Debt Impasse Continues In Washington

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Both Republicans and Democrats have their own plan to end the debt standoff. But neither party thinks a grand deal is in their interest.

MARY LOUISE KELLY, host:

It's MORNING EDITION, from NPR News. I'm Mary Louise Kelly, in for Renee Montagne.

STEVE INSKEEP, host:

And I'm Steve Inskeep. Good morning. Here's a sign of how divided Congress has become. Days away from a deadline to raise the debt ceiling, Republican leaders in the House and Democratic leaders in the Senate are each pursing their own plans, and it is not certain yet that either plan can pass either House.

KELLY: House Republicans were expected to vote today on Speaker John Boehner's latest plan, but that vote has been put off, as Republican leaders work to round up votes. Some in their party oppose it.

INSKEEP: What happens in the next few days matters because a failure to pay U.S. debts could affect the entire economy. It also matters to political partisans because they are maneuvering for the next election.

NPR's Mara Liasson reports on the politics of political brinksmanship.

MARA LIASSON: The White House likes to point to polls, and there are lots of them, that show voters are more likely to blame Republicans if the country goes into default. But those polls can be misleading, says former House Republican leadership aide John Feehery. The Republicans might be blamed, he says, but the president will be punished.

Mr. JOHN FEEHERY (The Feehery Group): The president is the Big Kahuna in this debate. Most people still don't know who John Boehner is. And the president, he's the one that is going to be at the top of the ballot. If the economy tanks because we don't get a deal, it's going to be on his head

LIASSON: Default is not the only shark in these waters. Even if Congress manages to cobble together something that defers default for six months or 18 months, the credit rating agencies may still decide that's not enough. Without a bigger, longer term plan to reduce the underlying deficit, those private agencies may downgrade the ratings of U.S. debt.

Jim Kessler is with the think tank Third Way.

Mr. JIM KESSLER (Third Way): If you have a second-rate credit rating, it means in the eyes of the world you're a second-rate country.

LIASSON: That could be devastating economically and devastating politically for President Obama, even if he managed to convince voters it wasn't his fault.

Watching all this from the sidelines are the Republican candidates for president who've been remarkably silent as the debt ceiling drama unfolds. Mitt Romney, the GOP frontrunner, never brings it up unless he's asked, which he was at the Portsmouth, New Hampshire Rotary Club earlier this month.

Mr. MITT ROMNEY (Republican Presidential Candidate): The answer for the country is for the president to agree to cut federal spending, to cap federal spending, and to put in place a balanced budget amendment, and that is the answer for the debt limit, it's the answer for our nation.

LIASSON: But beyond associating himself with cut, cap and balance - the new battle cry of the House Republicans - Romney is smart not to get involved, says John Feehery.

Mr. FEEHERY: And if you get in the middle of a mudslinging match between the Congress and the president, you could get splattered with mud, and I think that's why these most of the smart presidential contenders are staying out of it.

LIASSON: 2012 presidential politics are also driving the dynamics of the debt ceiling debate inside Washington. They helped derail the bigger deficit deal the president wanted, says Jim Kessler.

Mr. KESSLER: Republicans are very reluctant to do something big here because, look, there's no doubt something big does help the president.

LIASSON: As Senate Republican Leader Mitch McConnell put it earlier this year, defeating the president is job number one for Republicans. If there was a big deal with tax reform, spending cuts and changes to Medicare and Social Security, the president would get a big boost and there would be less bite in the tax-and-spend issue next year. The GOP would also lose the deficit issue itself - as Mr. Obama himself pointed out on Friday when he asked Republicans this question.

President BARACK OBAMA: How serious are you actually about debt and deficit reduction? Or do you simply want it as a campaign ploy going into the next election?

LIASSON: In the end, says Feehery, a big deal wasn't in the political interests of congressional Democrats either. Though they would have followed the president down that path, Democrats too preferred a smaller deal that preserves their ability to attack Republicans on Medicare and Social Security.

Mr. FEEHERY: A big deal really screws up a lot of campaign commercials.

(Soundbite of laughter)

LIASSON: For both sides. And that's why Harry Reid, Nancy Pelosi, Mitch McConnell and now, after his brief flirtation with a big deal, John Boehner, all agree on one thing: the status quo of a smaller deal, where everyone's traditional battle lines are preserved, is more comfortable politically. John Feehery...

Mr. FEEHERY: Getting a smaller deal actually does not help the president get himself reelected. It kind of kicks the can down the road a bit. But it preserves all the options for both Reid and for Boehner, who are trying to preserve their majorities. At the end of the day, Reid and Boehner are going to be looking out for their own interests and not for the president's.

LIASSON: So now Congress has circled back to the earliest contours of the debt ceiling debate, when it was assumed lawmakers would raise the debt ceiling, make a down payment on the deficit, and leave the big issues, like taxes and entitlements, to be fought out in the 2012 elections.

Mara Liasson, NPR News, Washington.

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