GOP struggles to find backup plan for avoiding debt default

Republicans are in the dark about their party's backup plan for raising the debt ceiling amid growing anxiety that they will need to do so in a matter of weeks.

Leadership wants to attach an increase in the nation’s borrowing limit to a budget deal, which would let them consolidate two tough political votes. But while Congress has until January to avoid deep budget cuts, it appears increasingly likely it will have to vote to raise the debt ceiling before leaving for the August recess.

ADVERTISEMENT

Underscoring the urgency, Treasury Secretary Steven MnuchinSteven Terner MnuchinThe Hill's Morning Report: How will Trump be received at G-7? White House won't move forward with billions in foreign aid cuts Trump says he'll decide on foreign aid cuts within a week MORE sent letters to congressional leadership Friday requesting Congress vote before the recess, after first indicating to reporters that it was his “preference” lawmakers act this month.

Sen. John ThuneJohn Randolph ThuneSchumer blasts 'red flag' gun legislation as 'ineffective cop out' Lawmakers jump-start talks on privacy bill Trump border fight throws curveball into shutdown prospects MORE (R-S.D.), when asked how Congress could raise the debt ceiling without a deal on spending caps to avoid the budget cuts, said it was a “good question.”

“Did he have a suggestion about that?” the No. 2 Senate Republican asked, referring to Mnuchin, who has been sounding the alarm about the need for an expedited vote.

Sen. John CornynJohn CornynThe Hill's Morning Report - Trump hews to NRA on guns and eyes lower taxes The Hill's Morning Report - Trump on defense over economic jitters Democrats keen to take on Cornyn despite formidable challenges MORE (R-Texas), an adviser to Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellDavid Axelrod after Ginsburg cancer treatment: Supreme Court vacancy could 'tear this country apart' Pelosi asks Democrats for 'leverage' on impeachment Democrats press FBI, DHS on response to white supremacist violence MORE (R-Ky.), said it would be “very hard.”

Sen. Shelley Moore CapitoShelley Wellons Moore CapitoAmerica is in desperate need of infrastructure investment: Senate highway bill a step in the right direction On The Money: Economy adds 164K jobs in July | Trump signs two-year budget deal, but border showdown looms | US, EU strike deal on beef exports Trump border fight throws curveball into shutdown prospects MORE (R-W.Va.), a member of leadership and the Senate Appropriations Committee, laughed when asked if she knew what the party’s alternate plan is for the debt ceiling.

“No, I don’t know what the backup plan is,” she said. “I think if we could reach a caps deal then the debt limit would probably go in with it.”

ADVERTISEMENT

Voting on the debt ceiling before the August recess would give lawmakers two weeks to cobble together a strategy. The House is set to leave town on July 26; the Senate is scheduled to be in session through Aug. 2.

Senate Appropriations Committee Chairman Richard ShelbyRichard Craig ShelbyIs this any way for NASA to build a lunar lander? In-space refueling vs heavy lift? NASA and SpaceX choose both Budget deal sparks scramble to prevent shutdown MORE (R-Ala.), asked how to raise the debt ceiling without a budget deal, demurred on the tactics but argued it was imperative that Congress act.

“That would be up to the leadership … but I think raising the debt limit is imperative unless you want to see chaos through the world financial market,” he said.

He predicted that lawmakers wouldn’t make a decision on strategy until the eleventh hour, saying that “urgency makes people active.”

“Generally, the Congress doesn’t do anything … until it’s the deadline or on the brink of either success or disaster,” Shelby added.

Members are hoping they’ll be able to come up with and vote on a larger agreement before the recess to raise the statutory defense and nondefense spending caps, which would allow them to stick with their original plan of wrapping the debt ceiling and eventual budget deal into one vote.

In a potential sign of progress, Mnuchin met with GOP leadership last week and talked to House Speaker Nancy PelosiNancy PelosiPelosi asks Democrats for 'leverage' on impeachment Is there internet life after thirty? Pelosi says Dems 'have to be ready to throw a punch — for the children' in 2020 MORE (D-Calif.) on Tuesday, twice on Thursday and again on Friday and Saturday to try to negotiate a deal. They're expected to continue speaking Monday. 

But politics is also at play.

Separating the debt ceiling from the budget negotiations could, the administration hopes, give Democrats less leverage in their demand for higher nondefense spending, which has emerged as a sticking point for Republicans.

Divorcing the two issues would give lawmakers the following options: They could either hold a stand-alone vote on the nation’s borrowing limit or quickly find another bill to attach it to that would get to President TrumpDonald John TrumpDavid Axelrod after Ginsburg cancer treatment: Supreme Court vacancy could 'tear this country apart' EU says it will 'respond in kind' if US slaps tariffs on France Ginsburg again leaves Supreme Court with an uncertain future MORE’s desk before the August recess.

Thune said if lawmakers have to vote on the debt ceiling before leaving at the end of the month “the question then becomes how. What’s the mechanism and what’s the process, and is there something it can ride on?”

“We’ll see,” he said when asked if there was other legislation moving that the debt limit could be attached to. “There are potential vehicles out there. It depends entirely on what comes together legislatively.”

But as legislation has slowed to a crawl in an era of divided government, there are few obvious bills moving that are expected to pass both chambers by the end of the month.

The House and Senate are set to go to conference on a mammoth defense bill. Meanwhile, the Senate will take up the House-passed 9/11 Victims Compensation Fund, and both chambers are working on health care legislation.

Asked how Congress could raise the debt ceiling, Sen. David Perdue (R-Ga.), a Trump ally, said, “That’s a great question. We have eight working days left.”

“It depends on what else they put in it. Frankly, I would rather have a clean one because it means the riders aren’t in there,” he said.

Sen. Mike RoundsMarion (Mike) Michael RoundsThe Hill's Morning Report - Progressives, centrists clash in lively Democratic debate Senate braces for brawl over Trump's spy chief Overnight Defense: Esper sworn in as Pentagon chief | Confirmed in 90-8 vote | Takes helm as Trump juggles foreign policy challenges | Senators meet with woman accusing defense nominee of sexual assault MORE (R-S.D.), who caveated that he was unclear on a backup plan, said he wouldn’t be opposed to having a stand-alone debt ceiling vote.

“I think some people would feel more comfortable having them attached,” he said, referring to a budget deal and the debt ceiling. “But look ... we’ve spent the money. This is kind of like a family who has a credit card and then says, ‘I’m not going to pay the bill.’”

But holding a stand-alone vote on the debt ceiling would likely force Senate Republicans to rely on Democratic votes for passage. With a 53-47 majority, the Senate would need at least 50 votes, or 60 if Democrats tried to filibuster, to pass a stand-alone debt ceiling hike. That means Republicans could lose three from their party and still have Vice President Pence break a tie.

Two years ago, 17 Senate Republicans voted against legislation to fund the government and raise the debt ceiling. In 2015, there were 35 Republicans who opposed legislation that included a two-year budget deal and suspension of the debt ceiling to prevent a government shutdown. A year before that, all 43 GOP senators who voted did so in opposition to increasing the debt limit, though a dozen initially helped defeat a filibuster.

Cornyn, when asked if Republicans could get a simple majority for a debt ceiling increase, said he hadn’t “whipped” the vote to measure support but added, “I think it would be hard.”

Capito said a stand-alone debt ceiling increase would be “a troubling vote for a lot of people.”

There are “some people that have never voted for it, you know, that never voted to raise it,” she said. “If you have a primary I think you would be worried about that.”