Senate Republicans Back Off Debt Demands as House Mulls

Senate Republicans probably will provide enough votes to raise the U.S. debt limit without conditions, the chamber’s third-ranking party leader said.

That may not be the case with House Republicans, who haven’t decided on a strategy as a suspension of the debt ceiling is scheduled to expire Feb. 7. Treasury Secretary Jacob Lew has urged Congress to act quickly on raising the ceiling, saying the U.S. will reach its borrowing limit by late February.

“I suspect that with Democrats, there are probably enough Republicans in the Senate that would vote for a clean debt limit increase,” third-ranking Senate Republican John Thune of South Dakota said in an interview yesterday. He said he hadn’t conducted a formal vote count.

A dispute over raising the debt limit was among the issues that led to the 16-day partial government shutdown in October. House Republicans tried repeatedly to attach policy provisions curbing Obamacare and promoting the Keystone XL pipeline in exchange for raising the debt cap and funding the government.

Ultimately, the debt limit was suspended with no conditions, through bipartisan votes in the Republican-led House and Democratic-controlled Senate. Twenty-seven Senate Republicans joined Democrats in passing the so-called clean debt ceiling increase on Oct. 16.

Cuts Focus

A number of Senate Republicans interviewed this week said they want to avoid another fight over Obamacare as part of the debt-limit debate. Instead, they said Republicans should focus on cuts in federal spending or long-term debt reduction.

“It would be really nice, if you’re going to do something in the context of raising the debt ceiling, that it be about reforming spending, something that actually impacts the debt,” Thune said. “But the chances of getting anything meaningful on that front through probably aren’t very good.”

Senate Republicans may be pivotal in determining how much of a fight the party mounts against a debt ceiling increase.

House Republicans ended a policy retreat in Maryland yesterday without deciding on their strategy for the debt limit debate, said two people who attended the private discussions and sought anonymity to describe them. Many party members, chastened from prior debt-limit fights, say that default isn’t an option, one of the people said.

Democratic Stance

Several House Republicans previously said they would urge the Senate, which Democrats control 55-45, to act first on the debt issue. President Barack Obama and Senate Majority Leader Harry Reid, a Nevada Democrat, have insisted they won’t negotiate with Republicans on conditions to raising the limit.

Senator Lindsey Graham, a South Carolina Republican who faces a Tea Party-backed challenge as he seeks re-nomination for another term this year, said the party would be foolish to wage another battle over Obamacare and tie it to raising the debt limit.

“We’ve been down that road,” Graham said. “Let’s try to do things where there is bipartisan support.”

Texas Republican Senator Ted Cruz, who led the effort to shut down the government over Obamacare, stopped short of saying Jan. 30 at a Bloomberg Government breakfast that he would fight over the health-care law as part of the next debt ceiling debate.

Cruz said Republicans should use a debt limit increase as an effective “lever point” to insist on “significant structural reforms that address the out-of-control spending and out-of-control debt in Washington.”

Delay Tactic

Without the support of at least 40 other senators, all Cruz could do is delay -- not block -- a debt ceiling increase.

Other Senate Republicans stopped short of making specific demands. Senator Rob Portman, an Ohio Republican, said an attempt to secure additional spending cuts, particularly to mandatory spending and entitlement programs, “ought to be the focus” of his party’s efforts.

Senator Jeff Flake, an Arizona Republican, said he would like to see “another agreement to actually lower debt, particularly on the entitlement side,” akin to the 2011 agreement that led to automatic U.S. spending cuts last year.

Republicans would be wiser to take that approach than to reprise issues like Obamacare and approval of the Keystone pipeline, Flake said.

“It makes more sense to deal with something that is germane and relevant,” he said.

Keystone Issue

Keystone advocates got a boost yesterday when an the U.S. State Department released an environmental report finding limited impact on climate-changing carbon emissions from the project, diminishing the rationale Obama could use to reject the proposed conduit from oil sands of Western Canada to Gulf Coast refineries in Texas.

Senator Orrin Hatch, a Utah Republican, said his preference would be to see Republicans push for Keystone approval as part of the debt ceiling debate.

“That means 20,000 high-paid jobs and over 100,000 indirect jobs over the years,” Hatch said. “It’s just crazy for a country that’s having a rough time economically and having a rough time with jobs and having 51 percent of its people living on the dole -- I mean, c’mon. That just makes sense.”

The Senate’s second-ranking Democrat, Richard Durbin of Illinois, said Republicans would block a clean debt ceiling increase at their political peril.

‘Bottom Line’

“The bottom line for the Republicans is anything that looks like another government shutdown or a shutdown of the economy is lethal in an election year,” Durbin said in an interview. “If they test this president, they’re going to remind everyone of that miserable 16-day, worthless, good-for-nothing shutdown that they inspired a few months ago.”

Amid the October shutdown, Republicans’ favorability rating among the American public sank to a record low 28 percent in Gallup’s monthly poll. Senate Democrats are united in opposition to putting conditions on raising the debt cap.

“I don’t think you negotiate on paying your bills,” Senator Debbie Stabenow, a Michigan Democrat, said in an interview on C-SPAN’s “Newsmakers” program set to air tomorrow. “When it comes time to pay the bills, I think it’s our responsibility to pay the bills.”

The Treasury would have to employ what officials call extraordinary measures to extend U.S. borrowing authority past Feb. 7.

Tennessee Senator Bob Corker said his Republican colleagues haven’t focused much on the need to again raise the debt ceiling. He said a final measure may not end up including conditions.

“If we attach anything to it, I hope it’s around fiscal reforms, which is what debt ceiling is about,” Corker said.

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