Debt-ceiling gambit stirs GOP debate

Debt-ceiling gambit stirs GOP debate
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President Trump’s apparent willingness to scrap the debt ceiling has sparked debate among Republicans, with some suggesting the system could be changed to make fiscal reforms more likely.

Trump appeared open to nixing the borrowing limit after his recent funding deal with Democrats, telling reporters there are a “lot of good reasons” to get rid of it.

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The financial cap is a perennial problem for Republicans, who have to contend with competing demands from conservatives, who are loath to raise the borrowing limit, and Senate Democrats, whose help they need to get 60 votes.

But GOP leadership is showing little appetite for abolishing the debt ceiling altogether, warning it would make it even harder for lawmakers to control federal spending.

“Getting Congress to give up a tool like that would probably be quite a challenging undertaking,” Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellSenate passes 0B defense bill Overnight Health Care: New GOP ObamaCare repeal bill gains momentum Overnight Finance: CBO to release limited analysis of ObamaCare repeal bill | DOJ investigates Equifax stock sales | House weighs tougher rules for banks dealing with North Korea MORE (R-Ky.) said on Tuesday, predicting the debt ceiling will continue.

Speaker Paul RyanPaul RyanRyan: Graham-Cassidy 'best, last chance' to repeal ObamaCare Ryan: Americans want to see Trump talking with Dem leaders Overnight Finance: CBO to release limited analysis of ObamaCare repeal bill | DOJ investigates Equifax stock sales | House weighs tougher rules for banks dealing with North Korea MORE (R-Wis.) was more adamant.

“There’s a legitimate role for the power of the purse of the Article 1 powers, and that’s something we defend here in Congress,” Ryan told reporters.

That remains the overwhelming view among Republicans, who have come to see debt-ceiling votes as an opportunity to enact fiscal restraints.

“I respect the president, but I disagree with him on that,” said Rep. Tom Cole (R-Okla.). “I would not be supportive of getting rid of the debt ceiling and neither would most of my colleagues.”

Sen. John CornynJohn CornynNew GOP ObamaCare repeal bill gains momentum Week ahead: Senators near deal to stabilize ObamaCare markets GOP eying 'blue slip' break to help Trump fill the courts MORE (Texas), the No. 2 Senate Republican, also said he disagrees with the president.

“Frankly, we need to do more than just lift the debt ceiling; we need to actually deal with the debt,” Cornyn said. “I think it’s a useful exercise to remind us what a threat the debt could be to our national security and our financial well-being.”

But Democrats are expected to keep the issue in the spotlight heading into the fall, especially now that Trump has demonstrated a willingness to take their side in major fiscal fights. 

And even some conservatives are sending early signals that they are open to changes in the debt-ceiling structure so long as there is some mechanism for controlling the debt and spending.

One idea gaining steam is tying the debt ceiling to budget resolutions or spending bills. That would force lawmakers to authorize more debt at the same time they authorize government spending.

Democrats imposed such a system during the late 1970s and ’80s. It was then known as the “Gephardt Rule,” after Rep. Richard Gephardt (D-Mo.), who came up with the idea of having the debt ceiling automatically raised when a budget was passed. Republicans did away with the rule in 1995.

“Thus, Congress would have to vote in favor of lifting the debt ceiling when supporting the policy that necessitates it, which might give legislators more pause before adding to the debt,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, wrote in a recent Washington Post op-ed.

Some conservative Republicans said they’d be open to such a system.

“In any bill when we’re spending money we don’t have, there ought to be an explicit debt-limit increase for the amount of money that that bill is going to force us to borrow. That would be a very sobering moment to a lot of members who might otherwise be inclined to pull out the credit card,” said Rep. Tom McClintock (R-Calif.), who heads the conservative Republican Study Committee’s Budget and Spending Task Force.

Moving forward, he added, he would begin offering amendments adding the requisite debt-limit increases to spending bills.

The Republican Study Committee has put forward plans to “defang” the debt ceiling that would ensure the nation would not default on its debt and instead institute severe spending restraints in the event it was not lifted.

House Freedom Caucus Chairman Mark Meadows (R-N.C.), lamenting what he sees as congressional Republican leadership’s refusal to add conservative riders to the debt ceiling, said he’d support the reform but believed it was unlikely.

“I would be for that, that’s fine, that basically puts a cap on everything. But I can’t imagine the appropriators would be supportive of that,” he said.

Rep. Trent FranksTrent FranksGOP rep: North Korea wants Iran-type nuclear deal Debt-ceiling gambit stirs GOP debate GOP rep shares story of brother with Down syndrome, condemns abortions MORE (R-Ariz.), another House Freedom Caucus member, said Republicans could use the new system as leverage.

“I’m all for it, something where we could use the leverage of the debt ceiling to bring us back to some spectrum of fiscal sanity,” he said.

In addition to needing to clear the House, nixing or changing the debt ceiling would likely need 60 votes in the Senate.

Raising the debt ceiling used to be a routine, albeit painful, vote for the majority in Congress. But that changed dramatically in recent years.

In 2011, a Republican attempt to use the debt ceiling to enact spending restrictions resulted in credit ratings agency S&P downgrading the U.S. credit rating. In 2013, attempts to leverage the debt ceiling to defund ObamaCare resulted in higher borrowing costs.

The next debt-ceiling fight is unlikely to arrive until the spring. While the funding deal passed by Congress only lasts until Dec. 8, the Treasury Department will likely use “extraordinary measures” to ensure that lawmakers have until the spring to raise the borrowing limit again.

Sen. Ron JohnsonRonald (Ron) Harold JohnsonSenate Dems hold floor talk-a-thon against latest ObamaCare repeal bill Sen. Cassidy plans to bring down Medicaid Senate committee schedules hearing on health care block grants MORE (R-Wis.) said he would be “open” to discussions on the borrowing limit, but there needs to be some mechanism for Congress to debate and control spending.

“The main value of having the debate over the debt ceiling is that historically it’s about one of the few legislative requirements that prompts meaningful structural reforms,” he said.

“We need something to prompt [action], encourage discussion and debate on these things.”