Business groups likely to align with president in debt-ceiling fight

The Obama administration will likely have the support of major business groups as it works to round up Republican votes for raising the federal debt ceiling. 

Groups such as the National Association of Wholesaler-Distributors (NAW), the U.S. Chamber of Commerce and the National Association of Manufacturers (NAM) plan to step up their advocacy for a debt-limit increase as the deadline for congressional action draws closer.

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Lobbyists for several major trade associations told The Hill that they have already had discussions with first-term House Republicans about the necessity of lifting the debt ceiling to avoid a default on U.S. debt. 

The GOP’s large freshman class — elected on promises to cut spending — is seen as a major obstacle to raising the borrowing limit.

The Treasury Department has set a make-or-break deadline of early July for raising the debt ceiling. House Republicans want long-term deficit reduction attached to the vote, but the White House has balked at that request and called instead for a “clean” debt-ceiling increase.

Business groups are less concerned about whether a long-term deficit-reduction plan is attached to the debt-ceiling vote and are focused on making sure that the limit is increased.

NAW President Dirk Van Dongen compared the vote to “a check-the-box exercise” for lawmakers.

“I’m more concerned that it gets done,” Van Dongen said. “If we get it done with ornaments, let’s get it done. If we can’t get it done with ornaments, let’s get it done anyway.”

Other trade groups have lined up behind raising the debt limit. 

“We have been very upfront. We support an increase in the debt limit. We need to meet our obligations,” said Dorothy Coleman, vice president of tax and domestic economy policy for the NAM. “There is a huge downside to default.” 

NAM remains neutral on the question of attaching a long-term deficit-reduction plan to the debt-ceiling vote. 

“We have been neutral on how it gets done. Our interest is that it does get done in a timely fashion,” Coleman said.

Business lobbyists didn’t mince words when describing what could happen to the economy if the country’s debt ceiling isn’t raised.

“This would be akin to a major international corporation just saying, ‘We are not going pay our bills next week’ — but multiply it a thousand-fold, a million-fold,” Van Dongen said.

There was a glimpse of that possible future earlier this week. On Monday, Standard & Poor’s Ratings Services lowered its outlook on U.S. debt from “stable” to “negative,” causing the stock markets to fall.

The Chamber is also concerned about lawmakers not raising the debt limit. Speaking at a breakfast hosted by The Christian Science Monitor more than a week ago, Bruce Josten, the Chamber’s executive vice president for government affairs, said his group has already begun organizing a coalition in favor of raising the debt limit. 

“The leadership knows that we favor supporting and increasing the debt limit. They know that I have a letter in the can. They know that I’m organizing a coalition to raise the debt limit,” Josten said. “Nothing new; typical behavior for us and the rest of the business community.”

Josten said the Chamber has been for raising the debt ceiling in the past no matter which party was running Congress or the White House. He predicted President Obama might have to accept some measures attached to the debt-limit vote in order to win approval of the borrowing increase. 

Van Dongen said he would “almost certainly” join Josten’s coalition and lobby for raising the debt ceiling.

“It’s not a good idea to send a message to the creditors of this nation that we cannot meet our obligations,” Van Dongen said.