Bumpy July

Congress has less than a month to raise the federal debt ceiling; July will surely be filled with many twists and turns.

The Gang of Six senators wanted to release their bipartisan recommendations by the end of May, but the group disintegrated when Sen. Tom Coburn (R-Okla.) walked out. 

{mosads}Then all eyes focused on the bipartisan group of negotiators led by Vice President Biden, who said his goal was a July 1 agreement.

Just when it seemed the group was close to reaching a deal, Majority Leader Eric Cantor (R-Va.), like Coburn, got up and walked away from the table, citing Democrats’ wishes to raise taxes.

With time running out before the administration’s Aug. 2 deadline to lift the debt ceiling, there is more talk of a short-term extension. But this is not like passing a simple stopgap continuing resolution. 

Getting any agreement to increase the debt ceiling will be extremely difficult, whether it’s for two years or only six months. 

Lawmakers in the Biden group stressed throughout June that they needed agreement before the stock market got jittery.

The stock market could be the one thing that compels lawmakers to forge a grand compromise this month.

The politics of all this are far-reaching, especially because many questions remain unanswered.

Who will be in the room shaping the final deal? In the showdown over fiscal 2011, President Obama, Senate Majority Leader Harry Reid (D-Nev.) and Speaker John Boehner (R-Ohio) shaped the bill that averted a government shutdown.

But House Minority Leader Nancy Pelosi (D-Calif.) and Senate Minority Leader Mitch McConnell (R-Ky.) have made it clear they will not sit idly on the sidelines of debate over the debt-ceiling increase.

The president needs both Pelosi and McConnell to round up votes for whatever bill is sent to Capitol Hill for Senate and House votes. So they demand, and undoubtedly will be given, some say in what is in the legislation.

Congressional Democrats are wary that Obama will cave to the GOP; that’s what they believe happened over extending tax rates in the lame-duck session late last year.

Democrats in both the House and Senate stress that an agreement must foster job development and eliminate tax loopholes for “special interests.”

Republicans are firmly refusing to raise taxes, as they did during the negotiations that led to the two-year extension of rates signed into law by President George W. Bush. 

The pressures from left and right are enormous, and it’s hard to see how the parties will come together.