GOP Considers Short-Term Debt Limit Hike
House Republican leaders are considering a short-term increase in the U.S. debt limit as a possible way to break the gridlock that threatens the nation with an unprecedented default in as little as a week, officials said Wednesday night.
These officials said there is far less urgency inside the leadership about ending the current nine-day partial government shutdown, which has caused inconvenience and financial concern for many individual Americans but appears not to threaten the widespread economic damage a default might bring.
The officials declined to say what conditions, if any, might be attached to legislation to raise the $16.7 trillion debt limit for an undetermined period, perhaps a few weeks or months. The GOP rank and file is expected to meet privately to discuss the issue on Thursday, before a delegation led by Speaker John Boehner goes to the White House to meet with President Barack Obama.
The officials describing the developments late Wednesday spoke only on condition of anonymity, saying they were not authorized to disclose details of private deliberations.
Obama has said he won’t agree to sign a debt limit increase if conditions are attached. Republicans indicated several days ago they intended to seek spending cuts to reduce deficits, measures to roll back environmental regulations and changes in the nation’s 3-year-old health care law.
More recently, the GOP-controlled House has passed legislation to create a 20-member group of lawmakers from the House and Senate to negotiate over those and other issues. The bill makes no mention of an increase in the debt limit, but the two topics could be combined in a potential face-saving way out of the impasse.
The disclosures came as Obama met at the White House in late afternoon for more than an hour with House Democrats. He told them that while he would prefer legislation extending the Treasury’s borrowing ability beyond the next election, he would also sign a shorter-term bill.
Treasury Secretary Jack Lew has told lawmakers they must raise the debt limit by Oct. 17 to avoid risking a default, but neither house has yet scheduled a vote.
In the Senate, Democrats have proposed a no-strings-attached $1 trillion increase in borrowing authority that is designed to prevent a recurrence of the current confrontation before the 2014 elections. A test vote is scheduled for the weekend, and Republicans have yet to indicate how vigorously they might oppose it.
In addition to House leadership conversations, a group of conservatives met privately during the day for what several officials described as a wide-ranging discussion on the debt limit and the threat — or lack of it — posed by default.
No consensus was reached, but among those who spoke was Rep. Paul Ryan, R-Wis., the 2012 GOP vice presidential candidate who is chairman of the House Budget Committee and a prominent deficit hawk. In an op-ed article published during the day in The Wall Street Journal, he wrote, “We need to pay our bills today–and make sure we can pay our bills tomorrow. So let’s negotiate an agreement to make modest reforms to entitlement programs and the tax code.”
Raising the cost of Medicare for better-off beneficiaries and making changes to the tax code are perennials in budget negotiations, and precisely the type of item Obama says he is willing to discuss — but only after the government is open and the debt limit raised.
The private conversations stood in contrast to political maneuvering that characterized the day at the Capitol.
Its approval ratings scraping bottom, Congress took no discernible steps to end the nine-day partial government shutdown or to head off threatened default.
Instead, the House passed legislation that the Obama administration already had rendered unnecessary — on providing death benefits to families of military forces who die — while Boehner and Democratic leader Nancy Pelosi met face-to-face — and promptly disagreed even about which side had requested the get-together.
“Enough is enough,” said Barry Black, the Senate chaplain who has delivered a series of pointed sermonettes in recent days as lawmakers careen from crisis to crisis.
With Lew on tap to testify before lawmakers on Thursday, officials said he was expected to reiterate that Congress needed to raise the government’s borrowing limit by Oct. 17 to be sure of preventing default.
Despite warnings from leaders of both political parties that a financial default could plunge the economy into recession, cause interest rates to rise and home values to plummet, one Republican lawmaker, Rep. Mo Brooks of Ala., said a default wouldn’t be the worst calamity to befall the country.
“Insolvency and bankruptcy” would be worse, he said, warning that that would be the result of yet another increase in the debt limit without attaching measures to bring down the federal budget deficit.
The nation’s largest manager of money market mutual funds was taking no chances. It said it had been selling off government debt holdings over the past couple of weeks and no longer held any that would come due around the time the nation could hit its borrowing limit. Fidelity Investments expects Congress to take the necessary steps to avoid default, but “we have to take precautionary measures,” said Nancy Prior, president of Fidelity’s Money Market Group
The partial shutdown ground on, although an Associated Press-GfK poll suggested the impact was anything but uniform. Only 17 percent of those polled said they or their households had experienced any impact, while 81 percent said they had not.
Who’s fault? Some 62 percent said Republicans were mostly or entirely to blame for the partial shutdown, which began on Oct. 1, while 49 percent said as much for President Barack Obama.
There was widespread agreement on one point. The country is widely dissatisfied with elected lawmakers.
A new Gallup poll put approval for Congress at 11 percent, a mere one in every nine adults. The AP-GfK survey made it 5 percent approval — and only 3 percent among independents, whose votes are the main prize in next fall’s midterm elections. Nationally, a whopping 83 percent of adults disapprove of Congress’ actions.
Inside the Capitol, neither private meetings nor public votes offered any hint of progress toward ending the latest gridlock.
Republicans are seeking negotiations on budget, health care and other issues as the price for reopening the government and raising the debt limit. Obama and Democrats say no talks unless legislation is first passed.
The House voted 252-172 to reopen the Federal Aviation Administration. Democrats generally opposed the measure and the White House issued a veto threat, saying the government should be reopened all at once, not on a piecemeal basis.
(Copyright 2013 by The Associated Press. All Rights Reserved.)