Progress is being hinted at in debt crisis

By Karoun Demirjian

Saturday, July 30, 2011 | 3:07 p.m.

With only hours to go until the Senate takes what to this point looks to be a doomed-to-fail vote on Majority Leader Harry Reid’s bill, phones are ringing and meetings are happening around the Capitol as Senate Republicans and Democrats try to talk through their differences, draft legislative language and come with a compromise proposal before Reid has to put his package to a vote tonight.

The only problem is that the two people who need to be talking to pull that process out of the back rooms and onto the Senate floor, aren’t.

“A number of (Republicans) have already agreed to work with us,” Reid said Saturday afternoon. “But I haven’t heard anything from the Republican leader.”

He’s referring to Senate Republican Leader Mitch McConnell, who holds the keys to concluding an agreement that can pass the Senate — and likely the House, too.

As Reid delivered his remarks to reporters, McConnell was over in the House, meeting with Speaker John Boehner, who had just held a vote to shoot down a mock-up version of Reid’s proposal.

Senior Democratic aides had planned for a bit of holding out for McConnell, but assumed that once Boehner took all the votes of disapproval, McConnell would be willing to talk to Reid once again.

But McConnell doesn’t appear interested.

“I spoke to the president and the vice president in the last hour,” McConnell said, following his meeting with Boehner. “I think we all know if the president decides to reach an agreement, the rest of the Democrats will fall in line.”

Reid went to the White House this afternoon to speak with President Barack Obama for about an hour and a half Saturday afternoon, and called the Senate for a procedural, attendance-taking vote early Saturday evening — a sign that there may be a deal in the works.

But that deal may be between Obama and Republicans. Reid said he was called to the meeting with Obama, who started a meeting with House Democratic leader Nancy Pelosi after his meeting with Reid ended. The two congressional leaders usually meet with Obama together.

But while McConnell may be striking a top-down deal with the president, members of his caucus seemed engaged in a bottom-up approach with Senate Democrats.

This afternoon, 43 of the 47 Republicans in the Senate signed a letter informing Reid that they wouldn’t be voting for his bill as it stands. But Reid pointed out that several people were continuing to make overtures to Democrats.

While most of those Republicans aren’t shouting from the rooftops about their bipartisan discussions, many are intensely urging for compromise, with a palpable sense of frustration that they can’t just agree on what, at this point, seems the almost-obvious endgame to this whole crisis.

“We don’t differ on raising the debt ceiling, we just differ on how we raise it,” said Sen. Johnny Isakson, R-Ga. “Quite frankly, there’s something to be said for waiting until after the election of 2012, so we have 18 months of stability and predictability.”

Isakson’s definition of what is agreeable, he said, would be a long-term raise of the debt limit, with an initial round of discretionary cuts, a bipartisan joint commission of lawmakers that meets to recommend more cuts, a vote on the balanced budget amendment, and as a fallback, sequestration, if lawmakers couldn’t come up with an agreement on more cuts.

Sequestration is a mechanism by which across-the-board spending cuts are made automatically if the annual deficit climbs above a certain level. It’s been used in the past, including during the Ronald Reagan administration, to force Congress to take action. Reid has offered that to Boehner, provided the sequestration that would kick in would raise revenues as well as make cuts — thereby holding a hammer over both parties’ heads.

Bottom line? Democrats won’t agree to a deal that doesn’t either base the raising of the debt ceiling on something like the Reid-McConnell structure, which the gives the president the ability to raise it alone if Congress can’t collect a two-thirds majority to override a veto of budget-based disapproval motions; or a guaranteed long-term extension of the debt limit with a menacing, sequestration incentive to strike a better deal in the meantime.

Either could jive with what Senate Budget Chairman Kent Conrad, D-N.D., who also headed up the Gang of Six negotiations to come up with a $4 trillion deal, says he’s working on with colleagues from both sides of the aisle.

Conrad told reporters Saturday that he was drafting legislative language with Republicans for three separate trigger mechanisms, all of which either included revenue-generators along with cuts, or included the possibility of introducing revenue generators in the structure sometime in the future. Isakson suggested Saturday that so long as they could agree on a general framework, Congress wouldn’t have to get too deep into specifics now: How and where the sequestration cuts and/or revenues kick in could be hashed out down the line, provided that a threshold of deficit and general ratio of cuts and/or revenues were agreed to now.

Sen. Scott Brown of Massachusetts, who didn’t sign the letter, told reporters today that he was working with Democrats to try to improve the “trigger” mechanism in the bill.

Isakson said, “I think more than 60 percent of my colleagues are ready to make a constructive deal.” But when asked if he thought if McConnell had a different attitude about negotiating than the rest of the caucus, Isakson shook his head and said: “I’m not walking into that trap.”

McConnell is still the keystone to bridging the divided Congress, and all the flurrying of activity in the Capitol means nothing if he manages to strike a deal with the Obama on different terms.

McConnell and Boehner have maintained that no matter what else they’ve discussed in the past or is circulating for discussion now, the Boehner plan reflects compromise between Democrats and Republicans, and is the only fiscally responsible way forward.

But accepting the Boehner bill’s terms — or even its general structure — would represent a huge concession on Obama’s part. He has said in no uncertain terms that he can’t support a compromise that raises the debt limit only in the short term, and won’t back a plan that mandates Draconian cuts with some relief in the form of revenues.

Politically, it looks better for McConnell and Boehner, if they have to bend, to strike a deal with the president — He is the chief officer in the Democratic party, not Reid.

Still, around the Capitol, there’s a growing sense that the continued drum-beating for the Boehner bill would eventually have to come to a stop.

“There’s a prayer. I think there’s always a prayer,” said Nevada Rep. Joe Heck, who voted against Reid’s mock bill today, of Boehner’s bill resurfacing as the framework for the agreement.

But he’s expecting something from the Senate, and setting fairly broad conditions for what he’s willing to back.

“I need to see a dollar-for-dollar increase in savings, and no new taxes,” Heck said. “If those two primary principles are met, then I’m more than willing to read the rest of the bill.”

Nevada Rep. Shelley Berkley seems likely to agree to something if Reid gives it his stamp of approval in the Senate: she voted for the Reid measure but against Boehner’s bill

“It’s the most responsible approach on the table and the only one that reduces our deficit by $2.4 trillion, protects Social Security and Medicare and avoids a devastating default that would wreck havoc on Nevada’s fragile economy and jeopardize the benefits our seniors and veterans rely on,” she said.

Sen. Dean Heller voted against a motion to table Boehner’s bill in the Senate — an expression of support — and is expected to vote against Reid’s bill as it stands.

The Senate scheduled a procedural, attendance-taking vote for early Saturday evening; a sign that leaders want to talk to their party caucuses, potentially about a deal that’s in the works.