–Senate Majority Leader: Plan Gives House GOP ‘Everything’ They Asked
–Sen. Reid: Hope House GOP ‘Will Remember How To Say Yes’
–Sen. Reid: Short-Term Debt Hike Would Worry Markets, Americans, World
–Senate Minority Leader: Obama Derailed Debt Hike Deal Saturday
–Sen. McConnell: Obama Should ‘Reconsider’ Opposition To Two Step Hike

By John Shaw

WASHINGTON (MNI) – Senate Majority Leader Harry Reid said Monday
that he will propose a debt ceiling bill that would cut spending by $2.7
trillion over ten years and allow for passage of a $2.4 trillion debt
ceiling increase.

In comments on the Senate floor, Reid said he hopes his plan breaks
the “impasse” on Capitol Hill on the debt ceiling.

He said it would cut spending by $2.7 trillion and not raise any
revenues.

“The proposal provides everything the House Republicans have said
they needed for an agreement to avert default and cut the deficit,” Reid
said.

“I hope they will remember how to say yes,” Reid said.

Reid said passing a debt ceiling increase in a way that requires
votes this year and again next year would rattle financial markets.

Reid said that Democrats have effectively accepted Republican
demands on the debt limit.

“Democrats have done more than just meet Republicans in the middle.
We have met them all the way. Now we’ll see whether the Republicans are
against any agreement,” Reid said.

Reid released an outline of his plan. It calls for $1.2 trillion in
discretionary savings, $1 trillion from winding down the wars in Iraq
and Afghanistan, $400 billion in interest savings and $100 billion in
entitlement savings.

Of the $100 billion in entitlement savings, $40 billion comes from
program management reforms, $30 billion from Fannie Mae and Freddie Mac
reforms, $15 billion in spectrum sales, and between $10 and $15 billion
in agriculture reforms.

Speaking after Reid, Senate Minority Leader Mitch McConnell blamed
Obama for derailing a debt ceiling agreement Saturday and urged him to
“reconsider” his opposition to it.

“A bipartisan plan to resolve this crisis was literally within our
reach this weekend,” he said, referring to the proposal by Republicans
to increase the debt ceiling in two increments after two different
votes.

Democrats have said they never agreed to this plan.

Obama met with Reid and House Minority Leader Nancy Pelosi Sunday
evening and they all came out in opposition to a short-term debt ceiling
increase.

McConnell did not comment on Reid’s debt hike proposal.

House Speaker John Boehner is now briefing House Republicans on his
debt ceiling plan, which would raise the debt ceiling by $1 trillion
this year and $1.6 trillion next year.

According to a Boehner staffer, passing the initial $1 trillion
debt ceiling increase would require Congress to pass $1.2 trillion in
spending cuts through imposing caps on discretionary spending.

Approval of the second tranche of $1.6 trillion would require
passage of $1.8 trillion in spending cuts in entitlement programs.

Under Boehner’s plan, the House and Senate would also have to vote
on a balanced budget constitutional amendment between this October and
the end of the year.

The U.S. has already reached its $14.29 trillion debt ceiling.
Treasury Secretary Tim Geithner has said that Congress must pass
legislation increasing the debt ceiling by August 2.

After commenting on the Senate floor, Reid and Sen. Chuck Schumer
held a briefing on the Democratic plan.

Reid said he hopes his plan will get 60 votes in the Senate, but
declined to predict it will.

Reid said McConnell should “try again” in trying to pin blame on
Obama for the impasse.

Reid said he will formally propose his bill on the Senate floor
“sometime tonight.”

** Market News International Washington Bureau: (202) 371-2121 **

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