McConnell’s Debt Plan Gives Split Signals
By Mike Dorning and Roger Runningen -
Senate Minority Leader Mitch McConnell’s offer to hand President Barack Obama unilateral power to raise the national debt ceiling lent some market analysts confidence that the U.S. will avert default, while Senate Majority Leader Harry Reid today praised the plan.
In a move intended to put the burden on the White House to identify future spending cuts, the Kentucky Republican offered his “last-choice” plan as an alternative to deficit-reduction talks at the White House that have yielded no apparent progress.
“It would make it much easier to raise the debt limit, which should reassure markets,” Gus Faucher, director of macroeconomics at Moody’s Analytics in West Chester, Pennsylvania, said in response to an e-mail today. “I haven’t heard of any market reaction yet but it does imply much greater willingness to make a deal, which is a positive.”
Mark Zandi, chief economist at Moody’s Economy.com, said markets are comforted, at least to a degree, with McConnell’s plan because it suggests that lawmakers recognize the gravity of a default.
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Reid described McConnell’s proposal as “thoughtful and unique,” even as he called on both sides to pull together on a more ambitious deal. “This is a serious proposal, and I commend the Republican leader for coming forward,” the Nevada Democrat said on the Senate floor today.
more:
http://www.bloomberg.com/news/2011-07-12/mcconnell-said-to-propose-three-stage-process-for-raising-u-s-debt-limit.html