One senior Democratic congressman believes a deal will be struck, writes LARA MARLOWEin Washington

VOTES ON duelling plans to resolve the US debt ceiling crisis are a necessary process that will arrive at a compromise in the end, Democratic congressman Richard Neal has predicted in an interview with The Irish Times.

As a member of the powerful House ways and means committee and chairman of the subcommittee on select revenue measures, the Massachusetts congressman is influential in House economic policy, as well as being a leading figure in Irish-American relations.

“It’s obvious that you cannot pass the Boehner Bill in the US Senate. And you cannot pass the Reid Bill in the House of Representatives,” Neal said, referring to a vote in the Republican-controlled House late yesterday on House speaker John Boehner’s Bill to cut $917 billion (€640 billion) over 10 years from the federal deficit.

Senate Democratic majority leader Harry Reid is waiting for the House vote to put forward his own proposal to cut $2.2 trillion in spending.

Both proposals would establish a bipartisan commission to seek further cuts. The main difference between the Bills is that Boehner’s requires another debate and another vote early next year.

“I think that by having a couple of votes in the respective institutions, it might allow for taking the steam out of the system and cooler heads could prevail when both sides at the base of both parties understand that you will not get your way,” Neal said.

“At that point there’s some room for a bargain.”

The treasury and White House say the government will be unable to pay some bills starting next Tuesday, August 2nd. Many predict the crisis will run until the very last minute, but Neal was hopeful it might be resolved sooner.

Neal noted that since the revolutionary war, through the civil war and two world wars, the US has not failed to honour its debts. Without naming the right-wing Tea Party, he said there were for the first time members of Congress who “would use the precipice as a bargaining chip on America’s credit and standing in the world”. It was ironic that “the people who set the fire are now the ones calling the fire department: the Republicans”.

“When Bill Clinton said goodbye on January 19th, 2001, America was staring at a $5.7 trillion surplus; 22 million new jobs had been created in the greatest economic growth spurt in US economic history,” he said.

“The decision was made to cut taxes by $1 trillion in 2001, to go to war in Iraq, to go to war in Afghanistan, to create a prescription drug benefit, to cut taxes again in 2003 by $1.3 trillion. And people ask why we are where we are.”

There have been rumours of a presidential “plan B” that would combine elements of the Reid and Boehner plans as well as the minimalist McConnell plan, drawn up by Republican Senate minority leader Mitch McConnell.

Neal said McConnell and Reid “probably will come to an accommodation” but added that US president Barack Obama was “still very much a player”. He had been wise to back away from negotiations, “to see if . . . the legislative branch working its will can prevail. But he still has the threat of using the veto pen.”

Regarding Boehner’s determination to “hold the president’s feet to the fire” by demanding another debate and vote next winter, Neal said: “If you’re Barack Obama, you understand that having this argument again in February 2012 is nonsensical and . . . would be used to extort from the executive a series of demands that would be untenable for the nation.”

Obama agreed last December to extend tax cuts for the rich enacted as a temporary measure under George W Bush. Obama has again dropped the demand that those tax cuts be ended.

“They have to expire,” Neal said.

Obama’s allowing the tax cuts to continue was “outside the mainstream of Democratic thought”, he continued.

“Democrats opposed the tax cuts when they were first proposed, and we opposed extending them. It’s a major part of the problem.”

Even Alan Greenspan, who as chairman of the Federal Reserve endorsed the tax cuts, now says “it was a mistake and that the rates ought to be allowed to rise to the level of the Clinton years”, Neal said.