President Praises "Gang of Six" on Bipartisan Debt Plan

Lawmakers on both sides of the aisle are engaging in procedural wrangling in an effort to prevent a looming federal default. If successful, it may avoid the impending doom of a financial crisis, but it would add more layers of complication to an already labyrinthine process.

The looming federal default on August 2 is a problem, and competing factions on Capitol Hill are hoping to be the ones to fix it. In the shadow of this week's scheduled House vote on a stark GOP plan to reign in spending and amend the constitution in exchange for expanding the debt limit, the president praised a new plan devised by the bipartisan 'Gang of Six' in the Senate to address the nation's debt problems.

“We have a Democratic president and administration that is prepared to sign a tough package that includes both spending cuts and modifications to Social Security, Medicaid and Medicare that would strengthen those systems,” the president said at a press conference after the Senators presented their plan, which would reduce the deficit by $4 trillion in the next ten years, make deep cuts in Medicare, Medicaid and military programs, and lower tax rates but close tax loopholes and tax breaks.

Today, the House is expected to vote on what the GOP is calling a "Cut, Cap and Balance" plan that would allow the debt ceiling to be raised $2.4 trillion before the August 2 deadline in exchange for enacting draconian spending cuts. (The Federal government has already spent the money, so if no consensus is reached, the U.S. would in effect be slapped with a devastatingly large bounced check).

The GOP plan, backed by freshman conservatives within the party, would cut next year's spending by $100 billion and place additional caps on future expenditures, but most notably (and in the eyes of Democrats, outrageously) it would amend the constitution to require a balanced budget. That amendment would of course need to be approved by Congress and sent to the states for ratification.

The chance of the innocuously named "Cut, Cap and Balance" being approved by the Senate? Almost zero. House Majority Leader John Boehner is even having trouble getting his increasingly undisciplined group to consensus. Analysts say that a yes vote on a hard-line plan like this could give Republican Congressman cover later if they end up agreeing to a less drastic deal, but with the passionate uber-Conservatives in the House, even that looks unrealistic.

For their parts, the Senate Majority Leader Harry Reid and Senate minority leader Mitch McConnell, are developing their own game plan. It's a little screwy, so pay attention:

In this maneuver, Republicans would in essence agree to raise the ceiling without actually voting for it. (But don't think it's a Get Out of Jail Free Card — conservative groups are already lobbying GOP lawmakers against it). Congress would disapprove the administration's request to expand the debt ceiling, the president would veto that disapproval, and if that veto is not overturned, the debt limit would increase.

If it works, it will be a double negative = positive.

To make the pill sweeter to those feisty GOP freshman, who clearly have something to prove, Senate leaders are allowing spending cuts to be attached to the package.

Nothing is certain, except the rent is due.