July 29, 2011

Manchin balks at Democrat, GOP debt ceiling plans | The Huntington Herald-Dispatch

CHARLESTON, W.Va. (AP) — U.S. Sen. Joe Manchin said Friday that neither House Republicans nor Senate Majority Leader Harry Reid, a fellow Democrat, can count on his support for their dueling debt limit plans.

Following up a Thursday floor speech on the topic, West Virginia's junior senator told in-state media that each measure offers only short-term approaches to long-range problems involving federal spending, budget deficits and tax policy. Manchin instead endorsed the sort of provisions developed by the so-called Gang of Six, three senators from each party. They proposed cutting the deficit by more than $4 trillion over the next decade, in part by generating $1 trillion in new tax revenue.

"It's the only thing that I have seen since I have been here that is truly bipartisan," he said of that approach.

Reid aimed for a Senate vote Friday on a proposal that would increase the federal debt limit by $2.7 trillion, while cutting $2.2 trillion. A plan by House Speaker John Boehner, which stalled Thursday for lack of GOP support, mixed $917 billion in cuts with a bare-minimum increase of $900 billion to the debt ceiling.

Boehner sought to revive his proposal Friday by requiring that Congress send a constitutional balanced budget amendment to the states for ratification before any later increase in borrowing authority. Manchin said Friday that he supports such an amendment, but not tying it to the debt question in this manner.

"I'm not for putting conditions," Manchin said during a conference call with reporters. "If we're going to do it, let's vote it straight up or down."

Manchin also questioned whether that approach would give the government enough time to avoid damage to its credit rating, which he ranked as his chief concern. Manchin, who took his Senate seat in November after a term and a half as governor, cited how West Virginia has increasingly won the confidence of Wall Street rating agencies in recent years. That confidence marked a turnaround from decades of fiscal struggles.

"We had dismal credit ratings," Manchin said. "I know how hard it is to get a credit rating upgraded when you've had a downgrade."

By not raising the debt limit by Tuesday, the government would run out of money. Lacking the authority to take on more debt, it would be unable to pay some of its obligations. A default would lower the U.S. credit rating, which would have a ripple effect on the global economy and send interest rates soaring.

The Gang of Six plan, invoked favorably by Manchin, included an immediate 10-year, $500 billion down payment that would come as Congress sets caps on the agency budgets it passes each year. It would also require an additional $500 billion in cost curbs on federal health care programs, cuts to federal employee pensions, curbs in the growth of military health care and retirement costs, and modest cuts to farm subsidies.

That plan drew from last year's National Commission on Fiscal Responsibility and Reform. Appointed by President Barack Obama and headed by Erskine Bowles and former Sen. Alan Simpson, it recommended $4 trillion in spending cuts and tax increases — but not enough commission members voted to send that plan to Congress.

By:  Larry Messina