July 4 (Bloomberg) -- Republicans might accept a “mini” deal with the Obama administration on raising the debt limit, Senator John Cornyn of Texas, a Republican leader, said yesterday on “Fox News Sunday.”
The idea may delay politically difficult decisions if it’s structured to postpone action on a larger package of spending cuts or revenue increases until after the 2012 election cycle, an analyst said.
“What we’ve been calling for is to have a down payment that’s as big as possible,” Marc Goldwein, former associate director of President Barack Obama’s debt commission, said yesterday in an interview.
Even so, the White House rejected a short-term extension of the debt limit, deputy communications director Jen Psaki said.
“The president has consistently said it is in the country’s economic interests for Congress to reach common ground on a significant long-term deficit reduction package,” Psaki said in an e-mail. “He has been clear in conversations with leaders in both parties about that.”
The Senate shortened its July 4 recess and will remain in Washington to discuss a deal this week to raise the nation’s $14.3 trillion debt limit. The Obama administration is negotiating with Congress on reducing the long-term budget deficit as part of a plan to raise the limit before borrowing authority expires.
Cornyn said that while Republicans would prefer a long-term settlement, they would accept a shorter-term agreement if that’s all they could get done. The Treasury Department has projected that on Aug. 2 the U.S. will no longer be able to meet obligations if the legal debt ceiling isn’t raised.
“The problem with a mini-deal is we have a maxi problem,” said Cornyn, who is in charge of the 2012 Republican Senate campaign strategy. “We’ll take the savings we can get now, and we will re-litigate this as we get closer to the election.”
A spokesman for House Speaker John Boehner, an Ohio Republican, declined to comment on the idea of a short-term agreement.
“The speaker has always said that the time is now and our goal is to get the largest possible spending cuts,” Michael Steel, a spokesman for Boehner, said in an interview.
The White House didn’t respond to a request for comment on Cornyn’s remarks.
“Obviously the debt ceiling is coming up in about a month now, and this is must-pass legislation,” said Goldwein, now policy director at the Washington-based Committee for a Responsible Federal Budget. “Something’s going to have to be agreed to. Given that amount of time, what we should be looking for is a $4 trillion plan.”
Goldwein said the best action would be a comprehensive plan that includes overhaul of taxes and entitlement spending, such as Medicare, and doesn’t delay tough decisions until after the 2012 elections.
Any deal with the administration shouldn’t include a tax increase, Senator John McCain, an Arizona Republican, said yesterday on CNN’s “State of the Union” broadcast.
Closing some so-called tax loopholes would “have very small impact, but the principle of not raising taxes is something that we campaigned on last November and the results of the election was that the American people didn’t want their taxes raised and they wanted us to cut spending,” he said.
Republicans won control of the House of Representatives and gained seats in the Senate in the 2010 midterm elections.
Cornyn, asked about the idea of Obama ignoring the debt ceiling, said that’s “crazy talk.”
“It’s not acceptable for Congress and the president not to do their job and to say somehow the president has the authority then to basically do this by himself,” he said. “We ought to sit down and work together.”
Los Angeles Mayor Antonio Villaraigosa, a Democrat who balanced his city’s budget, said both the Democratic administration and Republican congressional leaders will need to yield.
“Washington has its head in the sand,” Villaraigosa said yesterday on CBS’s “Face the Nation” program. “We’re dithering on the verge of default.”
“Democrats won’t address entitlements -- Medicare and Social Security -- and Republicans won’t talk about revenue or defense spending,” he said. “The fact is we have to talk about all of that.”
A spokesman for Senate Minority Leader Mitch McConnell, a Kentucky Republican, referred to comments the lawmaker made to reporters on June 28 in Washington.
“We are still hoping for a very large package that will impress the ratings agencies, impress foreign countries and astonish the American people that we’re actually going to come together here and take advantage of this terrific opportunity that’s provided by the president’s request of us to raise the debt ceiling,” McConnell said at the time.
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