Weeks before Republican Senator Olympia Snowe of Maine will face a vote on raising the U.S. debt limit, she’s ready with a pre-emptive defense of her record on the subject.
The issue has come up 47 times since she arrived in Congress in 1979, Snowe recites, without missing a beat, when asked about her checkered history of voting for and against such measures -- 22 times as a stand-alone, or “clean” vote, and 25 times attached to some other legislation.
“I voted seven times against debt-ceiling increase under a Democratic president, just in the last 18 years, and five times against it during a Republican administration -- just to give you a window,” Snowe, who is facing re-election next year, said on May 12. “I’ve looked at it. I went back.”
Snowe isn’t alone in Washington. With a vote looming sometime in the next few months on raising the nation’s $14.3 trillion debt limit, lawmakers in both parties are poring over their voting records and parsing their arguments, puzzling over what position to take on a vote that is never pleasant.
When it comes to the debt limit, virtually every member of the U.S. Congress is a flip-flopper. That includes President Barack Obama, who as a senator from Illinois in 2006 voted against raising the limit, a move he now calls “a mistake.”
“Nobody likes to be tagged as having increased the debt limit,” Obama said last month.
Republicans routinely oppose the move when a Democrat is in the White House, and Democrats regularly say “no” when a Republican is president.
Yet in an era of divided government -- with Democrats controlling the White House and the Senate while Republicans dominate the House -- the two parties must find a way to compromise. Treasury Secretary Timothy Geithner said May 13 his department is already using “extraordinary measures” to avoid hitting the debt limit. Geithner has said he will run out of options for avoiding a U.S. default on its obligations by about Aug. 2.
That gives Congress several weeks to negotiate a deficit- reduction deal to pave the way for a vote to raise the limit. Vice President Joe Biden is holding private talks with senior Republicans and Democrats.
“The way it had always worked in the past was that the incumbent party had the obligation to renew the debt ceiling,” Senator Chuck Schumer of New York, the third-ranking Democrat, said at the Bloomberg Breakfast in Washington on May 11. “And the question now is, you have divided government, so both parties have an obligation.”
Rarely in Doubt
In the past, votes to increase the debt ceiling were mostly routine and their outcomes rarely in doubt. This year, with the nation’s debt soaring and the economy in the midst of a fragile economic recovery with joblessness still high, Obama and his administration say a failure to raise the borrowing limit would be devastating.
In a May 13 letter, Geithner said a failure to increase the debt limit would “force the United States to default on its obligations” and sketched out dire consequences, from a sharp drop in U.S. household wealth to the potential for another financial crisis that could threaten the global economy as well as millions of American jobs.
“This would be an unprecedented event in American history,” Geithner wrote in response to an inquiry by Democratic Senator Michael Bennet of Colorado. “A default would inflict catastrophic, far-reaching damage on our nation’s economy, significantly reducing growth, and increasing unemployment.”
Bond Market’s View
Concern about the debt-ceiling vote has not been reflected in bond trading.
U.S. 10-year note yields touched the lowest since December on May 13 on speculation that inflation may have peaked after the Labor Department reported the consumer price index rose 0.4 percent in April, matching economists’ forecast. The U.S. sold $72 billion in notes and bonds last week and will auction $11 billion in Treasury Inflation Protected Securities this week.
Most Republicans and a few Democrats have said they won’t vote to boost the nation’s borrowing limit without action to rein in deficits and reduce long-term debt. House Speaker John Boehner, an Ohio Republican, said the boost must be coupled with spending cuts that outweigh the borrowing increase.
“Probably the worst message we could send is if it was clean and we hadn’t accomplished anything on debt,” Snowe said.
There are lawmakers on both extremes. A letter from 114 House Democrats to their leaders demanded the debt-limit vote be “clean.” On the other side, a number of House and Senate Republicans say there’s no need to raise the limit at all.
Senator Rand Paul of Kentucky, a Republican supported by Tea Party activists, said Obama should “tell the country we will not default” even if the limit isn’t raised. “Look, they can’t be trusted with your money up here,” he said May 12 on Fox Business Network. “They can’t account for what you’ve given them, so by no means give them any more money.”
The real action is occurring in the middle, where many Republicans and Democrats regard a debt-limit increase as necessary though unpleasant.
Senator Claire McCaskill of Missouri, a Democrat up for re-election next year, said she regrets her 2007 vote against raising the debt ceiling from $9 trillion to $9.8 trillion.
‘Probably a Mistake’
“It was probably a mistake when I did that, but I was trying to send a message to my caucus that I wanted us to start paying closer attention to the spending,” McCaskill said. “It’s probably a vote that you shouldn’t message with.”
Even when your party holds the presidency, backing a boost in the debt ceiling is “a challenge,” said Republican Representative Tom Cole of Oklahoma. “But if you’re comfortable with what the spending’s been for, I think that makes it easier.”
Cole backed raising the limit during former President George W. Bush’s tenure in part, he said, because he supported the wars and tax cuts that were running up the deficit.
“One of the challenges here from the Republican side is most of this recent spending we didn’t vote for,” including the 2009 economic stimulus measure, the health-care overhaul and most of the appropriations bills since Obama took office, Cole said. “It’s a free vote when you’re in the minority.”
There has been a statutory limit on the national debt since 1917, when Congress passed the Second Liberty Bond Act to finance World War I, according to a report by the Congressional Research Service. Congress has voted to raise the ceiling 10 times since 2001, the report said.
Some lawmakers say their view on the debt limit has evolved with age and experience. Democratic Senator Tom Harkin of Iowa said that in his early years in Congress during Jimmy Carter’s presidency he often opposed raising the borrowing limit because of his concern about the debt.
More recently, the five-termer said, “I began to think, ‘Wait a minute, that’s not a responsible thing to do.’ I got older and I got wiser and began to be a little bit more responsible,” Harkin said. Still, he mostly opposed raising the limit during Bush’s presidency. This year he’ll back the move, Harkin said, though “to this day, it pains me to vote to increase the debt limit.”
‘Easy’ to Demagogue
“It’s an easy issue to demagogue,” said Representative Steve LaTourette, an Ohio Republican. “You can hear the 30-second ad now -- ‘Steve wants us to borrow a trillion more dollars’ -- and so if you don’t have to cast that vote, then why do it?”
LaTourette said he’ll back a debt-limit increase if Boehner’s conditions are met, yet there are many Republicans, particularly freshmen, who won’t.
“We have people that ran on, and since they got here have said, it doesn’t matter how great a package we put together, they’re not voting for it, so this vote count could be a little trickier” than those in the past, LaTourette said.