Wednesday, July 27, 2011 | 1:44 a.m.
- Debt crisis: Deal sought in Washington to head off stock plunge (7-23-2011)
- Lots of private talks, but still no deal, on debt ceiling (7-21-2011)
- Boehner: House will compromise on debt limit (7-21-2011)
- Reid sends signal he won’t back compromise bill based on budget cuts (7-21-2011)
- With debt ceiling decisions will come consequences — practical and political (7-15-2011)
- Dean Heller takes hard line on debt ceiling, wants balanced budget amendment (7-15-2011)
- Latest developments in debt ceiling standoff (7-14-2011)
- Debt ceiling debate colors Nevada 2012 elections (7-8-2011)
- Harry Reid to keep Senate in session as debt limit deadline looms (6-30-2011)
- Berkley says no to raising debt ceiling, refuses ‘show vote’ (5-31-2011)
- Measure on raising debt ceiling not likely to gain traction (5-31-2011)
Nevada Sen. Dean Heller hasn’t finished reading through the fine print of Senate Majority Leader Harry Reid’s and House Speaker John Boehner’s competing proposals to raise the debt limit. But already, he seems to be trying to carve out a space for himself to vote “no.”
“Nothing good is going to come out of these speeches and nothing is going to come out good for Nevada if interest rates go up and we don’t pass something by August 2nd,” Heller said Tuesday afternoon.
“I do believe it’s a critical date,” he said. “But that’s not to say that I’ll vote for any of these plans if they’re not good enough.”
It’s not clear what will emerge in the next week, especially now that Boehner’s proposal has been pulled off the table for failing to meet the most basic requirement Boehner himself set out for this process: that spending cuts must equal or exceed hikes to the debt ceiling.
Boehner’s proposal, now being rewritten, would raise the debt limit by $1 trillion. But it is getting fierce pushback from Democrats for being too short-term (while it outlines a graduated debt limit hike, it only guarantees a six-month extension).
Reid’s plan would raise the debt ceiling by $2.4 trillion off $2.7 trillion in cuts. But it is being blasted by Republicans for what they say is shady accounting (it counts $1 trillion of war spending that’s expected to come down anyway as cuts.)
Neither is exactly what Heller was looking for.
Like the Republicans who have started to defect in the House, Heller says his plan of choice was the “Cut, Cap and Balance” bill, which Heller credited Tuesday as being the inspirational basis for Boehner’s plan.
But he maintains that “if you don’t make fundamental changes, it doesn’t make a difference....Interest rates are going to go up anyway, the dollar’s going to get weak, and we’re going to have inflation,” he said. “So why go through this exercise of smoke and mirrors when the fact is, if we don’t do it right, everything’s going to happen anyway?”
That’s partially true. The credit rating agencies have already warned that U.S. creditworthiness will be downgraded if all Congress passes is a stopgap measure. That would cause a spike in U.S. interest rates that would raise the cost of anything based on interest — credit cards, mortgages, car loans.
But the one thing raising the debt limit will do is keep the country from default and having to pick and choose what bills to pay, including, lawmakers say, domestic expenditures such as Social Security and veterans’ benefits.
When asked about that aspect, Heller answered with a historical defense.
“It certainly wasn’t a concern of the president’s when he was in the United States Senate,” Heller said, referencing a 2007 vote then-Sen. Barack Obama took against raising the debt limit.
“That didn’t bother him to vote against the debt ceiling back then. It didn’t bother the president, and it wasn’t a priority for this president; and frankly I believe every Democrat in the Senate voted against the debt ceiling because it didn’t measure up to whatever they wanted,” Heller said.
Heller’s says he isn’t concerned that a potential “no” vote on the debt limit could come back to haunt him with voters.
“This is about the country. This isn’t about politics, or it shouldn’t be,” he said.
But let’s face it, politics is an integral part of this process and will likely continue to be in Nevada, especially because Heller’s front-runner opponent, Rep. Shelley Berkley, appears to be leaning the other way on the debt limit vote.
“I don’t see how you can fail to raise the debt ceiling,” Berkley said Tuesday. “The implications for this nation are just potentially catastrophic. I don’t want to overstate it, but every expert that I’ve spoken to and every CEO that’s come before the Ways and Means Committee...has spoken of the dire consequences of not raising the limit.”
That said, Berkley hasn’t officially committed to a position, either, and planned to oppose Boehner’s bill before the speaker pulled it from the floor to make corrections.
“I have no idea how it’s going to be structured, and I have no idea what will be balanced, if anything, so I’m reserving judgment until I see it,” she said.
“I know that we’ve got to get control of our deficit and our debt and restructure these very important programs so they are sustainable for generations to come,” Berkley said. “But I resent that those issues, which are very important, have become a part of the debt ceiling debate.”
There is some quirky common ground between the Democrats and ultraconservative Republicans objecting to the speaker’s plans.
Neither group is a fan of its short-term nature. Both groups would prefer alternative debt ceiling solutions that would extend the country’s borrowing authority by $2.4 trillion or through the end of 2012 (even though that’s exactly what Republican House leaders have been charging is a purely political, election-motivated call when it comes from Obama).
Their preferences for a substitute, though, go in different directions.
For the Democrats, that means something more akin to Reid’s plan; for the very conservative Republicans, that means “Cut, Cap and Balance,” which just so happens to lift the debt limit by the same amount.
But that plan leverages the lift on a constitutional amendment, spending caps and deep cuts — about $6 billion to $7 billion for the $2.4 billion in borrowing authority — that Democrats say will undercut social safety net programs and cause the economy to hemorrhage 700,000 jobs.
So despite selective top-line similarities, it’s incredibly unlikely those groups will find common cause in the coming week.