As House Republicans prepare their opening bid on a debt limit increase, Speaker John A. Boehner’s old standard for raising the debt limit is looking less like a demand and more like a dream.
Republican leaders seem to have shifted their emphasis from the "Boehner rule" — which insists on dollar-for-dollar "cuts or reforms" in return for a debt ceiling increase — to other wish list items, including a one-year delay of Obamacare and approval of the the Keystone XL oil pipeline.
Republicans have set aside the Boehner rule before. In February, they passed a short-term debt ceiling increase tied to an insistence that Senate Democrats finally take up a budget resolution.
This time around, the White House and Senate Democrats dismiss out-of-hand the idea they will negotiate any additional spending cuts — let alone go dollar for dollar.
But aides to the Ohio Republican insist the rule is alive and well.
“While we’re still working on the details, the proposal will comply with the Boehner rule in terms of reducing the deficit,” Boehner spokesman Michael Steel said Tuesday.
What wasn't clear Tuesday was how, exactly, the bill would do that.
One possibility under consideration would have Republicans relying on the promise of a future tax overhaul package rather than actual spending cuts or revisions in the debt limit bill itself.
That would be a markedly different approach from the August 2011 debt ceiling fight, when Boehner insisted on dollar-for-dollar cuts without gimmicks. That insistence led to President Barack Obama signing the Budget Control Act, pairing more than $2 trillion in spending cuts dollar for dollar with the increase in the debt limit.
Leaders now seem to be considering including tax overhaul provisions via nonbinding motions to instruct. Under that scenario, a claim of cutting the deficit would rely on an assumption that a future tax package will grow the economy, which is, arguably, dynamic scoring.
“Assuming that tax reform would generate additional tax revenues through economic growth is generally termed ‘dynamic scoring,’” Paul N. Van de Water, a senior fellow at the Center on Budget and Policy Priorities, told CQ Roll Call on Tuesday.
The Congressional Budget Office has calculated in the past that a 0.1 percent increase in gross domestic product generates $315 billion in additional tax revenue, which Republicans say they could claim for deficit reduction.
Of course, dynamic versus static scoring is at the heart of a different, even wonkier debate, but if the House GOP’s plan uses motions to instruct, that part of the plan wouldn’t even receive a formal score from the Congressional Budget Office.
A senior leadership aide intimately involved with past deficit plans noted that “economic growth through tax reform has been a substantial part of every bipartisan deficit reduction plan or discussion in the past several years.” The aide noted that a tax rewrite was part of the discussion with the original grand bargain, the supercommittee, the "gang of six" and Simpson-Bowles.
While Republicans may be able to allay some conservative concerns by laying out a path to deficit reduction, hardliners may want deeper spending cuts upfront.
Still, the assorted other wish list items — especially the Obamacare delay — should attract many Republicans who otherwise would be disinclined to vote for any debt limit hike.
But this first bill is one the president would never sign — and Republicans seem to know that.
“This is the best strategy to get the ball rolling and move the Senate off the position that they won't negotiate at all,” a senior GOP aide told CQ Roll Call on Tuesday.
On Monday, Senate Budget Chairwoman Patty Murray, D-Wash., and Finance Chairman Max Baucus, D-Mont., sent around a “Dear Colleague” letter that said, “President Obama has been clear that he is not going to negotiate over the debt limit, and congressional Democrats stand behind him strongly.”
Obama has been adamant that he will not haggle over the debt ceiling, and he reiterated that position to Boehner in a phone call on Sept. 20.
“It was a brief call,” Boehner’s office reported.
Meanwhile, Congress continues to debate the continuing resolution to keep the government open starting Oct. 1. The Senate is expected to pass its bill keeping the health care law intact and send it back to the House. And that’s when the real decisions start. Will the House ping-pong a bill back to the Senate with a smaller ask? Can they cobble together the votes for a clean CR? To some extent, the debt ceiling fight just around the corner could make it easier to find the votes on the stopgap bill.
Moody's Investors Service predicted Tuesday that Congress will avert a government shutdown and extend its borrowing authority, but it said while failure to raise the debt limit would be more damaging to financial markets, failure to accomplish either would have more-than-adverse effects.