After hurried scrutiny, state House members split on debt bill

WASHINGTON-After a rushed and wrenching review, Connecticut’s five U.S. House members split over the debt-reduction deal crafted by the White House and congressional leaders to avoid a U.S. default. Capping a chaotic day and ending weeks of brinksmanship, the House approved the measure by a vote of 269 to 161, with 174 Republicans supporting the measure and Democrats evenly divided for and against.

Among Connecticut’s all-Democratic contingent, Reps. Joe Courtney and Jim Himes, who represent the 2nd and 4th districts respectively, both voted yes. Rep. John Larson, Rosa DeLauro, and Chris Murphy, who represent the 1st, 3rd, and 5th districts, all voted no.

All of them said it was a flawed proposal and a tough decision, made in haste on the eve of a possible U.S. default. “It’s a hostage deal,” said Larson in between closed-door meetings with the House Democratic Caucus.

Courtney said it was “far from perfect.” But, he added, “it is also the only viable path to avoiding economic catastrophe.”

Just hours before the final vote was called, everyone in the Connecticut delegation was still wavering. They were frantically reading the budget analysis and the legislative fine print, trying to discern the possible impact of defense spending cuts on Connecticut and the fallout of domestic spending cuts on favored programs.

The agreement, which now heads to the Senate for a mid-day vote Tuesday, would increase the debt limit by $2.1 trillion, enough of a hike to meet the nation’s borrowing needs until 2013. If the debt ceiling is not increased by Tuesday night, the U.S. could begin to default on its financial obligations.

The debt agreement, put together in large part by Vice President Joe Biden and Senate Republican Leader Mitch McConnell on Sunday, would impose caps on discretionary domestic spending, a move that would save $900 billion over the next decade. Of that, $350 billion would come from defense spending and the rest from domestic programs, such as education, transportation, and agriculture.

Another $1.5 trillion in cuts would be achieved one of two ways. One route is through a second debt-reduction package to be crafted by a new bipartisan “super committee” that will be set up under this new proposal.

That panel, to have six Democrats and six Republicans, will be tasked with coming up with $1.5 trillion in additional cuts. It can consider everything from tax increases to entitlement cuts, and the package will be subject to an up-or-down vote in the House and Senate, with no chances for amendment.

If the committee can’t agree on an additional debt-reduction package, then automatic spending cuts will be triggered, split evenly between defense and domestic programs. The triggered cuts would not impact Social Security or Medicaid, two programs that Democrats have long wanted to shield. As for Medicare, a third cherished entitlement program, any triggered cuts would hit providers, not beneficiaries.

The automatic cuts are supposed to serve as an “enforcement mechanism,” a sword hanging over the committee’s head spurring them to an agreement and to winning full congressional approval.

Courtney said one of the first calls he made Monday morning, after learning the details of the deal, was to top Navy officials, wanting their take on the impact of the deal’s immediate and long-term defense cuts. Courtney’s district includes Electric Boat and the New London Naval Submarine Base, and he’s championed a ramp up that would allow EB to increase production from one Virginia class submarine a year to two.

Robert O. Work, undersecretary of the Navy, returned Courtney’s call in the middle of an intense, closed-door meeting between Biden and House Democrats. Courtney said that based on that conversation, the first phase of defense cuts-totaling $350 billion and targeted not only at defense, but also homeland security, foreign aid, and other “security” spending-will not impact Electric Boat or other Connecticut defense interests.

“The word I’m getting from the Navy is that this submarine program should be fine, if that’s the end of it,” he said. But if the automatic spending cuts are triggered, that second phase could slice $400 billion to $500 billion from defense spending.

“That’s a big number,” Courtney said.

In the end though, those concerns were mostly put to rest and Courtney found himself able to support the deal. He said the prospect of default was too grave. And he found a few items in the deal to embrace.

He was happy, for one thing, that the GOP had dropped their insistence on forcing the adoption of a balanced budget amendment to the Constitution as part of the deal.  He also said he was relieved it did not include a second debt-ceiling vote later this fall, but rather would cover the country’s borrowing needs to 2013. That provides “peace of mind,” Courtney said, to the markets and to the public that Congress won’t be at the brink again in six months, as an earlier House Republican version of the bill would have mandated.

Himes, for his part, spent much of the day trying to discern how the tax cut issue would play out. Like other Democrats, Himes said he was worried that revenue would not be a part of the second round.

“The absence of balance… is very troublesome,” Himes said. But he said he was fine with the scope of the spending cuts. “One way or another we were going to have cuts at least this big in the next ten years if we were going to get the country on a fiscally sustainable path,” he said.

On the other side of the ledger, Larson, DeLauro, and Murphy all said they couldn’t overcome their concerns about the proposals heavy reliance on domestic spending cuts. And the absence, in the near term at least, of any tax increases made the deal unpalatable.

The White House has said that if there’s no agreement on a debt-reduction package that includes tax increases, the president can allow the Bush-era tax cuts for the wealthy to expire. Those are scheduled to sunset on Jan. 1, 2013–the same date that the automatic spending cuts would be triggered. “Absent a deal, it would enable the president to use his veto pen to ensure nearly $1 trillion in additional deficit reduction” by not extending those tax breaks, the White House said in a fact sheet on the deal.

But several members of the delegation expressed skepticism that tax hikes would ever be part of the debate.

“There are no revenues on the table,” said DeLauro. She said she was also worried that a second round of debt-reduction, to come later this year, “would put Medicare, Social Security, and Medicaid in jeopardy.”

“The promise that we’re going to live to fight another day on revenues, I’ve heard that before from the Administration,” said Murphy. “This is a long way from what a lot of us have fought for.”

Murphy said the bill was not a compromise, putting almost all the onus of debt reduction on the poor and middle class. “Not one corporate tax loophole is closed.  Not one billionaire will pay a cent more in taxes.  But seniors will lose Medicare providers, and programs for the poor and disabled will be slashed,” he said in a statement. “This bill, which we all had about 24 hours to read and dissect, does virtually nothing to address the root causes of our deficit and instead asks middle class America to pay the check for decades of fiscal mismanagement.”

Larson, too, said he was worried about the potential cuts to Medicare and the broader impact of the discretionary spending caps. “You look at these caps and the appeal for shared sacrifice and seeing none, it’s hard to look someone in the eye and say this is going to change.”

He said the special legislative committee is an abrogation of congressional responsibility and a distortion of the regulator legislative process. “As ugly and awful as this process is, then to throw something else on top of it and to say ‘I’m deferring my response to 12 people in a room, again.’ Nah, I don’t think that’s the way to go,” Larson said.

Larson broke with other top Democratic leaders in his “no” vote. Minority Leader Nancy Pelosi, D-Calif., voted for the deal, as did Rep. Steny Hoyer, the No. 2 Democrat in the House.

Sounding exhausted and drained Monday night, Larson said the debt ceiling debate had been an “emotional roller coaster” and he seemed relieved the ride had ended.

Now on to the Senate, where the deal is nearly assured to pass.

Both Sens. Richard Blumenthal, D-Conn., and Joseph Lieberman, a Connecticut independent, said Tuesday morning that they would support the agreement. Blumenthal said he  had concerns about the defense cuts and the absence of any provisions closing tax loopholes, but would vote yes nonetheless.

Lieberman also said he had deep concerns abou the measure, citing the deal’s focus on cuts in discretionary spending, rather than entitlement programs, as an unbalanced approach.

“It t puts all the burden of getting back toward balance on the so-called discretionary spending,” Lieberman said, unless the special committee comes up with a broader package.

At the same time, it was a first step toward fiscal reform, which he feels is vitally necessary. “This is a significant beginning, as imperfect as it is,” Lieberman said.