Lead Story Warns G.O.P. Spending Cut Demands May Trigger Financial Crisis, Damage Party

New York Times reporter Jackie Calmes' latest front-page story on the budget battle displayed typical Times' labeling bias, with 'angry conservatives' but no liberals: 'Debt Talk Mired, Leader For G.O.P. Proposes Option – Republicans Are Split – Plan to Let Obama Raise the Borrowing Limit Meets Resistance.' Calmes also paid the Republican leadership a backhanded compliment for trying to stop their conservative base from provoking a financial crisis.

On Tuesday, Calmes claimed on the front page that Obama was 'repositioning' himself as a centrist (after years of the Times insisting he already was one).

Calmes wrote Wednesday:

From the White House and Congress to financial centers, pessimism spread on Tuesday about the prospects of a debt-limit deal between President Obama and Republicans, prompting the Senate Republican leader to propose a 'last-choice option' that piqued the administration's interest but angered conservatives in his own party.

The leader, Senator Mitch McConnell of Kentucky, said a bipartisan budget-cutting deal is probably out of reach, making it unlikely that Republicans would approve an increase in the government's debt limit by Aug. 2. To prevent default, he proposed that Congress in effect empower Mr. Obama to raise the government's borrowing limit without its prior approval of offsetting cuts in spending.

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.

Calmes gave the G.O.P. leadership a backhanded compliment for insisting on fiscal responsibility before the 'deep spending cuts' demanded by conservatives, and forwarded White House fears of the Republican rank and file in Congress.

While Mr. McConnell's plan would face an array of political and perhaps constitutional issues, it signaled that Republican leaders did not intend to let conservative demands for deep spending cuts provoke a possible financial crisis and saddle the party with a reputation for irresponsible intransigence. And with prospects for a broad budget deal having dimmed, Mr. McConnell's plan would shift both substantive and political responsibility onto Mr. Obama, forcing him to take almost sole ownership of a debt-limit increase and any consequences from not doing more to address the budget deficit.

The longtime conservative activist Brent Bozell encouraged followers online to call Mr. McConnell's office, saying he had 'betrayed the trust of the American people.' And Newt Gingrich, a Republican presidential candidate, wrote on Twitter, 'McConnell's plan is an irresponsible surrender to big government, big deficits and continued overspending.' Yet Mr. Gingrich is no stranger to the risks in a showdown with a president of the other party; in the mid-1990s, as House speaker, he forced a government shutdown in a budget fight with President Bill Clinton that backfired against Congressional Republicans.

The conservatives' reaction against Mr. McConnell, coming after their earlier attack on Mr. Boehner, raised the prospect that the White House has long feared — that Republican leaders cannot lead a rank-and-file membership that is defiantly opposed to compromise with Mr. Obama.

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