Boehner Calling for Debt Talks Lacks Republican Groundswell

Oct. 9 (Bloomberg) -- Phil Mattingly updates the latest news on the U.S. government shutdown on Bloomberg Television's "In The Loop." (Source: Bloomberg)

U.S. House Speaker John Boehner, who has failed to win talks with President Barack Obama, faces another challenge as well: what to say to Obama about the debt ceiling if they ever meet to discuss terms.

House Republicans have yet to stake out a position on the debt limit, owing in part to a group of about 16 of their members who have voted against lifting the ceiling over the past three years.

That group has made it difficult for Boehner to bring up legislation in the House to raise the debt ceiling and stake out a firm bargaining position to take to Obama. House Republicans can lose support from only 15 of their members on a bill with no Democratic votes because the Republicans hold a 232-200 majority.

“Unless we have major reforms for the way our government spends, I am not going to sign some blind check for irresponsible policy,” said Representative Matt Salmon, an Arizona Republican, describing himself as a “hard” vote to get for raising the debt ceiling.

Their positions leave Boehner little bargaining room. If he takes a hard line and doesn’t pass a debt-ceiling increase, the U.S. could default. If he pushes through a measure with some Republican and some Democratic votes, he endangers his speakership and his ability to manage the House heading into the 2014 election.

Photographer: Saul Loeb/AFP via Getty Images

Speaker of the House John Boehner leaves after speaking at the Capitol on October 8, 2013, following a press conference by President Barack Obama. Close

Speaker of the House John Boehner leaves after speaking at the Capitol on October 8,... Read More

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Photographer: Saul Loeb/AFP via Getty Images

Speaker of the House John Boehner leaves after speaking at the Capitol on October 8, 2013, following a press conference by President Barack Obama.

Borrowing Authority

Nine days before U.S. borrowing authority is set to run out, the stark differences between the parties were on display yesterday. Obama took to the podium at the White House to reiterate his demand for a vote on debt ceiling and spending legislation with no add-ons. Boehner hasn’t released a bill as House Republicans dug in on their demands for spending cuts, including a delay in requiring individuals who lack health insurance to purchase it.

Republican Representatives Tim Huelskamp of Kansas and Steve King of Iowa in interviews rejected the Treasury’s contention that the U.S. faces default after Oct. 17, when its borrowing authority is exhausted.

“It is not a hard break on Oct. 17,” King said.

“The only debt payment we have between now and Nov. 15 is a $6 billion payment on Oct. 31 which is not much,” Huelskamp said. “The major one is Nov. 15.”

Huelskamp indicated that any measure to increase the debt-limit that doesn’t balance the budget in 10 years wouldn’t win his support. He said that was the House Republicans’ focus this entire year.

“That is what kept the speaker in his position, and kept the conference together,” he said.

Balanced Budget

Representatives Jim Bridenstine of Oklahoma and Richard Hudson of North Carolina also called for a path to a balanced budget as a prerequisite for their support.

“If we’re just raising the debt ceiling willy-nilly and not solving the problem, then I can’t support that,” Bridenstine said. Hudson wants dollar-for-dollar cuts or significant changes and reductions to entitlement programs.

What Is This Ceiling They're Trying to Raise?

Representative Markwayne Mullin of Oklahoma, while giving no details, ruled out a clean debt-limit bill.

“If you are in debt and you got to get yourself out of that debt then you’d better start making cuts,” Mullin said in an interview. “If we are going to raise it, we got to have cuts.”

‘Winning Tactic’

Michael Needham, the chief executive officer of Heritage Action for America, said his Washington-based political advocacy group, which promotes small government, wouldn’t object to a short-term debt ceiling increase. That move, he said, would keep the focus of the fight on derailing the 2010 health care law as a condition of ending the shutdown.

“The winning tactic right now on Obamacare is to focus on the C.R.,” he said today at a breakfast in Washington sponsored by the Christian Science Monitor, using the abbreviation for continuing resolution, or short-term funding bill.

Representative Tom McClintock of California, who has sponsored a bill that requires Treasury to prioritize payments in the event of default, said he wanted to address the debt limit in “small increments within the trajectory” set by the House budget resolution, which erases the deficit in 10 years. The incremental increases would be paired with “incremental reforms necessary to remain on that trajectory.”

Paying Bills

The U.S. will have about $30 billion in cash after its borrowing authority is exhausted on Oct. 17. The country would be unable to pay all of its bills, including benefits, salaries and interest, sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office.

Obama, at his White House news conference, accused Republicans of “hostage-taking” with their demands, and insisted that future cuts be combined with Democrats’ priorities, such as closing corporate breaks and paying for “better education for kids.”

Boehner has had trouble holding his caucus together since becoming House speaker in January 2011. Uprisings by anti-tax Tea Party lawmakers doomed his effort to reach a budget deal with Obama that year and brought the U.S. to the brink of a possible default before lawmakers agreed to raise the debt limit, coupled with across-the-board budget cuts.

Boehner got his first proposal through the House that year on a 218-210 vote, with 22 Republicans voting against it. On the final bipartisan bill that became law, 66 Republicans voted no. Now, his Republican majority is smaller.

Working Group

Republicans so far haven’t released a blueprint for legislation or a timeline for action. Instead, they plan to vote to appoint a working group of House members and senators to resolve the budgetary disputes.

Republican Representatives Justin Amash of Michigan, Michele Bachmann of Minnesota, Paul Broun of Georgia, Scott DesJarlais of Tennessee, King, Huelskamp and McClintock voted against all three debt-limit proposals in 2011 and 2013.

They are joined by nine freshmen who voted against the measure earlier this year. Those members are Ted Yoho of Florida, Doug Collins of Georgia, Thomas Massie of Kentucky, Steve Stockman of Texas, Hudson, Mullin, Bridenstine and Salmon. Both Stockman and Salmon served in the House before in the mid-1990s.

Adopt Budgets

The 2013 debt-limit increase measure required both chambers of Congress to adopt budgets to avoid having their pay put in escrow.

Boehner repeatedly has said that any major legislation such as the debt-limit increase should attract a majority of Republicans and a majority of Democrats. He’s also insisted that any debt limit increase should be accompanied by commensurate spending cuts or “reforms.”

Among the items on Republicans’ wish lists: lighter regulations, cuts in entitlement programs and approval of TransCanada Corp. (TRP)’s Keystone XL pipeline; means-testing Medicare; reducing the changes to malpractice law and eliminating block grants for social services.

Also being considered is a proposal to eliminate a requirement that gives regulators authority to seize and dismantle financial firms if their failure could damage the stability of the U.S. financial system.

Representative Paul Ryan of Wisconsin, the Republicans’ 2012 vice presidential nominee, has been pressing for a plan that would solve the government spending impasse and raise the debt-limit while implementing economic growth policies and extracting deeper entitlement cuts.

Boehner has called for the Obama administration to allow Ryan, the Budget Committee chairman, and Democrat Patty Murray, his counterpart in the Senate, to negotiate over a broader fiscal package.

To contact the reporters on this story: Roxana Tiron in Washington at rtiron@bloomberg.net; Richard Rubin in Washington at rrubin12@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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