NEW YORK TIMES: The Senate Republican leader, Mitch McConnell of Kentucky, said Tuesday that a bipartisan budget deal with President Obama was probably out of reach, and he proposed a plan under which the president could increase the federal debt limit without Congressional approval for offsetting spending cuts. Mr. McConnell’s proposal reflected a growing sense of pessimism on Capitol Hill about the prospects that Mr. Obama and Congressional leaders could come to terms on a budget deal before the government’s borrowing authority hits its limit on Aug. 2 Mr. McConnell’s proposal would give Mr. Obama sweeping power to increase the government’s borrowing authority, in increments, by up to $2.4 trillion — enough, it is estimated, to cover federal obligations through next year — only if Mr. Obama specified spending cuts of equal amounts. But Congress would not have to approve the spending cuts prior to the debt-limit increase. It is not clear whether House Republicans would sign on to such a measure, given their drive to extract deep spending cuts in return for any debt-limit increase. MORE
NEW YORK TIMES: Administration officials welcomed the McConnell initiative for at least signaling that both parties’ leaders were committed to averting a potential economy-shaking government default; many Democrats in Congress saw it as a way to avoid the sort of deep cuts in Medicare, Medicaid and Social Security that Republicans have sought as the price of their votes for a debt-limit increase. But many conservatives immediately assailed Mr. McConnell’s proposal as a panicky sell-out, much as they in recent days had attacked the House Republican leader, Speaker John A. Boehner, for privately discussing with Mr. Obama a debt-reduction deal that could raise revenues as well as cut spending — ultimately forcing Mr. Boehner to retreat. Mr. Boehner, though, suggested he could be open to the McConnell proposal, highlighting concern among the Republican leadership about how the showdown with the administration would end, the blame the party could suffer if a debt-limit crisis hurt the economy and the challenge of leading their rank and file into a compromise. MORE