Latest Update On Debt Ceiling Melodrama

Time for the hourly update on the Congressional soap. The Hill reports that "Congressional Democratic leaders are headed back to the White House on Wednesday for more talks on raising the debt ceiling.  White House press secretary Jay Carney announced House and Senate Democratic would meet with Obama at the White House at 2:50 p.m. Obama called Senate Majority Leader Harry Reid (D-Nev.), Senate GOP Leader Mitch McConnell (Ky.), Speaker John Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-Calif.) on Tuesday night." It adds that after the release of a new proposal Tuesday by the bipartisan Senate Gang of Six, Obama told reporters it was time for leaders to "talk turkey" and work to reach a deal. And while there has been a recent increase in voices against the $3.7 trillion "plan", the fate of the McConnell fall back plan, which as expected is the most likely to pass as it is completely toothless, is also looking shaky:"House Democratic leaders are attacking Senate Minority Leader Mitch McConnell’s (R-Ky.) debt-ceiling fallback plan, characterizing it as a political ruse intended to scapegoat Democrats and taint them at the polls. “I’m not a fan of the McConnell proposal,” Rep. Chris Van Hollen (Md.), the senior Democrat on the House Budget Committee, said Tuesday during a press briefing in the Capitol. “It’s designed to protect mostly Republican members of Congress from taking responsibility for votes that they’ve already made." How this plan makes sense in light of Obama's earlier statement that the House would not compromise a debt ceiling plan based on one time increases to the limit, without a long-term debt ceiling extension is unclear, nor is it clear how any of these plans which are simply window dressing will pass muster from the rating agencies, where even Fitch earlier announced any plan would have to be comprehensive for no downgrade of the US to occur. Translated: the CRAs need more stuffing for the Christmas stockings.

The Hill has more on this melodrama:

The McConnell plan was intended to be a fallback for avoiding a default. But since lawmakers missed the president’s deadline for presenting a plan over the weekend, concerns have grown that Congress will not have enough time to negotiate and vote on a package by Aug. 2, when the Treasury Dept. projects the U.S. will default on its debt.

On Tuesday, the bipartisan Gang of Six senators released a $3.7 trillion deficit-reduction plan. The proposal was met with quick support from both Republican and Democratic senators. President Obama praised the proposal as “good news” and said it was “broadly consistent” with the approach he had urged in negotiations.

Sen. Mark Warner (D-Va.), a member of the Gang, to brief members of the New Democrats in the House about the plan Wednesday.

But even Senate Democratic Whip Dick Durbin (Ill.), a member of the Gang of Six, has conceded that the proposal cannot be turned into legislation and scored by the Congressional Budget Office by Aug. 2. Van Hollen on Wednesday joined Durbin in questioning whether there was enough time to implement the plan and suggested it could only be approved if the debt-ceiling were increased for a short period to give lawmakers more time to score and turn the Gang of Six plan into legislation.

The McConnell-Reid option will likely need to win Democratic support to make it through the House.

Sure enough the political horse trading is now back:

The proposal drew howls of criticism from many conservative groups that hoped the Republicans would use the must-pass debt-ceiling vote as leverage to exact trillions of dollars in federal spending cuts. The rebuke from the right almost certainly foreshadows a number of House Republican defections, likely leaving GOP leaders reliant on some Democrats to pass the bill.

House Democrats, however, are suspicious of McConnell’s motives.

“It’s somewhat clever of Mr. McConnell to, in effect, try to transfer all responsibility [for raising the debt limit] … to the president of the United States, solo,” Rep. Steny Hoyer (Md.), the House Democratic whip, told reporters Tuesday.

And so forth. Two more days until July 22 after which we enter legislative limbo and the 30 Year will be reacquainted with gravity once again.