Democrats and Republicans appear ready to postpone a fight over raising the national debt ceiling, currently slated for late February, averting until at least mid-May a struggle with potentially calamitous economic implications until the spring.
But what top lawmakers decide about how exactly to go about doing so looks to make the next 90 days pivotal for both parties.
For Democrats, how to achieve a short-term increase matters greatly for President Obama’s second-term agenda, which could be bogged down in months of fiscal combat. For the Republican majority in the House, the outcome of their debt ceiling gambit could lead to bitter infighting if conservative lawmakers feel betrayed again by GOP leadership.
House Republicans want to force Senate Democrats to produce a budget – an effort to make them politically own the government's large deficits. To do that, Republicans are attaching “no budget, no pay” legislation to a temporary suspension of the debt ceiling. Under the GOP proposal, both chambers would have until April 15 to produce a budget resolution. If a chamber didn't get the job done by then, its members would forgo pay until a budget passes or the congressional term ends, whichever comes first. The debt limit would be suspended for a month longer, until May 15.
The House is expected to pass the measure on Wednesday.
House Democrats have been longing to dispense with the so-called Boehner Rule, named after House Speaker John Boehner of Ohio, which calls for $1 in spending cuts for $1 in new lending authority. The GOP’s three-month plan does just that. Democratic leaders and the White House hailed it as lifting “the immediate threat of default" and as an indication "that congressional Republicans have backed off an insistence on holding the nation’s economy hostage to extract drastic cuts” to government programs.
The Obama administration said Tuesday it “would not oppose” a short-term handling of the federal debt ceiling. That puts Senate Democrats in a tough spot: They’ve skipped a budget each of the past three years so as to shield vulnerable members from tough votes on spending priorities. Sen. Charles Schumer (D) of New York recently said Democrats were planning to draft a budget this year, but neither majority leader Harry Reid of Nevada nor Senate Budget Committee Chairwoman Patty Murray (D) of Washington has made a similar commitment.
While the White House called the GOP’s “no budget, no pay” requirement an “unnecessary complication,” its fate in the Senate is up to Senator Murray, Senator Reid said Tuesday.
For Democrats, the risk of going along with the GOP is that they'll be drawn into a fiscal battle that could trip up other items on their agenda, from immigration reform to changes to the nation’s gun laws.
“That’s the [Republicans'] delay strategy,” says Julian Zelizer, a congressional historian at Princeton University. The Republicans "don’t have to make a controversial decision right now and they extend how long the budget fights go on. That’s the center of their strategy.... If [the two sides] had a big showdown, and they make some deal, the issue diminishes in importance.”
But the 90-day gambit holds some peril for the GOP, as well. GOP fiscal hawks – led by the loudest and largest conservative caucus, the Republican Study Committee (RSC) – believe that they have extracted significant promises from party leaders for going along with the plan, even though it has none of the immediate spending cuts or budget reforms that they want.
First, they say leadership has committed to writing a House budget proposal that will lead to a balanced budget in 10 years. That’s a stark departure from Republican budget proposals of the past. While the budget backed by the RSC in 2012 achieved balance in only seven years, that proposal came up well short of support for passage among Republicans. House Budget Committee Chairman Paul Ryan’s final budget, which passed the House, came to balance nearly three decades into the future.
Spending cuts of that magnitude would come with significant political risk to the party. Rep. Tim Huelskamp (R) of Kansas, a critic of the GOP leadership who lost his committee assignments in a spat of palace intrigue, even raised the possibility on Tuesday of cutting Medicare and Social Security benefits for those over 55 years of age. That's something that even Representative Ryan was unwilling to broach in his most recent budget.
“There’s going to be a lot of tough stuff in there,” said Rep. David Schweikert (R) of Arizona about the deep cuts Republicans would need to make. “But that’s the reality.”
Second, conservatives say they’ve won a promise that GOP leaders will insist upon $1.2 trillion in spending cuts mandated by the sequester, or half of the automatic spending reductions required by the last debt ceiling deal of 2011.
As a result of those two promises, most of the House's avid spending-slashers will support the plan to lift the debt ceiling for three months – without demanding immediate spending cuts in return.
“Most conservatives are willing to suspend disbelief and believe the leadership ... that we will have a conservative outcome," said Rep. Thomas Massie (R) of Kentucky. That's the case despite their disappointment over how the House speaker handled the year-end "fiscal cliff" deal and appropriations for hurricane Sandy relief.
Off Capitol Hill, conservative groups that are usually allies on spending issues are split over the House GOP's 90-day plan on the debt ceiling. Club for Growth said it would not count this vote on its congressional scorecard, even as it emphasized the need for spending cuts in the near future. Heritage Action, the political advocacy arm of the conservative Heritage Foundation, issued a statement that neither supported nor opposed the bill.
But FreedomWorks, usually aligned with Heritage Action and Club for Growth on the hardline fiscal edge, opposes the measure because it lacks “immediate accompanying budget reforms or spending reductions.”
And what if the alleged promises aren’t kept? Blowback from conservative lawmakers and their allies outside Congress could be intense.
“In many ways, in 90 days, this is going to be the ultimate test of the relevancy of those we entrust with their leadership positions,” said Representative Schweikert, who after clashes with House GOP leaders was stripped of his plum assignment on the Financial Services Committee, “and I believe there will be hell to pay if they squander this.”