Disagreements Still Dominate Debt Negotiations

AGC Led Groups Send Letter to Congressional Leaders As the August 2 deadline to lift our nation’s debt limit or risk defaulting on our obligations approaches, President Obama and congressional leaders continue to meet. However, they appear to be a long way from reaching agreement.  President Obama remains committed to budget reforms that would cut nearly $4 trillion over 10 years while also raising revenue.  Republicans are now suggesting that a short-term debt deal might be necessary, given how far apart the two sides are on a revenue increase, which Republicans view as tax increases.  Developments in this week’s negotiations include Senate Majority Leader Mitch McConnell (R-KY) proposing a compromise that would allow the president to raise the debt ceiling without congressional approval.  The McConnell plan calls for Congress to pass a bill granting President Obama authority to raise the debt limit on his own, provided he notifies Congress.  The presidential request would then be subject to a resolution of disapproval in both the House and Senate, assuming it passes both chambers; the president would be forced to veto the resolution.  An override of the veto would most likely not happen, resulting in the debt ceiling being raised. Conservative Republicans in the House and the Senate are not in favor of this option because they feel it does not address long-term budget reforms. However, the plan has not been completely written off by either party. The group will meet again today at the White House following Wednesday night’s meeting, where  it has been reported House Majority Leader Eric Cantor (R-VA) and President Obama had a war of words that ended with the president walking out of the session.  Today’s meeting will again focus on possible spending cuts and enforcement mechanisms. AGC-Led Letter to the President and Congressional Leaders This week, the AGC-led Transportation Construction Coalition, along with the U.S. Chamber-led Americans for Transportation Mobility, sent a letter to the White House and congressional leaders currently negotiating the debt ceiling asking that they make the future funding and certainty of the federal surface transportation programs a focal point of their debt limit and deficit reduction negotiations. We feel that the current debt limit and deficit reduction negotiations are an important opportunity to address the future viability of our federal surface transportation programs.  This approach is not an unprecedented concept.  AGC was successful in securing a 15 cent gas tax increase in the Simpson/Bowles National Commission on Fiscal Responsibility and Reform Report.  Although, the report ultimately did not garner the necessary votes to be acted on by Congress, they did recognize the impact that transportation investment has on our economy, jobs, and long-term fiscal health. AGC will continue to press the White House and congressional leaders to provide the resources to sustain, and ideally increase investments in our transportation infrastructure as part of the deficit reduction and debt limit solutions.  For more information, please contact Sean O’Neill at (202) 547-8892 or oneills@agc.org.