Conservatives are debating whether Minority Leader Mitch McConnell’s floated fall-back position is a good idea. A long-time reader offers these thoughts:
Mitch McConnell went on Laura Ingraham’s show today to defend his “contingency plan” in the debt ceiling negotiations. Most Power Line readers know the basics of that plan. In short, McConnell proposes that, if no good deal can be reached (and he plainly doubts that one will), the president be authorized to seek from Congress an increase in the debt limit of $700 billion, provided that he also presents a plan to reduce spending by a greater amount. At that point, the debt ceiling would be raised by $100 billion, as breathing room in the face of the August 2 default deadline.
Resolutions of disapproval of the president’s plan would then be presented. If either the Senate or the House defeated the resolution of disapproval, Obama would be granted his increase in the debt ceiling. If neither house defeated the resolution, Obama could still veto it. In the event of a veto, a two-thirds majority would be required in both chambers to override it. In practice, this means the veto would stand and Obama would get his increase and his cuts.
The same basic process would be repeated on two subsequent occasions, once in the fall of 2011 and once in the summer of 2012.
McConnell defended this plan as a fallback position in order to avoid enabling Obama to make the Republicans partners in a bad economy. How convincing is this defense?
Republicans certainly don’t want “co-ownership” of a bad economy. And they could be stuck with it if a default occurred and if that default dealt the economy more than a very temporary blow.
But late in the Ingraham interview, McConnell undercut his own argument by stating that there will be no default that produces dire economic consequences (“the U.S. reneging on its credit for the first time in history isn’t going to happen”). His real concern, he made clear, is that Republicans will be “enticed” to agree to some form of tax increase to avert the default. This would make Republicans “tax collectors” for the Obama administration.
McConnell raises a genuine concern, at least for those conservatives who aren’t willing to accept the closing of questionable tax loopholes. But this concern is distinct from his original rationale of not taking co-ownership of the economy. Obama will continue to own the economy absent a default that adds to our economic woes. Perhaps McConnell’s real, but unstated, concern is that a critical mass of Republicans actually is willing to permit a default.
Finally, McConnell may be overlooking another political consideration. The Democrats’ main hope for victory in 2012 (other than an economic revival in the nick of time) is to portray themselves as the defenders of Medicare and Social Security. But if the Republicans can “entice” the Democrats into a certain amount of entitlement reform as part of a deal to avoid default, the Dems may find it difficult convincingly to paint that portrait.
Whether the Democrats can be so enticed remains to be seen. I fear that by putting his contingency plan on the table at this relatively early date, McConnell may have reduced the Republicans’ ability to drive that sort of hard bargain.