House Republicans brace for compromise on debt

By Lisa Mascaro and Kathleen Hennessey, Washington Bureau

July 16, 2011 12 AM PT

Reporting from Washington — Republican leaders in the House have begun to prepare their troops for politically painful votes to raise the nation’s debt limit, offering warnings and concessions to move the hard-line majority toward a compromise that would avert a federal default.

For weeks, GOP conservatives, particularly in the House, have issued demands about what they would require in exchange for their votes to increase the debt limit. In negotiations with the White House, Republican leaders have found those demands were unattainable. Unwilling to risk the economic and political consequences of a federal default, which could come as early as Aug. 2, they have started the difficult process of standing down.

At a closed-door meeting Friday morning, GOP leaders turned to their most trusted budget expert, Rep. Paul D. Ryan of Wisconsin, to explain to rank-and-file members what many others have come to understand: A fiscal meltdown could occur if Congress fails to raise the debt ceiling.

House Speaker John A. Boehner of Ohio underscored the point to dispel the notion that failure to allow more borrowing is an option.

“He said if we pass Aug. 2, it would be like ‘Star Wars,’” said Rep. Scott DesJarlais, a freshman from Tennessee. “I don’t think the people who are railing against raising the debt ceiling fully understand that.”

The warnings appeared to have softened the views of at least some House members who, until now, were inclined to dismiss statements by administration officials, business leaders and outside economists that the economic impact would be dire if the federal government were suddenly unable to pay its bills.

Freshman Rep. Steve Womack (R-Ark.) said the presentation about skyrocketing interest rates that could result from downgraded bond ratings was “sobering.”

“It illustrates to us that doing nothing is unacceptable,” he said. “I think the conference understands this is a defining moment for us. It’s time to put the next election aside.”

At the same time, Republican leaders orchestrated a series of public moves intended to soften the blow for conservatives. They agreed to give the House an opportunity to vote on two top conservative priorities: a so-called cut-cap-and-balance bill, which would order $111 billion in cuts in federal programs for 2012 and impose a cap on future spending, and a constitutional amendment that would require a balanced federal budget.

The Democratic leadership in the Senate is also expected to allow votes on one, and perhaps both, measures. Neither is expected to become law — the constitutional amendment would require a two-thirds vote in both chambers — but the chance to vote could appeal to the “tea party” conservatives in the House, who are most skeptical of any deal with the White House to raise the debt limit.

“We’re in the fourth quarter here,” Boehner said. “Let’s get through that vote, and we’ll make decisions about what will come after.”

Congress is likely to spend much of next week on those measures, then could take up a debt ceiling measure in the Senate toward the end of next week. Senate leaders believe they would need a week to overcome a likely filibuster by conservative senators who oppose a higher ceiling despite the fact that the GOP spending plan would also require raising the limit. Sen. Jim DeMint (R-S.C.) has already signaled he would filibuster.

Senators have been told to prepare for possible weekend sessions.

“Now the debate will move from a room in the White House to the House and Senate floors,” said Senate Republican leader Mitch McConnell of Kentucky.

As the congressional leaders struggled to find votes, President Obama held a nearly hourlong news conference in which he reiterated that he was willing to accept difficult cuts in Medicare and other entitlement programs if Republicans would accept some increase in federal revenues — a deal that has eluded negotiators for weeks.

In his second news conference of the week, the president offered his most specific comments about possible cuts in major entitlement programs. He said that if Republicans were willing to move off their opposition to any new tax revenues, he would consider raising the retirement age in several years for beneficiaries of Medicare or requiring upper-income senior citizens to pay more for the program.

“We are willing to look at all these approaches,” he said.

The administration also dispatched top officials, Chief of Staff William Daley and Treasury Secretary Timothy F. Geithner, to meet privately with Boehner and House Majority Leader Eric Cantor (R-Va.).

Boehner also met behind closed doors with Rep. Nancy Pelosi (D-San Francisco), the minority leader. Aides declined to discuss the meetings.

A compromise proposal being crafted by the top leaders of the Senate is quietly circulating around Capitol Hill. It builds on one by McConnell to allow Obama to raise the debt ceiling on his own, but adds an element devised by Sen. Harry Reid (D-Nev.) to incorporate as much as $1.5 trillion in spending cuts identified during the White House talks.

House Republicans were skeptical the cuts being engineered by Reid would materialize. “I want it signed in blood,” said Rep. Rob Bishop (R-Utah).

House Democrats, also meeting behind closed doors Friday, discussed the McConnell-Reid compromise and expressed concern about reducing the deficit by budget cuts alone, rather than relying on some new tax revenue.

It would be “difficult to sell,” said Rep. Rob Andrews (D-N.J.).

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Staff writer Peter Nicholas in the Washington bureau contributed to this report.