Though several Republicans have been threatening a big showdown over the debt limit and government funding with President Obama this fall, it's possible that maybe we won't approach total fiscal calamity this time. In an interview with The National Review's Robert Costa, Senate Minority Leader Mitch McConnell sounds tough, but outlines what could be the outlines of a deal. And top Obama aides have been meeting with eight Senate Republicans to figure out a compromise on these issues, The Wall Street Journal's Peter Nicholas and Kristina Peterson report. But there probably won't be a longer-term "grand bargain."
And McConnell, who is up for reelection in 2014 and facing a conservative challenger in the Republican primary, says lots of aggressive-sounding things that might play well with conservative voters. He even makes a gay joke about Sens. John McCain and Chuck Schumer, who worked together on immigration: "You know, I was kidding [New York Democrat Chuck Schumer] and McCain the other day, and asked, 'When are you all getting married? It's getting almost embarrassing.'"
McConnell warns Democrats, "The tax issue is over." But he suggests Republicans are open to preventing a second year of the sequester. "You want sequester relief? Then let’s talk about a reduction in entitlement spending," he says. "I think a place to talk is on things like chained CPI." Obama has already said he'd support chained CPI, which is a less generous way of calculating the cost-of-living adjustments to Social Security benefits. McConnell also floats raising the age of eligibility for Medicare, which Democrats do not like. McConnell says, "In return for that, we could trade less spending reduction on the discretionary side, because we all know the biggest challenge is actually not on the discretionary side, but on entitlements. To me, that’s a better place to go in the fall than signaling that you’re open to raising taxes."