day regard­ing the debt ceil­ing. (Asso­ci­ated Press | Charles Dharapak)

ANDREW TAYLOR

DAVID ESPO

Asso­ci­ated Press

WASHINGTON — Fail­ure to raise the U.S. debt limit would prob­a­bly ensure Pres­i­dent Barack Obama’s re-election in 2012, Sen­ate Repub­li­can leader Mitch McConnell warned fel­low con­ser­v­a­tives on Wednes­day, fresh evi­dence of deep GOP polit­i­cal divi­sions on an issue of para­mount impor­tance to the nation and its economy.

McConnell spoke before Obama and con­gres­sional lead­ers met pri­vately at the White House for a fourth straight day — they broke up after a lit­tle over two hours — strug­gling to avert an unprece­dented gov­ern­ment default threat­ened for Aug. 2.

At the same time, Moody’s Investors Ser­vice announced it was review­ing the U.S. bond rat­ing for a pos­si­ble down­grade, a change that could lead to higher inter­est rates for many Amer­i­cans. Moody’s cited a “ris­ing pos­si­bil­ity that the statu­tory debt limit will not be raised on a timely basis.”

At the Capi­tol, rank-and-file law­mak­ers advanced their own fall­back mea­sures in case the bipar­ti­san com­pro­mise talks fail.

One ver­sion, authored by Sen. Bill Nel­son, D-Fla., was designed to make sure Social Secu­rity ben­e­fits are paid on time. Another, unveiled by a trio of House con­ser­v­a­tives, would give pri­or­ity to pay­checks for mem­bers of the armed forces.

“Cur­rently, there is not a sin­gle debt limit pro­posal that can pass the House of Rep­re­sen­ta­tives,” House Major­ity Leader Eric Can­tor, R-Va., said in a writ­ten state­ment. He said efforts should focus on “what we can agree upon” rather than Demo­c­ra­tic demands for rais­ing taxes or GOP calls to repeal the year-old health care bill.

With­out an increase in gov­ern­ment bor­row­ing author­ity by Aug. 2, Trea­sury Sec­re­tary Tim Gei­th­ner has warned, there could be a default pos­ing a cat­a­strophic risk to the econ­omy, still recov­er­ing from the worst reces­sion in decades.

In a sober­ing reminder of the stakes, the Trea­sury Depart­ment announced that the fed­eral deficit was on pace to exceed $1 tril­lion for the third con­sec­u­tive year, and was likely to top last year’s $1.29 trillion.

Moody’s released its announce­ment after the U.S. finan­cial mar­kets had closed for the day, and cited fears of a default on U.S. Trea­sury debt oblig­a­tions. Six weeks ago, the firm had announced that a rat­ing review would be likely in mid-July unless there was mean­ing­ful progress in nego­ti­a­tions to raise the debt limit.

In a radio inter­view on the Laura Ingra­ham Show, McConnell pre­dicted that if Con­gress fails to act, Obama will argue “that Repub­li­cans are mak­ing the econ­omy worse and try to con­vince the pub­lic, maybe with some merit, if peo­ple start not get­ting their Social Secu­rity checks and mil­i­tary fam­i­lies start get­ting let­ters say­ing their ser­vice peo­ple over­seas don’t get paid.”

“You know it’s an argu­ment he has a good chance of win­ning, and all of a sud­den we (Repub­li­cans) have co-ownership of a bad econ­omy. That is a very bad posi­tion­ing going into an elec­tion,” he said.

McConnell said his first choice was to reach a good com­pro­mise with Obama.

Short of that, “my sec­ond oblig­a­tion is to my party … to pre­vent them from being sucked into a hor­ri­ble posi­tion polit­i­cally that would allow the pres­i­dent prob­a­bly to get re-elected because we didn’t han­dle this dif­fi­cult sit­u­a­tion correctly.”

At least in part, McConnell’s com­ments were a rebut­tal to con­ser­v­a­tives who crit­i­cized his pro­posal on Tues­day to let Obama raise the debt limit with­out a vote of Congress.

Pres­i­den­tial hope­ful Newt Gin­grich called that idea an “an irre­spon­si­ble sur­ren­der to big gov­ern­ment, big deficits and con­tin­ued over­spend­ing,” and Ingra­ham said she had received emails from con­ser­v­a­tive lis­ten­ers liken­ing McConnell to Pon­tius Pilate.

The Repub­li­can law­maker brushed aside the bib­li­cal ref­er­ence. But with­out men­tion­ing Gin­grich by name, he referred to two gov­ern­ment shut­downs of 1995 that the one-time House speaker engi­neered in hopes of win­ning deep spend­ing cuts from a Demo­c­ra­tic president.

The tac­tic back­fired polit­i­cally on Gin­grich and the Repub­li­cans, and ben­e­fited Pres­i­dent Bill Clinton.

A decade and a half later, some Repub­li­cans have set out on what could be a sim­i­lar course on the debt limit, demand­ing huge deficit cuts — and no tax increases — as the price for approv­ing an increase in bor­row­ing authority.

Some Democ­rats couldn’t resist the temp­ta­tion to jab at them.

“You have the Repub­li­cans who walked out of the Biden talks. You have the speaker of the House who’s close to enter­ing into a frame­work agree­ment with the pres­i­dent of the United State walk out because other Repub­li­cans in the House under­cut him,” said Rep. Chris Van Hollen, D-Md., a par­tic­i­pant in the talks led by Vice Pres­i­dent Joe Biden.

“And now you have Repub­li­cans trash­ing a pro­posal put for­ward by the Repub­li­can leader in the Senate.”

Despite an extra­or­di­nary com­mit­ment of time, the pri­vate talks at the White House have made lit­tle if any progress since Obama presided the first ses­sion on Sunday.

House Repub­li­cans said they would press the pres­i­dent in Wednesday’s meet­ing to out­line a deficit-prediction plan of his own.

Obama has said he is will­ing to take crit­i­cism from within his own party over pro­gram cuts in order to achieve a sig­nif­i­cant reduc­tion in future deficits. But he also wants higher taxes that Repub­li­cans at the table say are unacceptable.

In advance of the day’s meet­ing, offi­cials said the nego­tia­tors would prob­a­bly turn their atten­tion to cuts that had been pro­posed in the ear­lier nego­ti­a­tions in the Capi­tol led by Biden. Par­tic­i­pants in those talks dis­agree about pre­cisely how much they had agreed to, how­ever, and it was unclear what the prospects were for agreement.

With hopes for a bipar­ti­san deal dimmed, backup pro­pos­als proliferated.

Sen­ate Major­ity leader Harry Reid, D-Nev., has not rejected McConnell’s pro­posal, and offi­cials say he is devel­op­ing one of his own to cre­ate a com­mis­sion that could rec­om­mend deficit cuts and be assured that Con­gress would vote on them.

Nelson’s pro­posal was designed to ensure that Social Secu­rity recip­i­ents receive their checks in the event of a default, man­dat­ing that the program’s oblig­a­tions no longer count against the over­all debt limit.

He acted one day after Obama cau­tioned that he could not guar­an­tee the checks would go out if there was a default.

On the other side of the Capi­tol, Repub­li­can Reps. Steve King of Iowa, Louie Gohmert of Texas and Michele Bach­mann of Min­nesota, a pres­i­den­tial can­di­date, said if the debt ceil­ing is reached, the Trea­sury should fund pay any allowances for mem­bers of the Armed Forces first and oblig­a­tions on the pub­lic debt sec­ond, ahead of all other expenses.

Con­gres­sional Repub­li­cans have had a rel­a­tively muted response to McConnell’s debt limit pro­posal. Pri­vately, though, con­ser­v­a­tive law­mak­ers have been crit­i­cal, accus­ing him of giv­ing up the lever­age the GOP has to force Obama into mak­ing deep spend­ing cuts as the price for an increase in the debt limit.

Posted by AP News on Jul 13 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.