With both parties in a stand-off over tax increases and cuts to entitlement programs, Senate Minority leader Mitch McConnell is proposing a "back-up" plan to avoid a default. The proposal would give the President authority to raise the debt limit in three installments until the 2012 election, without having to agree to spending cuts up front. President Obama would also have to submit proposals for spending cuts with each request to raise the debt ceiling. Senator McConnell says the plans is not his first choice, but Republicans want to send a signal to the markets that there is a way out. House Speaker John Boehner echoed the sentiment on FOX News last night. He said, "I think Mitch has done good work." But McConnell's plan is already drawing a backlash from many Republicans who are upset cuts to entitlement programs are off the table. Former House Speaker Newt Gingrich calls it an "irresponsible surrender."
On the show this morning, Pat Buchanan called the proposal a "strategic retreat."
Joe added that Sen. McConnell's proposal destroys the GOP's negotiating power. "What is happening… [with Sen. Mitch McConnell and Rep. John Boehner] – that’s not the Republican base speaking, that’s Wall Street speaking through them. They, when push comes to shove, are getting too many calls from Wall Street and want everyone to know that ‘We’re talking a tough game, but we’re never going to push the president or the Democrats up to the wall over spending cuts. You’re getting your debt ceiling increase.’"