Politico: GOP clash looms over raising the debt ceiling

Republican congressional leaders are quietly preparing to pass a “clean” debt ceiling increase, according to multiple senior GOP sources — setting the stage for a high-risk showdown with rank-and-file Republicans this fall.

Trump administration officials, led by Treasury Secretary Steven Mnuchin, are imploring Congress to raise the $19.8 trillion debt limit with no strings attached by the end of September. And Senate Majority Leader Mitch McConnell and Speaker Paul Ryan — well aware they need Democrats to pass any debt bill through the Senate — are on board, albeit begrudgingly so.

But beyond the leadership, there are few Republican takers, at least so far. GOP lawmakers in both chambers of Congress are calling for any debt ceiling hike to be accompanied by spending cuts or fiscal reforms — the same demand they made repeatedly during Barack Obama’s two terms.

That means McConnell (R-Ky.) and Ryan (R-Wis.) will have to rely on Democrats and enough moderate Republicans to help them avert a financial catastrophe by Sept. 29, the day Treasury exhausts its borrowing authority and the very last day for Congress to act.

“We shouldn’t even play with that. It should just be ‘clean,’” said Senate Finance Committee Chairman Orrin Hatch (R-Utah), who supports McConnell’s strategy. “Some conservatives think they can get some programs cut. Well, that’s not gonna happen … We have to pay our bills and anybody who doesn’t want to do that doesn’t deserve to be here.”

Compare that with Sen. James Lankford’s take: The Oklahoma Republican flatly responded “no” when asked whether GOP leaders should move a so-called clean debt limit increase.

“You should never have a time that we deal with the debt ceiling that we’re not dealing with the reason that we have debt ceilings,” Lankford said. “And that’s the debt and deficit. So they should always be combined in some way.”

Meanwhile, Democrats, who time and again have coughed up votes to allow the GOP to avoid crises, are mulling their own demands with a Republican now in the White House. Some Senate Democrats have floated seeking a reauthorization of health insurance programs for low-income children in return for their support. And House Democrats likewise are considering a play to leverage their own priorities.

The upshot: Congress will return next month from August recess with no clear road map for avoiding the first-ever default on the nation’s debt.

McConnell is already privately raising the issue with fellow GOP senators, according to one senior GOP aide. Top Republicans are eager to avoid a repeat of the 2011 standoff between Congress and the Obama White House that led to a downgrade of the nation’s sterling credit rating.

Spokesmen for the majority leader declined to comment on McConnell’s debt limit strategy. But some other senior Republicans are backing up McConnell, warning lawmakers of the consequences of tangling over the nation’s debt limit, particularly with the party controlling all levers of power in Washington.

“We’re going to need to raise the debt limit,” Senate Majority Whip John Cornyn (R-Texas) said. “We’re talking about different options.”

One option being considered is to roll a debt ceiling increase into a spending bill that must pass by Sept. 30 to avoid a federal government shutdown. Moderate Republicans in the House, including Rep. Charlie Dent of Pennsylvania, a leader of the Tuesday Group, have been imploring House leaders to champion such a package as well.

Some Hill Republicans have suggested that rolling a debt increase in with a bipartisan budget deal would not be “clean” per se. But others do view such a strategy as a “clean” increase, since it would not include dollar-for-dollar offsets or partisan policy riders pushed by either side.

Complicating the task is the fact that Trump administration officials have sent conflicting signals about how they want the debt ceiling to be handled.

Though Mnuchin has been the dominant voice of the administration on this issue, Office of Management and Budget Director Mick Mulvaney earlier this year insisted that spending cuts or other reforms should be part of any debt hike, even as he’s indicated Treasury is taking the lead.

Mulvaney took a hard line on the debt ceiling as a member of the House before his elevation to the Cabinet. And his view has plenty of support in Congress.

“If there’s ever a good example of kicking the can down the road, it is continually raising the debt ceiling and not dealing with the cause of the debt,” said Sen. Steve Daines (R-Mont.). “So it concerns me greatly that it’ll just be another punt if we don’t do anything, at least some structural reform.”

In the House, Ryan and his leadership team are waiting for the Senate to act first. While they have not publicly endorsed a “clean” debt ceiling approach, House GOP leaders are preparing to push whatever the Senate passes and clear it for President Donald Trump’s signature.

They know that it’s likely to be a straight debt ceiling hike. And some in House leadership are dreading the fight it will spark with the right flank of their conference.

They know they’ll have to rely heavily on House Minority Leader Nancy Pelosi (D-Calif.) for votes to pass any deal. All but perhaps a couple dozen moderate-minded House Republicans, leadership sources predict, will vote against a bill raising the nation’s borrowing limit without equivalent spending cuts — so Ryan will need every Democrat Pelosi can get.

Democrats don’t want to risk defaulting on the debt. But they’re also concerned that after offering up their votes to Republicans to clear the debt ceiling hurdle, Republicans will promptly turn around in October and pass tax cuts that could balloon the deficit and disproportionately benefit the wealthy.

So Democrats are waiting for Republicans to reveal their strategy before going public with their own demands.

“You know what? They are in charge. They have a majority in the House and in the Senate and the White House and so they have to make the decisions governing,” said Sen. Debbie Stabenow of Michigan, the fourth-ranking Senate Democrat. “We’ll work with them but they’re gonna have to step up.”

The likelihood that House leaders will have to lean on Democrats could undermine Ryan’s political standing. Conservatives drove out ex-Speaker John Boehner (R-Ohio) because he sometimes violated a GOP tradition known as the Hastert Rule, which dictates that a “majority of the majority” must support legislation.

Ryan, for the first time, will probably have to break that unofficial agreement. Most of his 240-member conference is expected to oppose a clean debt ceiling bill.

Conservatives in the House Freedom Caucus have made demands to support a debt increase, including steep cuts to mandatory programs. But GOP leaders under their current strategy will, in essence, ignore conservatives because they can’t give them what they want and expect it to clear the Senate’s higher, 60-vote threshold.

During an Americans for Prosperity speech Wednesday, Freedom Caucus Chairman Mark Meadows seemed to acknowledge that conservatives would get squeezed. While the North Carolina Republican prefers spending cuts, he said a “clean” increase was also a possibility — and he assured the audience that he wanted no part of the government defaulting on its debts.

“I think that we ought to attach something to it,” he said, later adding: “Either that will get done or a clean debt ceiling will get done. We will raise the debt ceiling and there shouldn’t be any fear of that.”

The headache for Ryan on the debt ceiling, however, won’t just be from the Freedom Caucus. Even some Ryan allies have said privately they would never back a clean debt ceiling increase. Many of them campaigned promising to lower, not increase, the debt.

House GOP leaders, however, could receive cover from the White House. And centrist Republicans will also likely go along.

Still, the call for cuts from the base won’t be easy to resist for some.

“I wish we could tie things to it,” said Sen. Richard Shelby (R-Ala.). “But can we? I don’t know.”