The "Plan B" Debt Limit Proposal
On July 14, Senate Minority Leader Mitch McConnell proposed a “contingency plan” that would authorize a $2.5 trillion increase in the debt limit (in three installments) in exchange for White House commitments to a certain level of cuts. Working since then with both Democratic and Republican leaders, Senator McConnell and Majority Leader Harry Reid have created a package that includes $1 trillion in cuts to discretionary programs, and a process for figuring out reforms in entitlement programs over the next year or so. The plan would start with an automatic $100 billion increase in the debt ceiling, to give the President and Congress time to act on the remainder of the package. This plan, augmented by some of the ideas proposed by the Gang of Six, may form the core of a plan that White House and Senate negotiators eventually offer.
In the House, while Speaker John Boehner supported the more drastic Cut, Cap and Balance plan which passed the House on Tuesday July 19, he has recognized publicly that Congress needs a “plan B” to ensure that the debt ceiling is increased in a timely way. On July 20, 80 conservative representatives sent a letter to Boehner urging him not to bring the McConnell-Reid compromise to House floor for a vote. Meanwhile, Majority Leader Reid is planning to bring the measure to the Senate floor early next week.