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Posted at 10:56 AM ET, 07/15/2011

McConnell proposal would force major review of entitlements

Larry Kudlow, who’s plugged in with Congressional Republicans, scoops a key new detail about the emerging Mitch McConnell proposal to transfer control of the debt ceiling to the president:

McConnell is negotiating now with Sen. Harry Reid for a large-scale package that will allow the debt ceiling to rise unless overturned by a two-thirds vote. If a White House debt-ceiling deal comes through with $1.5 trillion of spending cuts, that will be part of the package. Right now, it’s not completed because enforceable spending caps have not been determined.
The key part of the new McConnell package is a joint committee to review entitlements in a massive deficit-reduction package. Unlike the Bowles-Simpson commission, this committee will be mandated to have a legislative outcome — an actual vote — that will occur early next year. No White House members. Evenly divided between Republicans and Democrats. No outsiders. This will be the first time such a study would have an expedited procedure mandated with no amendments permitted. Also, tax reform could be air-dropped into this committee’s report.

A source with knowledge of the emerging proposal confirms to me that while nothing has been finalized, this is where the discussions are headed.

If I’m reading this right, what this means is that in order to make the McConnell proposal more palatable to conservatives, there would be a mandated bipartisan review of entitlements next year. The source tells me that if a majority of the committee can agree on recommendations for entitlement reform, the proposal would also mandate a Congressional vote on those recommendations.

It’s unclear how Dems will repsond to this. Democrats are already cool to the McConnell proposal because it includes spending cuts but no new revenues, but they may be willing to accept it because it spares entitlements. But now the proposal looks as if it will also force a review — and a vote on — entitlement reform.

It’s unclear to me as yet whether Senate Dems, who are negotiating with McConnell over the plan, are supportive of this emerging aspect of the proposal.

At a minimum, if this does happen, it means that entitlements may detonate again as an issue just as Campaign 2012 gets under way in earnest.

UPDATE: Another source close to the talks confirms that Harry Reid is in fact discussing this idea with McConnell, so it’s a real possibility.

By  |  10:56 AM ET, 07/15/2011

 
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