Conservatives demand spending reforms for hiking debt ceiling

Conservatives demand spending reforms for hiking debt ceiling
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Conservative leaders in the Senate and House on Monday said they would not support raising the nation’s debt limit without significant spending reforms, increasing pressure on GOP leaders ahead of a Nov. 3 deadline. 

Substantive talks between President Obama and Republican leaders have yet to get off the ground because of uncertainty over who will succeed Speaker John BoehnerJohn Andrew BoehnerLobbying world A new kind of hero? Last week's emotional TV may be a sign GOP up in arms over Cheney, Kinzinger MORE (R-Ohio) and what can pass the lower chamber. 

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It became more clear Monday, however, that any proposal to raise the debt ceiling without major fiscal reforms will not pass the House without Democratic votes.

That means BoehnerJohn Andrew BoehnerLobbying world A new kind of hero? Last week's emotional TV may be a sign GOP up in arms over Cheney, Kinzinger MORE or his successor will either have to give in to Democratic demands for a clean debt-limit increase or face the wrath of conservatives who have roiled leadership races in the House.

Sen. Rand PaulRandal (Rand) Howard PaulWhite House debates vaccines for air travel Senate lawmakers let frustration show with Blinken Rand Paul: 'Hatred for Trump' blocking research into ivermectin as COVID-19 treatment MORE (R-Ky.), who is running for president, and members of the House Freedom Caucus, which played a central role in pressing Speaker John Boehner (R-Ohio) to resign, want to attach to debt legislation a plan to balance the budget in five years. 

“I think it’s important that we use this leverage,” Paul told reporters during a telephone press conference Monday afternoon, noting that the House passed a similar proposal attached to the debt limit in 2011 and it resulted in Obama agreeing to historic cuts to discretionary spending. 

Paul said Republicans he has met across the country while campaigning have pressed him not to let a clean extension of borrowing authority sail through the Congress. 

He says members of the House Freedom Caucus will back his demand.

“Those in the Freedom Caucus are hearing the same message that people want us to exert leverage to use the power of the purse,” he said. 

“The whole purpose to have a debt ceiling is to sit back and use it as an opportunity to figure out why you’re borrowing so much money,” Rep. Mick Mulvaney (R-S.C.), a co-founder of the House Freedom Caucus, told reporters on the call. 

Paul and Mulvaney say the debt-limit increase should be paired with a plan to cut the deficit, cap future spending and pass a balanced budget amendment to the debt-limit increase. 

The proposal they discussed would cut $207 billion from the budget this year but protect Social Security, Medicare, military pay and veterans’ benefits. 

It would provide a “glide path” to reducing federal spending to 18 percent of gross domestic product in five years. Federal spending comprised just over 20 percent of GDP in 2014. 

It would not allow another debt-limit increase until Congress passes a balanced budget amendment and sends it to states for ratification.

“There’s clearly support over here in the House,” Mulvaney said of the proposal.

But time is running out and so far Republican leaders have not staked out nearly as strong a position as they did four years ago, when they forced Obama to agree to historic cuts to discretionary spending.

If Obama and his Democratic allies were to agree to another round of cuts, they would have much less time at the negotiating table than in 2011.

Treasury Secretary Jack LewJacob (Jack) Joseph LewThe Hill's Morning Report - Biden argues for legislative patience, urgent action amid crisis On The Money: Senate confirms Yellen as first female Treasury secretary | Biden says he's open to tighter income limits for stimulus checks | Administration will look to expedite getting Tubman on bill Sorry Mr. Jackson, Tubman on the is real MORE last week revised the expiration of the debt limit to Nov. 3, two days earlier than previously estimated.

He warned on CNBC’s “Squawk Box” Monday that haggling over the proposal until the last minute could cause an accidental default “that would be terrible.” 

The effort by Paul and Mulvaney to weld some kind of fiscal reforms to a bill raising the debt limit has broad support among conservatives.

The Republican Study Committee (RSC), another conservative group that represents the majority of the House GOP conference, is working on its own plan to balance the federal books in under 10 years and attach it to debt-limit legislation. 

“Let’s say there will be three essential pieces. We still have to reform the spending profile in the federal government; number two is we still need greater economic growth so we’ll have an economic growth provision, and the third thing is we’ve got to have the process that allows us to get those things done,” Rep. Bill FloresWilliam (Bill) Hose FloresThe Hill's Morning Report - Presented by the UAE Embassy in Washington, DC - Calls mount to start transition as Biden readies Cabinet picks Hillicon Valley: House votes to condemn QAnon | Americans worried about foreign election interference | DHS confirms request to tap protester phones House approves measure condemning QAnon, but 17 Republicans vote against it MORE (R-Texas), the chairman of the RSC, told reporters before the Columbus Day recess.  

Flores said the RSC’s plan would reflect the House budget passed earlier this year, which sought to balance the budget in less than a decade. 

He said it would be unveiled once lawmakers returned to Washington from the mid-October break.

Conservatives are making their demands in the midst of what they see as a leadership vacuum. 

Lawmakers say Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellGOP political operatives indicted over illegal campaign contribution from Russian national in 2016 McConnell privately urged GOP senators to oppose debt ceiling hike On The Money — Dems dare GOP to vote for shutdown, default MORE (R-Ky.) and Boehner have given them little indication of what the plan is for raising the debt limit or reaching a year-end budget deal. 

“Nobody else is working on a plan. We’ve got to lead and the RSC is leading in this area,” Flores said. 

Moderate Republicans facing tough re-elections, however, are leery about playing hardball with the debt limit, knowing they could be playing with fire.

Even though Congress struck a deal to raise it in 2011 shortly before the deadline, the brinksmanship spurred Standard & Poor’s to lower the nation’s credit rating, which caused the stock market to plummet. 

Before the Columbus Day recess, Sen. Mark KirkMark Steven KirkDuckworth announces reelection bid Brave new world: Why we need a Senate Human Rights Commission  Senate majority battle snags Biden Cabinet hopefuls MORE (R-Ill.), an endangered incumbent, predicted Republicans would agree to a “fairly clean [debt-limit increase] to make sure we focus members of Congress on the financial integrity of the country.”