In the aftermath of the fiscal cliff deal that put off the sequester’s implementation by some two months, Senate Minority Leader Mitch McConnell (R-KY) is putting focus squarely on debt reduction, with the debt ceiling as the trigger mechanism for that discussion. Today, he released the following statement:
“Now that the House and Senate have acted in a bipartisan way to prevent tax increases on 99 percent of the American people, Democrats now have the opportunity—and the responsibility—to join Republicans in a serious effort to reduce Washington’s out-of-control spending. That’s a debate the American people want. It’s the debate we’ll have next. And it’s a debate Republicans are ready for. Despite the President’s call for more and more Americans to send even more of their paychecks to Washington, the federal government will still have another trillion-dollar deficit this year. But in the upcoming months, we will have the opportunity to put our country back on sound financial footing—and there’s no excuse not to seize it. The President claims to want a balanced approach to solve our problems. And now that he has the tax rates he wants, his calls for ‘balance’ mean he must join us in our efforts to achieve meaningful spending and government reform. We have an immediate opportunity to act: the debt ceiling. Washington’s credit card has reached its limit again, and the Senate majority must act on legislation early in February—rather than waiting until the last minute, abdicating responsibility and hoping someone else will step in once again to craft a last-minute solution for them. Once the Senate passes bipartisan legislation, we can conference with the House on a solution. But this time the entire Senate must have an opportunity to act.”
McConnell’s pledge that the tax issue has been settled – and that now it is time for President Obama to come to the table on spending cuts – means that we are set up for a real showdown in two months. At that point, the administration will be given a simple choice: allow the sequester to go forward as planned, without specification, with additional cuts as well, or default on America’s debt.
Unlike the fiscal cliff negotiation, which placed all leverage on Obama’s side – he wanted tax increases and could live with indiscriminate cuts to defense – now the leverage is on the side of Republicans. If the debt ceiling is not raised, America will default on her debt due to outstanding spending issues. And that will be purely Obama’s fault, since he has already raised taxes under the current deal.
The key to avoiding another fiscal cliff-like scenario will be Republican strength on bifurcating further tax increases from any debt reduction deal. They failed that test in 2011. They must not fail this time, or they will pay a heavy political price.