Business eyes debt limit without fear

Business groups are breathing easy despite the approaching deadline for raising the debt ceiling.

In a remarkable turnaround, business lobbyists said they aren’t devoting much time or attention to the need to increase the nation’s borrowing limit by late February. The deed, they said, is as good as done.

“It sure doesn’t sound like they are walking up to the cliff again,” said Jamie Gregory, deputy chief lobbyist of the National Association of Realtors.

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Lobbyists were singing a different tune last fall, when Congress fought into a government shutdown and flirted with default.

At that time, industry warnings about the debt limit came early and often, with business leaders conjuring apocalyptic visions of “disaster” and “recession” during repeated trips to Capitol Hill.

But those some business groups are now projecting a sense of calm, even though Treasury Secretary Jack Lew is pushing Congress to raise the borrowing limit by the end of February.

“There are glimmers of optimism of this getting done in a timely fashion,” said James Ballentine, chief lobbyist for the American Bankers Association.

Lobbyists attribute their optimism to December’s budget deal, which they said would help congressional leaders avoid another round of brinkmanship.

“There is more optimism this time, with the omnibus being passed and the comments made by various leaders, that they are going to come to an agreement on lifting the debt ceiling,” Gregory said.

Other industry lobbyists agreed that the climate on Capitol Hill has cooled since last fall, when Republicans were demanding changes to ObamaCare in return for a government funding bill.

Republicans ultimately backed down after a 16-day federal shutdown, winning a minor change to ObamaCare before passing legislation to reopen the government and raise the debt limit.

The shutdown was considered a political disaster for the GOP, as they were hit with historically bad poll numbers and a backlash from the business community.

Several business lobbyists told The Hill Republican lawmakers learned their lesson.

“Lessons can be learned multiple times, but perhaps the lesson has been learned on both sides of the aisle that this is something not to play around with,” Ballentine said.

“The Republican House members don’t want to change the subject at this point” away from ObamaCare, said David French, senior vice president for government relations for the National Retail Federation. 

Despite winning a relatively clean debt-limit increase last year, business groups said Obama could be drawn into negotiations with Republicans over entitlement spending.

Blair Latoff Holmes, a spokeswoman for the Chamber of Commerce, said her group “would hope and support that Congress and the administration would agree on reforms to entitlement spending and other changes to get our fiscal house in order, but ultimately, the primary goal in the debt ceiling debate is to protect the full faith and credit of the U.S. government.” 

Still, senior officials at the Chamber said they don’t believe a default crisis is in the cards.

“I do not believe we will default on the debt. I do not believe we will close the government. I believe we will move forward on this deal and find an amicable way to get it done,” Tom Donohue, the Chamber’s president and CEO, told reporters earlier this month.

There are signs the debt-limit fight won’t be drama-free.

Republican lawmakers say they are not willing to give the White House a debt-limit hike with no strings attached and expect Obama to make “concessions.” 

Democrats have scoffed at Republican demands and said the GOP would cave.

In a letter to colleagues on Friday, Senate Budget Committee Chairwoman Patty Murray (D-Wash.) said the GOP retreated twice on the debt limit in 2013.

“We were glad that Republicans finally did, for the second time in a year, give up their demands and allow Congress to suspend the debt ceiling so the federal government could pay its bills and we could avoid a self-inflicted economic catastrophe,” Murray wrote.

If the GOP balks at a debt-limit bill, the Obama administration could try to squeeze Republicans, as they have before, by rallying business leaders against them.

“A robust political debate on appropriate federal spending levels and the mushrooming U.S. debt is fair enough. However, there is little to be gained from overheated talk about not extending the debt ceiling,” said Paul Merski, chief economist for the Independent Community Bankers of America.

Last fall, Treasury Secretary Jack Lew met with a number of industry groups to discuss the debt ceiling and drum up public pressure on Republicans.

Lew, Treasury Under Secretary for Domestic Finance Mary Miller and other senior department officials have already been in touch with business leaders this year to talk about the debt ceiling. During his trip last week to the World Economic Forum in Davos, Switzerland, Lew spoke to a number of executives about the issue, according to a Treasury representative.  

Business lobbyists said they would be watching the debt-ceiling debate closely and expect to like what they see.

“Congress and the administration should take swift action to raise the debt ceiling and promote fiscal stability. The Roundtable looks forward to reviewing policymakers’ proposals to raise the debt ceiling,” said Matt Miller, the Business Roundtable’s vice president of tax and fiscal policy.