Top Senate Republican key figure in debt deal

Senate Republican Leader Mitch McConnell displayed his skills as a dealmaker to avert an unprecedented debt default that could have blown a hole in the U.S. economy and stung his party in next year's elections.

With polls showing Americans see his Republicans as more stubborn and unwilling to compromise than President Barack Obama's Democrats, McConnell reached out to Obama a week ago to end a prolonged stalemate and find common ground.

Thanks largely to McConnell, the Senate is expected to give final approval on Tuesday to a compromise that raises the debt ceiling to avert a default while cutting spending. McConnell hopes it also shields his Grand Old Party from voter backlash.

"Mitch is very, very smart and very, very good at politics," said Ted Kaufman, a Democrat who served with McConnell in the Senate. "I think McConnell's top concern is 'How do I save the Republican Party?' If the GOP goes down, Mitch McConnell goes down."

Depending on how things work out, McConnell could get his wish and run the Senate in 2013 -- provided Republicans pick up at least four seats to take control from the Democrats.

He will also have to survive the ire of the far right, particularly members of the conservative Tea Party movement, many of whom opposed any hike in the $14.3 trillion debt limit.

"He has neither courage nor convictions," groused Judson Phillips, founder of Tea Party Nation, one of the movement's biggest groups.

JUMP STARTED TALKS

The proposed deal, which won the approval on Monday of the U.S. House of Representatives, would cut at least $2.1 trillion from the deficit over 10 years while raising the U.S. borrowing authority by the same amount.

The deal was welcomed by Wall Street where investors see McConnell as "one of the needed adults in the room," said Chris Krueger, an analyst at brokerage MF Global.

McConnell, 69, became the key Republican in debt-limit talks after his counterpart in the House, Speaker John Boehner, failed to obtain an agreement that would tackle long-term deficits by cutting spending and raising revenue.

McConnell prodded Obama to take the lead and spell out his parameters to jump start stalled negotiations, which led to a flurry of telephone calls with the president and Vice President Joe Biden that helped forge a deal.

McConnell has been a key figure in a number of bipartisan deals. In December, he and Biden held secret talks that led to an extension of Bush-era tax cuts for millions of Americans.

Last month, McConnell and Senate Democratic Leader Harry Reid drafted a fallback plan to authorize Obama to raise the debt limit, with Congress having the power to block it only with a two-thirds majority vote. Their proposal would have also created a 12-member deficit-cutting congressional panel.

The McConnell-Reid measure was never drafted into formal legislation, but it surfaced as key elements in the final deal that the Senate Republican negotiated primarily with Biden.

STOP OBAMA RE-ELECTION

While McConnell and Biden are friends, the Republican leader has been a thorn in Obama's side, routinely using Senate rules to slow down or block his initiatives.

He drew fire last year when he declared that his top goal was to deny Obama a second term.

While Tea Party members see McConnell as a lame conservative, he shares their goals of slashing U.S. spending and balancing the federal budget.

But unlike the Tea Party, McConnell fretted that a U.S. default could push up interest rates, roil financial markets and perhaps send the United States into another recession.

And McConnell feared voters would pin Republicans with much of the blame and punish them on Election Day 2012.

A Reuters/Ipsos poll last week found that 31 percent of respondents held Republican lawmakers responsible for the debt impasse while 21 percent blamed Obama and 9 percent blamed Democratic lawmakers.

Appearing last month on a conservative talk show, McConnell explained his desire to cut a deal and avert default.

"If we go into default he (Obama) will say that Republicans are making the economy worse and try to convince the public, maybe with some merit," McConnell said.

"That is very bad positioning going into (an) election."