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Debt Limit Move Provides Budget Deal Opportunity

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The short-term debt limit suspension detailed Monday by House Republicans appears likely to delay one fiscal confrontation, but opinions are divided on whether it could lay the groundwork for something much bigger.

The legislation expected to reach the House floor Wednesday would suspend the limit on government’s borrowing through May 18, then automatically increase the current $16.4 trillion ceiling to accommodate additional debt accumulated by that date.

The measure would delay further action on the debt limit until after Congress and President Barack Obama deal with automatic spending cuts now scheduled to begin March 1 and the March 27 expiration of the current stopgap spending law (PL 112-175).

What else the measure could lead to remains open to debate. Republicans intend for it to provide an incentive for adoption of a fiscal 2014 budget resolution. And if bipartisan agreement could be reached on a budget blueprint, that could provide a fast track for legislation implementing any fiscal agreement that the White House and lawmakers are able to negotiate.

The Republican-controlled House and Democrat-controlled Senate have been unable to agree on a budget resolution in recent years, and House Republicans contend the fault lies in the Senate. The House GOP bill made public just as Obama’s second inauguration ceremony was getting under way would suspend the salaries of members of the House or the Senate if either chamber does not adopt a budget resolution by the April 15 deadline set by the 1974 budget process law (PL 93-344). However, House and Senate agreement on a final budget resolution would not be required to keep congressional paychecks flowing.

There is some thought that restoring regular order in the congressional budget process could represent the first step toward a historic deficit reduction agreement addressing both taxes and spending. That is largely because adoption of a budget resolution would make it possible for lawmakers to use the reconciliation process.

Under reconciliation, lawmakers could instruct House and Senate committees to write legislation that would reduce the deficit by specified amounts. The committees’ proposals would be packaged for floor action with protection from a Senate filibuster.

At this point, such a scenario remains a long shot. The House and Senate have been unable to overcome partisan differences and strike budget deals. It’s unclear whether the threat of withheld salaries will be enough to nudge them toward an agreement.

The lawmaker who will write the House’s budget resolution, Budget Chairman Paul D. Ryan, R-Wis., said the House will adopt a budget plan with reconciliation instructions for tax code changes. But he offered no prediction of whether the House and Senate will be able to agree on a budget resolution or fast-track instructions.

William Hoagland, a former Republican Senate budget aide who is now a senior vice president at the Bipartisan Policy Center, said the reconciliation process offers a glimmer of hope that Congress can achieve the big deficit reduction deal it’s been looking for. “Anything we would do to get back to regular order, as difficult as that is, would be one of the shining lights that would come out of this otherwise miserable situation,” he said.

Former Speaker Newt Gingrich, R-Ga., was optimistic that the short-term debt limit suspension will lead to a deal similar to agreements a divided Congress made with President Ronald Reagan in 1986.

Others, however, held out little hope the two chambers will strike a budget deal.

“It’s going to be enormously difficult to resolve differences if the House and Senate each pass a budget,” said former House Budget Chairman Bill Frenzel, R-Minn., now a Brookings Institution scholar. “They are going to be nowhere near alike.”

A major deficit-cutting deal through the reconciliation process is “not gonna happen,” said Stan Collender, a former Democratic aide to the House and Senate Budget committees. “It’s nice to think that, but before you can do that, you have to come to an agreement between the House and Senate.”

Senate Majority Leader Harry Reid, D-Nev., and Senate Budget Chairwoman Patty Murray, D-Wash., have not announced a budget strategy. But Charles E. Schumer of New York, the third-ranking Senate Democrat, said Sunday he is sure the Senate will try to adopt a budget resolution incorporating plans for a tax overhaul that would reduce the deficit.

House Passage Expected

The House Rules Committee plans to mark up a rule for the debt limit suspension Tuesday, and the measure is expected to be on the floor Wednesday.

Rep. Fred Upton, R-Mich., said prospects are good for House passage. “I think just about all Republicans will vote for it,” he said.

Other conservatives reacted a little more cautiously, saying they will insist on spending cuts, either to raise the debt ceiling or through the budget process. “The best way is to go through the budget process and have a 10-year plan that’s smart, that’s reasonable, that tightens the belts throughout the whole government,” said Sen. Jeff Sessions of Alabama, the top Republican on the Senate Budget Committee.

Although Democrats in both chambers are expected to accept the GOP offer of a debt limit suspension, they were wary Monday of sounding too optimistic. “What it says is that the Republicans have decided not to tie the debt ceiling to one-for-one [spending] cuts,” said Rep. Sander M. Levin of Michigan, the top Democrat on the Ways and Means Committee. “That’s a hopeful sign but the work lies ahead.”

Since the 27th Amendment forbids Congress from altering its own pay until an intervening election has passed, lawmakers will have to be paid their $174,000 salaries eventually, budget resolution or no budget resolution. The GOP provides for them to be paid at the end of the 113th Congress on Jan. 3, 2015, should their regular pay be delayed.

Matt Fuller and Niels Lesniewski contributed to this report.

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