Congressional Republicans have announced that they will agree to increase the debt ceiling, but it comes with some strings attached:
WASHINGTON — Backing down from their hard-line stance, House Republicans said Friday that they would agree to lift the federal government’s statutory borrowing limit for three months, with a requirement that both chambers of Congress pass a budget in that time to clear the way for negotiations on long-term deficit reduction.
The agreement, reached in closed-door negotiations at a party retreat in Williamsburg, Va., was a tactical retreat for House Republicans, who were increasingly isolated in their refusal to lift the debt ceiling. Speaker John A. Boehner of Ohio had previously said he would raise it only if paired with immediate spending cuts of equivalent value.
The decision by Republicans seemed to significantly reduce the threat of a federal government default in coming weeks and was welcomed by Senate Democrats. The House will consider the plan next week.
“It is reassuring to see Republicans beginning to back off their threat to hold our economy hostage,” said Adam Jentleson, a spokesman for Senator Harry Reid of Nevada, the majority leader. “If the House can pass a clean debt ceiling increase to avoid default and allow the United States to meet its existing obligations, we will be happy to consider it. As President Obama has said, this issue is too important to middle-class families’ economic security to use as a ploy for collecting a ransom. We have an obligation to pay the bills we have already incurred — bills for which many House Republicans voted.”
The Republicans’ new tack is designed to start a more orderly negotiation with Mr. Obama and Senate Democrats on bipartisan ways to shrink the government’s trillion-dollar deficit. To add muscle to their efforts to bring Senate Democrats to the table, House Republicans will include a provision in the debt ceiling legislation that says lawmakers will not be paid if they do not pass a budget blueprint.
“The Democratic-controlled Senate has failed to pass a budget for four years. That is a shameful run that needs to end, this year,” Mr. Boehner said in a statement from Williamsburg. “We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government’s spending problem.”
The decision represents a victory — at least for now — for Mr. Obama, who has said for months that he will not negotiate budget cuts under the threat of a debt default. By punting that threat into the spring, budget negotiations instead will center on two other points of leverage: March 1, when $1 trillion in across-the-board military and domestic cuts are set to begin, and March 27, when a stopgap law financing the government will expire.
Mr. Obama will unveil his own 10-year budget plan in February, laying out his tax and spending plans for his second term. But Senate Democrats, for the past four years, have refused to move a budget blueprint to the Senate floor, in violation of the 1974 budget act that laid out new rules for controlling federal deficits.
House Republicans, for the past two years, have approved sweeping budget plans that would fundamentally remake Medicare and Medicaid, sharply reduce domestic spending, increase defense spending and order a wholesale rewriting of the federal tax code. But without Senate negotiating partners, those plans, written by Representative Paul D. Ryan of Wisconsin, the Republicans’ last vice-presidential nominee, have been more political statement than legislative program.
House Republican leadership aides said Friday that by trying to force Senate Democrats’ hands, Mr. Boehner hoped to move budget talks from ad hoc negotiations between Congressional leaders and the White House to a more orderly process.
“This is the first step to get on the right track, reduce our deficit and get focused on creating better living conditions for our families and children. It’s time to come together and get to work,” said Representative Eric Cantor of Virginia, the House majority leader.
Politically, this is a fairly smart move for the GOP, and that’s not something I’ve said very often when it comes to the way they handle these fiscal standoffs with the Senate and the White House. As I’ve noted before, they were in a no-win situation on a pure debt ceiling vote. The President had made clear that he wasn’t going to negotiate, and nobody outside of the extremes of the Tea Party actually believed that Republicans would let the country get to the point where we actually went over the “debt ceiling cliff.” Indeed, as this week went on, more and more Republican leaders in Congress were stepping forward and pretty much admitting that the party was not going to allow that to happen, and that they instead preferred their budget battle to be focused on the Sequestration cuts and the expiration of the Fiscal Year 2013 Continuing Resolution coming up in 2013.
Will it work? That remains to be seen. Now that the GOP has essentially surrendered on the fundamental idea of raising the debt ceiling, the Obama Administration may feel like it’s in a position to push for further concessions. That may seem like a good idea at first glance, but as we head into the budget battles in March, it’s the House that holds the purse strings and the GOP is going to be in a far better bargaining position.
