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.

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Underscoring the urgency, Treasury Secretary Steven MnuchinSteven Terner MnuchinHillicon Valley: Agencies play catch-up over TikTok security concerns | Senate Dems seek sanctions on Russia over new election meddling | Pentagon unveils AI principles Senate Democrats urge Trump administration to impose sanctions on Russia for election interference Overnight Energy: Fight over pipeline that would cross Appalachian Trail hits Supreme Court | Security experts warn of 'catastrophic' climate threats | G-20 statement talks climate despite US reluctance 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 ThuneGOP casts Sanders as 2020 boogeyman McConnell tees up votes on two abortion bills Senate votes to rein in Trump's power to attack Iran 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 CornynGOP casts Sanders as 2020 boogeyman Ocasio-Cortez announces slate of all-female congressional endorsements Trump Medicaid proposal sparks bipartisan warnings MORE (R-Texas), an adviser to Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellSchumer on Trump intel shakeup: 'Disgrace,' 'closer to a banana republic' Bottom Line The Hill's 12:30 Report: Sanders's momentum puts Democrats on edge MORE (R-Ky.), said it would be “very hard.”

Sen. Shelley Moore CapitoShelley Wellons Moore CapitoTrump hammers Manchin over impeachment vote Senate drama surrounding Trump trial starts to fizzle Democrat Richard Ojeda announces Senate bid after dropping out of presidential race 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.”

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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 ShelbyOvernight Health Care — Presented by American Health Care Association — White House to request emergency coronavirus funds | Trump backs off plan to house virus patients in Alabama | Court sides with Trump in family planning case Trump backs off plan to house coronavirus patients in Alabama after GOP objections On The Money: Republicans expect Trump to pull controversial Fed nominee | Inside Judy Shelton's confirmation hearing | Trump extends emergency declaration at border 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 PelosiBottom Line Immigrants who seek opportunity should comply with longstanding American values Trump's intel moves spark Democratic fury 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 TrumpTrump suggests Sotomayor, Ginsburg should have to recuse themselves on 'Trump related' cases Sanders says idea he can't work with Republicans is 'total nonsense' Sanders releases list of how to pay for his proposals 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 RoundsOvernight Defense: Pentagon policy chief resigns at Trump's request | Trump wishes official 'well in his future endeavors' | Armed Services chair warns against Africa drawdown after trip GOP chairman after Africa trip: US military drawdown would have 'real and lasting negative consequences' Trump pick for Fed seat takes bipartisan fire 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.”