Senate Democrats Plan Debt Ceiling Increase Without Cuts

Senate Democrats could introduce legislation as soon as today that gives President Barack Obama the authority to raise the debt ceiling unless two-thirds of Congress disapproves, according to a Senate Democratic aide.

A test vote on the proposal, described by the aide on condition of anonymity, could occur as soon as Oct. 11, just six days before federal borrowing authority is set to expire.

Democrats have been pressing for a one-year increase in the nation’s $16.7 trillion debt ceiling without any of the spending cuts or policy changes Republicans are demanding. With a government shutdown almost a week old and the partisan impasse that caused it showing no signs of breaking, lawmakers of both parties have turned to the debt ceiling as a possible mechanism for ending the shutdown.

The method of giving Obama the authority to raise the debt ceiling barring a congressional disapproval was first proposed by Senate Minority Leader Mitch McConnell, a Kentucky Republican, in 2011 and became part of the Budget Control Act passed in August of that year.

The Senate Democratic aide said the strategy could make it easier to gain Republican votes because no Republican would have to vote directly for a debt-ceiling increase. Senate Majority Leader Harry Reid, a Nevada Democrat, said last week in an interview that he would move a “clean” debt ceiling increase bill before Oct. 17, when the Treasury expects borrowing authority to lapse.

Delay Possibility

Under Senate rules, opponents of the Democrats’ proposal could delay a final vote until late on Oct. 15, giving the House less than two days to act before borrowing authority lapses.

Obama press secretary Jay Carney said the White House still wants the debt ceiling raised for at least a year to “remove uncertainty” for financial markets while not “ruling out a specific duration.”

“The longer you raise the debt ceiling,” the better it would be, Carney said today.

At several points in the process, Democrats would need to hold their caucus together and find six Republicans to advance the bill. The final vote to give Obama the authority would require a simple majority and thus no Republican votes. Democrats control a 54-46 majority in the Senate.

Political Leverage

Democrats, who agreed to spending cuts as part of the 2011 debt-ceiling negotiations, say they won’t budge this time because they have more leverage, in part because Republican gains in last year’s election fell short of their 2010 performance when they won control of the House.

House Speaker John Boehner, an Ohio Republican, has been trying to package the debt limit with as many party priorities as possible, including TransCanada Corp.’s Keystone XL pipeline, limits on environmental regulations and cuts to entitlement programs.

Representative Paul Ryan, a Wisconsin Republican and his party’s 2012 vice presidential candidate, is pressing for a plan that would resolve the spending impasse and raise the debt limit while extracting entitlement program cuts and making changes to economic policies, according to a leadership aide who asked not to be identified because plans aren’t official.

Obama, who met with congressional leaders at the White House last week, today reiterated that he wouldn’t accept spending cuts or policy changes as a prerequisite for raising the debt ceiling. Republicans want to place limits on Obama’s 2010 health-care law as part of their demands for raising the borrowing limit.

“We’re not going to negotiate under the threat of economic catastrophe,” Obama said during a visit to the Federal Emergency Management Agency in Washington.

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