Better-than-even odds say the Great Debt Limit Debate of 2014 will be over before it really gets started, maybe by the end of this week.
House Republicans will decamp from the Capitol on Wednesday, hours after sitting on their hands through most of the State of the Union address, and will reconvene 85 miles away at a sleek golf resort on Maryland’s Eastern Shore. By the time their annual policy retreat ends two afternoons later, their leaders expect to have an answer to one of the most vexing questions they’re confronting this election year: How hard does the rank and file want to resist the next increase in federal borrowing?
The congressional calendar, combined with the vagaries of the government’s balance sheet, argue strongly against procrastinating. And this time, taking a relatively easy way out of the impending jam looks to be the way the House GOP will go. They are likely to signal that retreat at the end of their retreat.
The leaders have a few fig leaf feints in mind — one involves the Keystone XL pipeline, the other congressional pay — and it’s likely they’ll settle on a plan that allows their team at least one burst of bellicosity and a couple of hostage-taking roll calls.
But the post-shutdown Republicans do not really have the stomach for another sustained confrontation that could rattle the markets. Nor do they have the sort of tactical myopia that will lead them for very long down a course that threatens to squander their current midterm election advantage. They know their only viable option is to extend the Treasury’s borrowing authority, with no policy strings that would raise President Barack Obama’s hackles, until after the midterm elections.
And so it’s possible that the required legislation will be cleared even before Valentine’s Day. That would prevent constituent or Wall Street anxieties from welling up during the Presidents Day congressional recess. Voters can also be counted on to have minimal patience for debt limit countdown clocks competing for coverage with the Winter Olympics, another argument against waiting until the last week of the month.
The timetable was accelerated last week by Treasury Secretary Jacob J. Lew, who wrote to warn congressional leaders that the government will likely require more borrowing in late February. Although the latest statutory deadline is Feb. 7, Lew said a month ago that bookkeeping maneuvers at his disposal could cover the nation’s bills through early March. Congressional analysts had concluded the government’s cash flow position was good enough to forestall more borrowing until May.
Lew said the change stems from a surge of tax refund checks that need to be cut during the coming month, thanks to the shutdown creating a late start for tax-filing season.
Obama has little incentive to erase the red line he’s drawn against making any policy concessions in return for raising the debt ceiling, which he describes as a congressional obligation to pay bills incurred long ago. Hill Democrats are pressing him to keep his spine stiff and Republican leaders sound like they understand.
“All I know is we should not default on our debt, we shouldn’t even get close to it,” Speaker John A. Boehner said at a news conference two weeks ago.
But after Lew’s letter, Boehner spokesman Michael Steel offered that, while the speaker sticks by that view, “a ‘clean’ debt limit increase simply won’t pass in the House.” Translation: Some face-saving quid pro quo will have to be attached to get the debt bill through with GOP votes — at least the first time. If the Senate sends the bill back after deleting the rider, the pressure would grow on Republicans to acquiesce, in part because by then the default deadline could be getting perilously close.
Some Republicans are talking about soft language aimed at controlling the growth of Medicare and other entitlements, or speeding consideration of a tax code overhaul, on the grounds Obama has been open to collaborating on both fronts.
A bit likelier is language conditioning the debt limit extension to Obama’s approval of Keystone — perhaps with the borrowing increase lasting longer if the oil pipeline out of Canada is not only approved but green-lighted relatively soon. The gamble here would be that Obama is already inclined to give his OK, so he could dismiss the rider as not crimping his authority.
The next step is for State Department analysts to finalize their environmental impact statement, the initial draft of which came down on the side of permitting the project. If Secretary of State John Kerry approves the document, it would then be time for Obama to have the final say. Among the political arguments in favor: The project is being pushed by four of the Senate Democrats in re-election trouble.
The likeliest option is to revive the sweetener that sped enactment of an otherwise clean multi-month debt limit extension last January: Language mandating that House members’ or senators’ salaries be held in escrow if their chamber missed the statutory April 15 deadline for approving the annual budget resolution.
The provision had the effect desired by the GOP House, which was to force the Democratic Senate to take the politically problematic votes necessary to adopt a fiscal blueprint for the first time in four years. So Republicans may be enticed to apply the same pressure tactic again, especially because in recent days Majority Leader Harry Reid, D-Nev., has signaled he’s not eager to repeat the exercise this election year. (His rationale is that the budget resolution’s most elemental purpose, setting a spending total for the coming year, was accomplished for fiscal 2014 with adoption of the Ryan-Murray plan.)
The other big reason this could be the winning formula again: The rider is all about bicameral bickering, so Obama could accept it without breaking his no-negotiating vow.