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Posted at 12:29 PM ET, 07/21/2011

Reid: House recess would hurt chances of debt-limit ‘grand bargain’


(Brendan Smialowski - GETTY IMAGES)
The prospect that the House might reverse course and skip weekend sessions brought new warnings from Senate Majority Leader Harry Reid (D-Nev.) Thursday morning that time is running short for a “grand bargain” on raising the country’s debt ceiling.

In a speech to colleagues on the Senate floor, Reid said it would send a “a bad picture” to the nation if the House leaves town this weekend without a deal. He noted that under congressional rules, a deal that involves revenues would have to start in the House, meaning a “grand bargain” like the one that has been sought by President Obama and House Speaker John Boehner (R-Ohio) could not begin moving through Congress until next week if the House does not hold weekend sessions.

“I think this is a very bad picture for our country to have the House of Representatives out this weekend when we have to likely wait for them to send us something,” he said. “So I think it is just untoward -- and that’s the kindest word I can say -- for the House of Representatives to be out this weekend.”

House Majority Leader Eric Cantor (R-Va.) had earlier this week announced that the House might be in session over the weekend, but changed course Wednesday evening and said that the chamber was not expected to meet on Saturday or Sunday. Reid announced on Monday that the Senate will meet over the weekend and every day until a debt-limit deal is reached.

At a joint news conference with Maryland Gov. Martin O’Malley (D) after a House Democratic caucus meeting, House Minority Whip Steny Hoyer (D-Md.) said that Boehner, House Minority Leader Nancy Pelosi (D-Calif.) and “a large number of members in the Senate” all share the view that there ought to be a large deal, but that the prospects for such a deal depend on the substance of the proposal.

Among the various options that congressional leaders and the White House could choose are a compromise being crafted by Reid and Senate Minority Leader Mitch McConnell (R-Ky.) and a sweeping deficit-reduction plan outlined by the Senate’s bipartisan “Gang of Six.”

“We don’t know until we know the construct of the design of a comprehensive package to address the long-term problem,” Hoyer said. “We have a short-term problem, clearly, and that is by Aug. 2 lifting the debt limit so that America pays its bills and does not adversely affect every American family. I think every American family needs to know that.”

Leaders of both parties continue to meet ahead of the Aug. 2 deadline by which Congress must vote to raise the debt ceiling or else the country will default. House Minority Leader Nancy Pelosi (D-Calif.) told reporters Thursday that meetings Wednesday had been productive and that she anticipated meeting again with Republican leaders in the House Thursday, as well as possibly with White House officials.

She said it is now critical to send a clear message that a deal will be found to avoid default. But while she praised the overall goals of the Gang of Six proposal, Pelosi remained non-committal about its specifics and did not endorse using it in its entirety to broker a deal.

“We all have an obligation to prevent our country from going into default,” she said. “What the bill looks like will depend on who can vote for it. ... It’s not going to be mysterious as to what’s in the final product; it’s just a question of how big it is.”

The debt-limit debate took an unanticipated turn as Americans for Tax Reform President Grover Norquist, who has crafted an anti-tax pledge signed by nearly all Republican members of Congress, told The Washington Post’s editorial board in an interview published Thursday morning that the elimination of a tax cut or special-interest tax break would not in his view necessarily amount to a tax increase.

“In other words, according to Mr. Norquist’s interpretation of the Americans for Tax Reform pledge, lawmakers have the technical leeway to bring in as much as $4 trillion in new tax revenue — the cost of extending President George W. Bush’s tax cuts for another decade — without being accused of breaking their promise,” the Post’s editorial reads. “‘Not continuing a tax cut is not technically a tax increase,’ Mr. Norquist told us. So it doesn’t violate the pledge? ‘We wouldn’t hold it that way,’ he said.”

“I think Mr. Norquist has made a very, very important statement that I hope that they each take into consideration,” Hoyer said of Norquist’s remarks.

In remarks on the Senate floor, Sen. Charles Schumer (D-N.Y.) also seized on Norquist’s remarks, calling them “what must be the significant departure to date from the House GOP’s fantasy land.”

“This is a development the significance of which should not be underestimated,” Schumer said. “It is a recognition from Norquist that the House Republicans are increasingly isolated and have painted themselves into a corner. ... The House GOP is on an iceberg that is melting into the ocean, and even Grover Norquist is offering them a lifeboat. The question is, for their own good and for the country’s good, will they take it?”

But Norquist contended in an interview on MSNBC Thursday morning that his remarks had been taken out of context.

“There are certain things you can do technically and not violate the pledge and that the general public would clearly understand is a tax increase,” Norquist said, according to Politico. “Let me be clear, Americans for Tax Reform would oppose any effort to weaken, reduce or not continue the 2001, 2003 Bush tax cuts, and in fact any changes in tax should be kept separate from the budget deal.”

In a statement Thursday, Americans for Tax Reform said that the group’s position remains that any move to allow the Bush-era tax cuts to expire would amount to a tax increase. The group also said that the deficit-reduction proposals outlined by the president’s fiscal reform commission late last year and by the Gang of Six this week would also result in raising taxes.

“Any failure to extend or make permanent the tax cuts of 2001 and 2003, in whole or in part, would clearly increase taxes on the American people,” the group said in its statement. “In addition, the failure to extend the AMT patch would increase taxes. The outlines of the plans are deliberately hazy, but it appears that both Obama’s Simpson-Bowles commission proposal and the Gang-of-Six proposal dramatically increase taxes on the American people.”

By and  |  12:29 PM ET, 07/21/2011

 
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