Rubio’s Demands Show Tea Party May Not Bend on Raising U.S. Debt Limit

Few demand as much for a vote to raise the U.S. debt limit as Tea Party favorite Marco Rubio.

The first-term Florida senator, an upstart in the Republican Party, said this week he won’t vote to raise the $14.3-trillion debt ceiling unless Congress agrees to his proposals to fix almost every major budget issue. The U.S. will breach the limit by the end of May, according to Treasury, and could default if Congress fails to authorize an increase.

The price of his vote, Rubio wrote in a Wall Street Journal opinion article, is a plan to save Medicare and Social Security from insolvency, overhaul the tax code, revamp the way the government issues regulations, cut discretionary spending, add a balanced-budget amendment to the Constitution and an agreement to no further increases in the debt ceiling.

Even deficit hawks call those demands unrealistic.

“Let’s face it: we’re not going to do all that by June,” said Bob Bixby, head of the Concord Coalition, a Washington- based group that promotes balanced budgets. “People need to be more realistic about this debt-limit debate.”

Rubio is one of many lawmakers, including scores of Tea Party-backed freshmen in the House, demanding major changes in tax and spending policy in exchange for raising the debt limit.

Votes to raise the cap on government borrowing are among the least popular ones lawmakers must cast because they become easy fodder for advertising by campaign opponents.

Yet Rubio’s demands may be well beyond the reach of a Congress that has spent months debating a bill cutting non- defense domestic discretionary spending that accounts for just 12 percent of the federal budget. Lawmakers haven’t addressed a tax overhaul in a generation.

Filibuster Threat

Democrats, who control the 100-seat Senate with 53 votes, probably won’t need Rubio’s support to raise the debt ceiling, though Senator Jim DeMint, a South Carolina Republican, is threatening a filibuster of any measure unless lawmakers accept a balanced-budget amendment.

That could give Republicans leverage to demand big changes, though it would force at least seven to eventually vote for a debt increase, with 60 votes needed to act. Many of those most likely to side with Democrats, such as Indiana’s Richard Lugar, face primary challenges in next year’s elections.

Any increase will face tougher challenges in the House, where Tea Party freshmen have their own lists of demands. Representative Allen West, a Florida Republican, wants the corporate tax rate halved, total government spending capped and a ban on funding for the administration’s health-care overhaul.

‘Fiscally Irresponsible’

“Those are the conditions,” West said. “I’m not going to sit around and prove myself to be fiscally irresponsible.”

A fellow freshman representative, Rich Nugent, also from Florida, said, “I don’t see myself voting for the debt limit” without “huge” concessions from the administration.

It’s traditionally been up to each chamber’s majority party to produce the votes needed to raise the debt limit, Bixby said. “The minority can always take advantage of not being in power to make rhetoric points,” he said.

Budget experts agree lawmakers will have to address the issues raised by Rubio, even if they are unlikely to settle them by June. Medicare and Social Security are projected to consume a steadily increasing share of the government’s resources as the Baby Boom generation nears retirement and health-care costs continue to spiral.

Debt Commission

The numbers are so enormous that even deficit hawks say it will be decades before the government is able to balance its books. A proposal last year by the heads of President Barack Obama’s debt commission to cut the budget by $4 trillion wouldn’t erase the deficit for more than 25 years.

Even so, Rubio says lawmakers ought to tackle the issue with the debt-limit vote.

“This may be our last chance to force Washington to tackle the central economic issues of our time,” Rubio wrote. “There is still time to accomplish all this.”

With that debt-ceiling vote approaching, Alex Burgos, a Rubio spokesman, said there is time to debate his demands.

“He believes it’s possible if people in Washington get serious about these issues, focus on them with the sense of urgency they deserve and abandon the politics-first mindset that has brought us to this point of a record $14 trillion debt,” Burgos said.

Market Turmoil

The stakes in the debt-limit debate are higher and the politics tougher than in the current dispute over funding levels for the remainder of the government’s fiscal year. While the government has been shut down in the past, lawmakers have never allowed the government to hit the debt limit, which could rattle financial markets around the world.

Meeting the Republicans’ demands could also cause market turmoil. Experts such as Congressional Budget Office Director Doug Elmendorf have said a balanced-budget amendment to the Constitution would worsen economic recessions because it would prevent automatic increases in federal spending on unemployment benefits, Medicaid and other government programs during downturns that help support consumer spending.

Still, a number of Republicans downplay the significance of hitting the debt limit, saying the government could pay off its creditors with tax revenue, which would still leave enough money for many though not all government functions.

“There’s no reason to default on the debt just because we didn’t raise the debt limit,” said Representative Mick Mulvaney, a freshman Republican from South Carolina. “I do think the folks who say we will automatically default if we don’t raise the debt ceiling are wrong. That is an exaggeration.”

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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