One interesting political dynamic right now is that Obama is working to enlist the support of business leaders to prevent another debt ceiling standoff next year. House Republicans are thinking about caving now on the middle class tax cuts — then coming back next year and staging another 2011 style debt ceiling battle to win the deep entitlement cuts they want. Business leaders are cool to the possibility, because such standoffs risk damaging the economy.
I’ve just learned that one of the most influential business groups in Washington, the Business Roundtable, is prepared to support a provision designed to dramatically minimize the possibility of another standoff now and in the future — one also supported by the White House. This is a step forward for White House efforts to prevent a 2011-style battle, which led to a credit downgrade for the United States, and widespread fears that the country would go into default.
Obama — who is refusing to negotiate over the debt ceiling again — supports a measure called the “McConnell provision,” a proposal pushed by Mitch McConnell last year to try to defuse the crisis. Under the provision, the president can request a debt limit hike, after which Congress can vote to deny the request by disapproving of it. The president can then veto that request, and unless Congress overrides that veto with a two-thirds vote in both houses, it is honored. The provision transfers most control over the debt ceiling to the President and makes it far harder for the opposing party in Congress to block hikes — meaning the constant threat of default, and the ability to engage in brinksmanship around it, are effectively removed.
The McConnell provision was passed as a temporarily measure as part of last year’s debt ceiling compromise but would need to be extended now. The White House has proposed extending it; if that happens, House Republicans would not be able to stage a meaningful standoff next year.
I’m told reliably that the Business Roundtable will support the McConnell provision if it’s proposed again in Congress.
This underscores the rising determination among business leaders — many of whom are aligned with the GOP — to avoid a rerun of the 2011 debacle. Obama is aggressively lobbying these business leaders, publicly and privately, to make their opposition to another standoff known. And it appears that they are doing so. As Politico’s Ben White reports today, executives are privately beginning to coalesce around the McConnell provision as a means to that end.
The prospect of another debt ceiling fight puts the House GOP in an interesting spot, pitting its Tea Party wing against more pragmatic GOP-aligned interests in the business community. While the former will be spoiling for another fight, the latter appears far less willing to see the country dragged through another deeply damaging round of debt ceiling brinksmanship — with the full faith and credit of the United States, and the economy, at stake — this time around.