Mnuchin asks Congress for clean debt hike before August

Mnuchin asks Congress for clean debt hike before August
© Greg Nash


Treasury Secretary Steven Mnuchin on Wednesday asked Congress to pass legislation giving a clean hike to the debt ceiling before the August recess.

“I urge you to raise the debt limit before you leave for the summer. We can all discuss how we cut spending in the future,” he said in testimony before the House Ways and Means Committee.


Mnuchin’s message is the clearest sign yet that the Trump administration does not want to get into a broader fight over reducing government spending as it seeks to raise the nation’s debt limit, possibly to as much as $20 trillion.

When Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyYellen confident of minimum global corporate tax passage in Congress 136 countries agree to deal on global minimum tax Rift widens between business groups and House GOP MORE (R-Texas) asked Mnuchin if he preferred a “clean raise” to the debt ceiling, Mnuchin responded affirmatively.

The conservative House Freedom Caucus immediately pushed back at Mnuchin.

“The U.S. federal government is drowning in debt, yet continues to spend into oblivion on the backs of future taxpayers,” it said. “We have an obligation to the American people to tackle Washington’s out of control spending and put in place measures to get our country on the right fiscal course.

“In order to accomplish this end, the Freedom Caucus has taken a three-fold position: we oppose any clean raising of the debt ceiling, we call for the debt ceiling to be addressed by Congress prior to the August Recess, and we demand that any increase of the debt ceiling be paired with policy that addresses Washington’s unsustainable spending by cutting where necessary, capping where able, and working to balance in the near future.”

Conservative House members have repeatedly sought to tie deep spending cuts to the debt ceiling hike and were often a thorn in the side of former President Barack ObamaBarack Hussein ObamaAbrams targets Black churchgoers during campaign stops for McAuliffe in Virginia Virginia race looms as dark cloud over Biden's agenda  The root of Joe Biden's troubles MORE when he requested debt ceiling hikes.

Obama’s negotiations with Republicans in 2011 led to spending ceilings known as sequestration that Congress is still battling.

The fight led S&P to downgrade the U.S. credit rating that year. One factor S&P included was the political brinksmanship that had left U.S. governance and policymaking “less stable, less effective and less predictable than what we previously believed.”

The politics may have shifted with a Republican in the White House, however.

Now House and Senate Republicans will be negotiating with a GOP president over raising the debt ceiling. Any problems are more likely to be blamed on the GOP, not Democrats.

Conservative groups Heritage Action and Club for Growth have said the debt limit debate should be an opportunity to restrict government spending and will likely pressure conservative lawmakers to toe that line.

Democrats have repeatedly called for clean hikes to the debt ceiling.

“My sense is that there would be bipartisan support for a clean debt ceiling bill,” said Rep. Brian Higgins (D-N.Y.), a Ways and Means member. 

If Republicans try to add provisions to the debt ceiling bill, Democrats are likely to oppose them.

A spokesperson for House Minority Leader Nancy Pelosi (D-Calif.) specified that “the Republican Majority should pass a clean debt limit increase and not risk the full faith and credit of the United States.”

Democrats will have leverage. Legislation raising the debt ceiling would be subject to a filibuster in the Senate, meaning at least eight Democratic votes will be needed.

And in the House, Republicans have struggled to win approval of debt ceiling hikes on GOP-only votes.

This will put pressure on Republicans in both chambers to consider a bipartisan deal to raise the debt ceiling.

The Treasury Department had said that the “extraordinary measures” it has used to ensure the government can pay its bills since March, when the country officially passed the debt limit, will run out this fall.

But Office of Management and Budget Director Mick Mulvaney said Wednesday that the deadline may be coming sooner due to lower-than-expected receipts. 

The debate over the debt ceiling is also likely to introduce a series of new ideas on how to change a process that both parties find politically troublesome.

Rep. Warren Davidson (R-Ohio), a member of the conservative House Freedom Caucus, said he supported fundamentally reforming the debt ceiling to ensure that the full faith and credit of the U.S. government would not regularly be put on the line. 

Davidson suggests changing the law so that payments for all essential services, from paying U.S. bondholders to funding Veterans Administration hospitals and U.S. soldiers, would continue without the need for Congress to raise the debt ceiling.

That would shift the debt ceiling vote into something more like a battle over preventing a government shutdown than one that could lead to a U.S. default.

This story was updated at 6:55 p.m.