Money & Politics with Larry Kudlow

Sen. Mike Crapo: What’s Needed to Pass Debt Reform

Lawmakers in both the House and the Senate are watching and waiting to see if House Speaker John Boehner’s debt plan will come to a vote, and whether it will pass.

House Republican leaders abruptly delayed a vote on the bill to raise the debt ceiling and cut US deficits just minutes before it was to occur Thursday evening.

If and when the bill passes, Democrat leaders in the Senate have said they’ll move to table the bill. Sen. Harry Reid (D-Nev.) is then expected to introduce his bill with modifications.

But Sen. Mike Crapo (R-Idaho), one of the original bipartisan Gang of Six who negotiated their own deficit deal, told Larry Kudlow that while there have been discussions about increasing spending cuts in Reid's plan, no committments have been made yet.

"It has about a trillion dollars in so-called cuts that Republicans just don’t accept as being valid," he said.

Crapo said a deal could be struck if the Reid's plan incorporated "real" spending cuts, not just promises, and has an enforcement mechanism.

“Credit rating organizations … have told us that if we just keep ratcheting up the debt ceiling and authorizing another $2.4 trillion of increases without having some kind of meaningful fiscal reform that they’re downgrade us anyway,” he said.

But meaningful reform is more than just spending cuts, he added.

“We must have the kind of pro-growth tax reform that we have proposed in the Gang of Six or something of similar and equal strength and scope,” Crapo said, “but I don’t agree that we can just ignore the spending side of the equation because we have a good pro-growth tax package."

Crapo did agree that holding up the entire debt ceiling is not a good idea, but he blamed Senate Democrats for killing the first proposal the House sent, as well as for the expected killing of Boehner’s bill.

One of the main issues for Democrats is the fact that Boehner’s plan would raise the debt ceiling in a two-step process, which would spill the debt crisis into 2012.

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