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Cantor rejects debt ceiling plan proposed by Senate Republicans

From Deirdre Walsh, CNN Congressional Producer
House Majority Leader Eric Cantor: "Currently, there is not a single debt limit proposal that can pass the House."
House Majority Leader Eric Cantor: "Currently, there is not a single debt limit proposal that can pass the House."
  • Rep. Eric Cantor says no acceptable deals are under discussion
  • Sources say that includes the plan pushed by Sen. Mitch McConnell
  • McConnell says a default will hurt Republicans and will not happen
  • The Republican plan would give Obama power to increase the debt ceiling

Washington (CNN) -- A day after Senate Republican Leader Mitch McConnell proposed a backup plan to raise the debt ceiling if a deficit reduction deal with Democrats can't be reached, House Majority Leader Eric Cantor torpedoed the proposal, saying it doesn't have any chance of passing in his chamber.

"Currently, there is not a single debt limit proposal that can pass the House of Representatives," Cantor, R-Virginia, said in a statement Wednesday. Though the statement does not directly refer to McConnell's plan, Republican congressional sources said Cantor intended to make the point that the Senate GOP leader's proposal is not going anywhere in the House.

McConnell's proposal would allow President Barack Obama to make three short-term increases to the debt ceiling between now and the end of 2012. Congress could vote against an increase by passing a resolution of disapproval to Obama's move, and the president could then veto the resolution of disapproval.

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It would be unlikely that Congress would have enough votes to override the presidential veto, and the debt ceiling increases would stand.

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Negotiations between Obama and congressional leaders from both parties have bogged down over the issue of tax increases. Obama wants increased tax revenue to be part of a deal, while Republicans refuse to consider any higher tax rates.

In an interview Wednesday, McConnell told WHAS radio in his home state of Kentucky that his proposal was necessary because an acceptable deficit reduction deal was proving unattainable and the United States must avoid a default that would be "bad for Republicans."

"Given a choice between a bad deal and avoiding default, I choose to avoid default," McConnell said, adding, "If we were to go into default ... the practical effect of that will be to allow the president to make us co-owners of a bad economy."

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He also said defaulting is "completely and totally unacceptable, and it's not going to happen."

However, House conservatives strongly opposed McConnell's framework, which would give Obama the authority to raise the debt ceiling without requiring any spending cuts in return. McConnell's plan stipulated the president list spending reductions in return for the increase in borrowing authority, but did not require the cuts be enacted.

Prominent conservatives including Republican presidential candidate Newt Gingrich and blogger Erick Erickson criticized the McConnell plan, and a House GOP leadership aide said the proposal "falls short of (House Speaker John Boehner's) pledge that any increase must have spending cuts equal to the increase."

In response to Cantor's statement effectively killing the McConnell plan, Democratic Rep. Chris Van Hollen of Maryland said Republicans were undermining all efforts for a deficit deal, even their own.

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"You have the Republicans who walked out of the Biden talks," Van Hollen said. "You have a speaker of the House, who was close to entering into a framework agreement with the president of the United States, walk out because other Republicans undercut him. And now you have Republicans trashing a proposal put forward by the Republican leader in the Senate."

To Van Hollen, the message from Republicans is that they are willing to "tank the entire economy" unless they "get things 100%" their way.

"That's just irresponsible," Van Hollen said.

In his statement on Wednesday, Cantor repeated the long-standing Republican insistence that any tax increases sought by Obama in a deficit deal would never pass the House. Cantor suggested negotiators concentrate instead on finding agreement on major entitlement reforms and spending cuts.

"I believe the path forward is to focus on what we can agree upon, and though it doesn't go as far as our budget, House Republicans can likely agree with the general spending cuts and entitlement changes in the 'big deal' proposed by the president," Cantor said.

Shortly before Cantor's statement was released, Ohio Republican Rep. Steve LaTourette pronounced the proposal "DOA" in the House saying, "When I first heard about it yesterday, I thought it was a joke."

"I guess I would wait for Sen. McConnell to tell where the genius behind it is, and maybe I'm too stupid to figure it out, but on face value, it's a nonstarter," LaTourette added.

Earlier Wednesday, Minnesota Republican Rep Michele Bachmann, who is running for the 2012 GOP presidential nomination, also made it clear she opposed McConnell's plan.

"I'm 'no' on raising the debt ceiling right now, because I've been here long enough that I've seen a lot of smoke and mirrors in the time that I've been here," Bachmann said.

Senate Democrats quietly praised McConnell's plan, and while they recognized it had problems in the GOP-led House, they privately still believe that as the deadline approaches, it could be a viable option for avoiding a default.

House Democratic Leader Nancy Pelosi signaled she was open to the backup plan on Wednesday, noting that by putting the proposal forward, McConnell recognizes the debt limit needs to be raised. For that reason, Pelosi said, the plan has merit.

White House Press Secretary Jay Carney made the same point to reporters, but said Obama will keep pushing for a comprehensive deficit reduction agreement that would make the McConnell plan unnecessary.

CNN's Ted Barrett and Tom Cohen contributed to this report.