Debt limit gives GOP leverage; Obama demands fix

The government is on track to hit its $16.4 trillion borrowing limit later this month. And while the Treasury can keep the government functioning through early next year, President Barack Obama is bluntly insisting that any deal on the fiscal cliff include an end to brinkmanship on the debt ceiling.

Obama is demanding tax rate hikes on the rich, using the prospect of a worse alternative and the momentum of his re-election as leverage. But the debt ceiling gives Republicans a powerful weapon to extract further deficit reduction too, contributing to the stalemate.

Speaking to corporate executives on Wednesday, Obama set down a hard line.

"If Congress in any way suggests that they're going to tie negotiations to debt ceiling votes and take us to the brink of default once again as part of a budget negotiation - which, by the way, we had never done in our history until we did it last year - I will not play that game," Obama said.

"Because we've got to break that habit before it starts," he said.

To that end, Obama is asking to make permanent a mechanism used to implement last year's $2.2 trillion debt limit hike. That mechanism, designed by Senate Minority Leader Mitch McConnell, R-Ky., requires the president to notify Congress of the need to lift the debt ceiling and request an increase in the borrowing cap. The request would not require congressional approval, but Congress could pass a resolution to disapprove the increase, and the president could veto any such move.

McConnell called Obama's proposal "a power grab that has no support here."

"It gives the president of the United States unilateral power to raise the limit on the federal credit card, the so-called debt ceiling, whenever he wants, for as much as he wants," McConnell said.

Senate Majority Leader Harry Reid, D-Nev., sought a vote on the president's debt limit proposal Thursday but was blocked by McConnell, who objected to subjecting the idea to a simple majority tally instead of the 60 votes typically required to pass controversial legislation. But Democrats pointed out that McConnell had pressed for a vote just Thursday morning and had introduced the measure.

"The minority leader filibustered his own bill," said Sen. Charles Schumer, D-N.Y.

Last year, Republicans agreed to the debt ceiling scheme only after the White House agreed to steep cuts in spending that virtually matched the increase in the debt ceiling, a deal Obama is not offering this time.

Obama has the support of John Engler, the former Republican governor of Michigan and now president of the Business Roundtable.

Source: http://www.tulsaworld.com/site/articlepath.aspx?articleid=20121207_13_A7_ULNSbC91370&rss_lnk=16

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